Saudi Arabia has moved to overhaul regulations governing foreign ownership of real estate in its special economic zones, in a step seen as aligning the sector with newly approved nationwide property ownership laws.
According to information obtained by Asharq Al-Awsat, the government has decided to abolish Article 15 of the regulations for the Economic Cities and Special Zones Authority. The clause previously allowed non-Saudis, whether individuals or legal entities, to own or lease property within these zones under rules set by the authority’s board and approved by the King.
The decision also includes a reordering of other provisions to match the updated “Foreign Ownership of Real Estate Law.”
In July, the government approved this new property law, opening what experts describe as a new chapter for the Saudi real estate market. The move aims to stimulate investment, improve supply quality and quantity, and achieve greater market balance.
The updated framework specifies that the Cabinet, based on a proposal from the General Real Estate Authority’s board and approval from the Council for Economic and Development Affairs, will determine the geographic areas where foreigners may own property or acquire other real estate rights.
It will also define permissible property rights, maximum ownership limits within each area, the maximum term for usufruct rights, and any additional conditions.
The law grants non-Saudis the right to own one residential property outside the designated zones, excluding Makkah and Madinah.
Under the system, unlisted companies formed under Saudi corporate law, in which one or more non-Saudis hold equity, may own property within approved zones. Listed companies, investment funds, and special purpose entities licensed under Saudi law may own property and acquire related rights anywhere in the Kingdom, including Makkah and Madinah, subject to Capital Market Authority rules coordinated with the Real Estate General Authority and other relevant bodies.
On a reciprocal basis, accredited foreign diplomatic missions may own official premises and residences for their heads and staff. International and regional organizations may also own headquarters, within the limits of governing agreements, upon approval from the Ministry of Foreign Affairs.
The restructuring follows the 2023 announcement by Prince Mohammed bin Salman, Crown Prince and Prime Minister, of four new special economic zones in Riyadh, Jazan, Ras Al-Khair, and King Abdullah Economic City near Jeddah.
These zones, part of the Kingdom’s economic diversification drive, are designed to attract global investment by offering competitive advantages and fostering key sectors such as logistics, industry, and technology.
