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Saudi Arabia: New Rules Regulating Foreign Investment in Main Market Enter Into Force

The headquarters of the Capital Market Authority (CMA) in the Saudi capital Riyadh. Asharq Al-Awsat
The headquarters of the Capital Market Authority (CMA) in the Saudi capital Riyadh. Asharq Al-Awsat
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Saudi Arabia: New Rules Regulating Foreign Investment in Main Market Enter Into Force

The headquarters of the Capital Market Authority (CMA) in the Saudi capital Riyadh. Asharq Al-Awsat
The headquarters of the Capital Market Authority (CMA) in the Saudi capital Riyadh. Asharq Al-Awsat

New rules regulating foreign investment in Saudi Arabia's main financial market have entered into force, allowing foreign individuals and companies to invest in local securities, bonds, and funds, according to the regulations of the Capital Market Authority (CMA), as published in the Official Gazette on Friday.

These regulations, which generally exempt citizens of the Gulf Cooperation Council (GCC) countries, amend several previous frameworks, including the authorized persons regulations, the rules for qualified foreign financial institutions investment, and the investment accounts instructions.

Under the new rules, six categories of non-resident foreigners are now permitted to access the market.

The rules impose a maximum ownership limit of 10% for each non-resident foreign investor (excluding strategic investors), and a total cap of 49% for all foreign investors in any listed company. Additionally, foreign strategic investors are prohibited from selling their shares for two years following acquisition.

Comprehensive Reforms
This move is part of a broader set of capital market reforms. In July, the CMA’s board approved amendments to the investment funds regulations, real estate investment funds regulations, and the glossary of defined terms, aiming to update the regulatory framework in line with global best practices and to enhance transparency and market governance.

Managed Assets
In 2024, the CMA approved the launch of 44 new investment funds, including equity, money market, endowment, exchange-traded, and real estate funds.

By the end of last year, the total value of managed assets in the Saudi financial market exceeded SAR1 trillion for the first time, reflecting a growth of 20.9% compared to 2023.

The number of investment funds reached 1,549, and the number of subscribers in public and private funds rose to more than 1.72 million, an increase of 47% during the same period.

Saudi Arabia leads G20 countries in several global financial market indicators, according to the 2024 World Competitiveness Yearbook by the International Institute for Management Development (IMD).

Strategic Transformation

Head of Asset Management at Arbah Capital Mohammed al-Farraj said that the implementation of the new rules regulating foreign investment in the Kingdom’s main market represents a "strategic shift that enhances the attractiveness of the Saudi financial market and cements its position as a leading financial hub regionally and globally."

In remarks to Asharq Al-Awsat, al-Farraj said: “The Saudi market ... enjoys a competitive advantage over regional markets such as the UAE, Qatar, and Egypt, making it an appealing destination for long-term foreign capital.”

This openness aligns with the standards of developed market indices such as MSCI and FTSE, which could help attract more capital inflows and strengthen international confidence, he added.

He also told the newspaper that expanding investment opportunities to include bonds and investment funds in addition to equities "adds new depth to the market and boosts liquidity in debt instruments.”

This encourages global asset managers to enter through local platforms or establish joint funds.

Al-Farraj acknowledged that foreign investors may face challenges, such as "the time needed to understand the local regulatory framework and compliance requirements.”

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Business

IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
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IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA

The International Monetary Fund (IMF) and the Arab Monetary Fund (AMF) signed a memorandum of understanding (MoU) on the sidelines of the AlUla Conference on Emerging Market Economies (EME) to enhance cooperation between the two institutions.

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki, SPA reported.

The agreement aims to strengthen coordination in economic and financial policy areas, including surveillance and lending activities, data and analytical exchange, capacity building, and the provision of technical assistance, in support of regional financial and economic stability.

Both sides affirmed that the MoU represents an important step toward deepening their strategic partnership and strengthening the regional financial safety net, serving member countries and enhancing their ability to address economic challenges.

Business

Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT
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Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT

The Federation of Saudi Chambers announced the formation of the first joint Saudi-Kuwaiti Business Council for its inaugural term (1447–1451 AH) and the election of Salman bin Hassan Al-Oqayel as its chairman.

