Saudi Arabia’s Capital Market Authority (CMA) announced a landmark reform allowing all categories of foreign investors to invest directly in the Kingdom’s main stock market, Tadawul, starting February 1.
The move signals a strategic repositioning of the Saudi market as a highly competitive global investment destination.
The CMA has scrapped the “qualified foreign investor” requirement and abolished swap agreements, granting international investors full rights to direct share ownership.
The decision is underpinned by strong foreign investment momentum exceeding $157 billion and rising global confidence in the sustainability of Saudi economic growth.
The reform is also expected to increase Saudi Arabia’s weighting in major global indices, including MSCI and FTSE.
Under the new regulatory framework approved by the CMA’s board, the market shifts from “conditional openness” to “full openness.” Non-resident foreign investors will no longer be required to meet prior qualification criteria to access the main market.
The abolition of swap agreements - previously limiting investors to economic benefits without ownership - will allow foreign investors to hold shares directly and exercise full shareholder rights. This is expected to significantly boost liquidity and attract new institutional and individual investors.
According to the CMA, the amendments aim to expand and diversify the investor base, support capital inflows, and strengthen market liquidity.
By the end of the third quarter of 2025, international investors’ ownership in the Saudi market had surpassed SAR 590 billion ($157.3 billion), while foreign investment in the main market reached around SAR 519 billion, up from SAR 498 billion at the end of 2024. The Authority expects the new framework to draw additional international capital.
The steady rise in foreign investment, even before the reforms take effect, points to a potential surge in inflows in 2026 once the decision is implemented.
The announcement builds on earlier steps taken in July 2025, when the CMA eased procedures for opening and operating investment accounts for certain investor categories, including foreign individuals residing in Gulf Cooperation Council (GCC) states or with prior residency in Saudi Arabia or other GCC countries.
The latest changes align with the CMA’s phased approach to market liberalization and follow the publication, in October 2025, of a draft regulatory framework for public consultation.
The Authority said further steps will follow to deepen market openness and strengthen Tadawul’s position as a global financial hub.
