Saudi Arabia eases foreign property investments in Mecca, Medina

Saudi Arabia’s capital markets regulator said on Monday that the kingdom would allow foreign investments in listed companies that own properties within “the boundaries of the holy cities of Makkah and Madinah” as the government seeks to attract more investment.

The move is designed to boost investment, improve the appeal and efficiency of the capital market, and enhance its regional and global competitiveness, all while providing support to the local economy, the Capital Market Authority (CMA) said in a statement.

Saudi Arabia’s markets watchdog said that under the initiative, foreign investment would be limited to shares, convertible debt instruments, or both and would exclude “strategic foreign investors.” The initiative seeks to attract foreign capital and ensure the necessary liquidity for ongoing and upcoming projects in Makkah and Madinah.

The CMA said that foreign ownership cannot exceed 49 per cent of a company’s listed shares. The market regulator allowed foreigners to subscribe to real estate funds (REITs) investing within the boundaries of Islam’s two holiest sites of Mecca and Medina in 2021.

Meanwhile, Saudi Arabia has introduced sweeping reforms to investment laws and loosened foreign ownership rules in the stock market to boost its investment appeal as part of its Vision 2030 diversification strategy.

Saudi Arabia aims to attract 30 million pilgrims for Hajj and the year-round pilgrimage of Umrah annually by the end of the decade. The kingdom earned about $12bn from the two pilgrimages in 2019, according to official data.

Read: Saudi Arabia’s real estate, infrastructure projects hit $1.25tn