Al-Oqayel said the council’s formation marks a pivotal milestone in economic relations between Saudi Arabia and Kuwait, reflecting a practical approach to enabling the business sectors in both countries to capitalize on promising investment opportunities and strengthen bilateral trade and investment partnerships, SPA reported.

He noted that trade between Saudi Arabia and Kuwait reached approximately SAR9.5 billion by the end of November 2025, including SAR8 billion in Saudi exports and SAR1.5 billion in Kuwaiti imports.

Business

Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
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Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).

Harvard University economics professor Pol Antràs said Saudi Arabia represents an exceptional model in the shifting global trade landscape, differing fundamentally from traditional emerging-market frameworks. He also stressed that globalization has not ended but has instead re-formed into what he describes as fragmented integration.

Speaking to Asharq Al-Awsat on the sidelines of the AlUla Conference for Emerging Market Economies, Antràs said Saudi Arabia’s Vision-driven structural reforms position the Kingdom to benefit from the ongoing phase of fragmented integration, adding that the country’s strategic focus on logistics transformation and artificial intelligence constitutes a key engine for sustainable growth that extends beyond the volatility of global crises.

Antràs, the Robert G. Ory Professor of Economics at Harvard University, is one of the leading contemporary theorists of international trade. His research, which reshaped understanding of global value chains, focuses on how firms organize cross-border production and how regulation and technological change influence global trade flows and corporate decision-making.

He said conventional classifications of economies often obscure important structural differences, noting that the term emerging markets groups together countries with widely divergent industrial bases. Economies that depend heavily on manufacturing exports rely critically on market access and trade integration and therefore face stronger competitive pressures from Chinese exports that are increasingly shifting toward alternative markets.

Saudi Arabia, by contrast, exports extensively while facing limited direct competition from China in its primary export commodity, a situation that creates a strategic opportunity. The current environment allows the Kingdom to obtain imports from China at lower cost and access a broader range of goods that previously flowed largely toward the United States market.

Addressing how emerging economies should respond to dumping pressures and rising competition, Antràs said countries should minimize protectionist tendencies and instead position themselves as committed participants in the multilateral trading system, allowing foreign producers to access domestic markets while encouraging domestic firms to expand internationally.

He noted that although Chinese dumping presents concerns for countries with manufacturing sectors that compete directly with Chinese production, the risk is lower for Saudi Arabia because it does not maintain a large manufacturing base that overlaps directly with Chinese exports. Lower-cost imports could benefit Saudi consumers, while targeted policy tools such as credit programs, subsidies, and support for firms seeking to redesign and upgrade business models represent more effective responses than broad protectionist measures.

Globalization has not ended

Antràs said globalization continues but through more complex structures, with trade agreements increasingly negotiated through diverse arrangements rather than relying primarily on multilateral negotiations. Trade deals will continue to be concluded, but they are likely to become more complex, with uncertainty remaining a defining feature of the global trading environment.

Interest rates and artificial intelligence

According to Antràs, high global interest rates, combined with the additional risk premiums faced by emerging markets, are constraining investment, particularly in sectors that require export financing, capital expenditure, and continuous quality upgrading.

However, he noted that elevated interest rates partly reflect expectations of stronger long-term growth driven by artificial intelligence and broader technological transformation.

He also said if those growth expectations materialize, productivity gains could enable small and medium-sized enterprises to forecast demand more accurately and identify previously untapped markets, partially offsetting the negative effects of higher borrowing costs.

Employment concerns and the role of government

The Harvard professor warned that labor markets face a dual challenge stemming from intensified Chinese export competition and accelerating job automation driven by artificial intelligence, developments that could lead to significant disruptions, particularly among younger workers. He said governments must adopt proactive strategies requiring substantial fiscal resources to mitigate near-term labor-market shocks.

According to Antràs, productivity growth remains the central condition for success: if new technologies deliver the anticipated productivity gains, governments will gain the fiscal space needed to compensate affected groups and retrain the workforce, achieving a balance between addressing short-term disruptions and investing in long-term strategic gains.