Saudi Arabia Considers New Draft Rules for Real Estate Ownership by Listed Firms and Funds
Introduction of Draft Regulations
The Capital Market Authority (CMA) of Saudi Arabia has initiated a public consultation on newly proposed regulations aimed at controlling real estate ownership by listed companies, investment funds, and special purpose entities (SPEs). This initiative particularly pertains to properties located in the holy cities of Makkah and Madinah.
The CMA invites all relevant stakeholders in the capital market to provide their feedback on these Draft Controls. The consultation period is set for 15 calendar days, concluding on January 14, 2026.
Objectives of the Proposed Regulations
The primary aim of the draft regulations is to establish a clear mechanism for real estate ownership by companies registered under the Companies Law, as well as by licensed investment funds and SPEs. This framework also encompasses the acquisition of other in-kind rights related to real estate within the Kingdom, specifically in Makkah and Madinah.
By implementing these measures, the CMA seeks to enhance efficiency within the capital market, boost investor interest, and fortify Saudi Arabia’s competitiveness on both regional and international fronts.
Key Provisions of the Draft Controls
The proposed regulations outline which listed companies, investment funds, and SPEs are subject to these new provisions. Furthermore, they clarify the rules governing ownership of shares in these entities by non-Saudi investors, including both individuals and legal entities. Specific conditions and ownership limits are detailed to guide compliance.
Moreover, the regulations will oversee the ownership of units in investment funds that allocate a portion or all of their assets to real estate within the Kingdom, encompassing properties in Makkah and Madinah.
Real Estate in Makkah and Madinah
The draft also addresses ownership regulations regarding real estate in Makkah and Madinah by listed companies for non-operational purposes. The CMA emphasizes that foreign strategic investors are prohibited from holding any shares in these listed companies or owning convertible debt instruments at any time.
Importantly, the proposed measures do not alter the existing regulatory obligations of foreign investors, listed companies, investment funds, or SPEs operating under current laws and guidelines. This includes compliance with the Law of Real Estate Ownership and Investment by Non-Saudis and its implementing regulations, applicable whether these entities are currently operational or under liquidation.
Maintaining Regulatory Consistency
The CMA is dedicated to ensuring regulatory consistency and clarity across the various frameworks that govern real estate ownership within Saudi Arabia. The proposed rules build upon existing frameworks concerning non-Saudi ownership and refrain from introducing entirely new provisions.
Aligned with the recently unveiled Non-Saudi Real Estate Ownership Law, these regulations will take effect at the start of 2026. This new law grants the CMA the authority to issue its controls regulating real estate ownership by listed companies, investment funds, and SPEs as stipulated in Article 4.
Potential Impact on Investment
Upon approval, the draft regulations are anticipated to stimulate investment and increase international participation within the Saudi capital market. The CMA asserts that such measures will not only support the local economy but also accelerate growth in the real estate sector, aligning with the broader goals laid out in Saudi Vision 2030 for the development of the financial sector.
The CMA is committed to fully considering feedback from individuals, governmental entities, the private sector, and entities under its supervision before granting final approval of the controls.
Inputs can be submitted via the Unified Electronic Platform for Consulting the Public and Government Entities, which is linked to the National Competitiveness Centre, or directly through email.
Published on 1767121372 • Category: Real Estate,Capital Market Authority (CMA),CMA,CMA Saudi Arabia,Madinah,Makkah,Makkah real estate market,saudi real estate