- with readers working within the Business & Consumer Services and Law Firm industries
The Law on Ownership of Real Estate by Non-Saudis was issued by Royal Decree No. M/14 dated 19/01/1447H, published in the Official Gazette on 25 July 2025, and entered into force on 22 January 2026 (the "Law").
The Law introduces a unified national framework regulating the ownership and acquisition of real estate and real estate rights by non-Saudi individuals and entities in the Kingdom of Saudi Arabia. It replaces the previous fragmented regime and delegates significant implementation detail to the Implementing Regulations (to be issued within 180 days by the Council of Ministers) and related instruments to be issued by the Real Estate General Authority ("REGA").
Set out below are key practical points relevant to non-Saudi individuals and investors.
Who is considered a "Non-Saudi" under the Law?
The term "Non-Saudi" is defined broadly and includes:
- any natural person who does not hold Saudi nationality, whether resident or non-resident; and
- any foreign legal person (including companies, investment funds and non-profit entities) that is not considered Saudi under the applicable corporate laws.
The Council of Ministers retains the authority to extend the scope of this definition to additional categories by decision, where required.
What types of real estate rights can non-Saudis acquire?
The Law permits non-Saudis to acquire:
- full ownership (title); and
- in-rem real estate rights (including usufruct and other registrable real rights),
subject to:
- the geographic scope designated for non-Saudi ownership; and
- the conditions and limitations set out in the Implementing Regulations.
The geographic areas in which non-Saudis may acquire real estate or in-rem rights (the "Permitted Areas") will be specified in a separate Geographic Scope Document, to be issued by REGA pursuant to the Draft IR. Until that document is formally issued, geographic eligibility must be assessed conservatively.
Does the Law distinguish between residential and non-residential property?
Yes, this point is important for clarity:
- Residential property ownership by non-Saudis is more restricted and is generally tied to:
-
- designated geographic areas;
- special conditions to be set out in the Implementing Regulations; and
- additional limitations in sensitive locations (notably Makkah and Madinah).
- Commercial, industrial and agricultural property may be acquired by eligible non-Saudis for investment or operational purposes, within the geographic zones designated in the Geographic Scope Document and subject to sector-specific licensing requirements.
Accordingly, the Law does not limit non-Saudis to residential ownership only. Rather:
- residential ownership is subject to tighter geographic and regulatory controls; while
- non-residential ownership is permitted for qualifying investment and operational uses, within approved zones.
This distinction resolves the apparent tension between residential and non-residential ownership under the regime.
How are Makkah and Madinah treated?
Ownership in Makkah and Madinah remains highly restricted.
- Only Muslim natural persons may hold title in those cities.
- Additional conditions governing ownership in those areas will be set out in the Implementing Regulations and the Geographic Scope Document.
While the Draft IR does not yet conclusively address corporate ownership in Makkah and Madinah, current regulatory signals suggest that:
- corporate ownership will be subject to special controls, and
- may be limited to Muslim-owned entities or strategic / approved projects.
Final confirmation will depend on the issued Geographic Scope Document.
Can a foreign company own land for factories, logistics facilities or farms?
Yes, in principle, provided that:
- the property is located within an approved geographic zone under the Geographic Scope Document;
- the foreign investor falls within the eligible non-Saudi categories under the Law; and
- all sector-specific licences (e.g. industrial, agricultural or investment licensing) are obtained.
Ownership outside the designated geographic scope is generally limited to what is strictly necessary for the licensed activity, in line with the Draft IR.
Can non-Saudis acquire undeveloped ("white") land?
The Law does not prohibit the acquisition of undeveloped or white land as a matter of principle. However, the Draft IR contemplates that such acquisitions may be subject to:
- development timelines;
- minimum investment thresholds; and
- additional restrictions in strategic or sensitive areas.
The final scope of these conditions will be confirmed in the issued Implementing Regulations.
Can non-Saudis acquire property "off-plan"?
Off-plan acquisitions are expected to be permitted where:
- the development is located within a designated geographic zone; and
- the project complies with the applicable off-plan development regime.
Purchasers and developers will need to confirm that the relevant project falls within the Geographic Scope Document once issued.
Does ownership under the Law grant residency or citizenship?
No. The Law expressly provides that ownership or in-rem rights do not confer:
- permanent residency;
- citizenship; or
- employment rights.
Immigration status remains governed by separate laws and programmes.
How does the Law interact with the Premium Residency Programme?
The Premium Residency Programme continues to operate independently and allows qualifying foreign residents to own property meeting prescribed value thresholds (currently SAR 4,000,000). The Law complements the Premium Residency framework by:
- expanding the categories of real estate interests that may be acquired by non-Saudis; and
- introducing a more structured, investment-oriented ownership regime across designated areas of the Kingdom.
Are there restrictions on payment methods?
Yes. Under the Draft Implementing Regulations, payments relating to the acquisition of real estate or real estate rights by non-Saudis are required to be made exclusively through approved electronic (cashless) payment methods, in line with Saudi financial regulations.
How is ownership perfected and what fees apply?
Ownership or in-rem rights acquired by non-Saudis are only effective upon registration in the national Real Estate Registry. The Law authorises REGA to impose a real estate disposition fee of up to 5% on non-Saudi acquisitions or disposals. The Draft IR specifies the following rates:
- Residential property: 2.5%
- Commercial, industrial and agricultural property: 0%
Certain categories of transactions are expressly subject to a zero-percent fee, as detailed in the Draft IR (including specific transfers, judicial dispositions and other exempt cases).
At Z&Co., we are closely monitoring the issuance of the final Implementing Regulations and the Geographic Scope Document and advising clients on how to structure acquisitions and investments in anticipation of these developments.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
