Saudi Arabia unveils rules for foreign property ownership

Saudi Arabia has introduced a new regulatory framework governing property ownership by non-Saudis, requiring foreign individuals, companies, and non-profit entities, while creating a unified digital platform for all ownership transactions.

The executive regulations for the Foreign Ownership of Real Estate Law establish standardized procedures for all property transactions involving foreign owners, while introducing fines of up to 10 million Saudi Riyals for serious violations.

The regulations complement the recently approved geographical zones where non-Saudis are allowed to own property, as part of broader efforts to improve transparency, strengthen oversight and encourage investment.

Identity requirements for foreign buyers

Foreign individuals who are not residents must obtain a Ministry of Interior-approved digital identity before buying property or acquiring real estate rights in Saudi Arabia.

They must also open a Saudi bank account in their own name and register a Saudi mobile phone number linked to their digital identity.

Officials say the requirements are intended to verify buyers’ identities and ensure that financial and legal transactions are tied to authenticated records.

Obligations for foreign companies

Foreign companies seeking to own property in Saudi Arabia should register with the Ministry of Investment, disclose their direct and indirect beneficial owners, appoint a legal representative holding an approved Saudi identity, and open a Saudi bank account.

The Ministry of Investment will issue a registration number after the requirements are completed.

Companies must also notify the ministry within 15 days if ownership of 5 percent or more changes, whether through a single transaction or numerous transactions. They must also report governance changes that could allow another party to influence company decisions or reduce the company’s independence.

Rules for foreign non-profit organizations

Foreign non-profit organizations will be required to register with the National Center for Non-Profit Sector Development.

They must disclose individuals exercising direct or indirect control, appoint an authorized representative with an approved Saudi identity, and maintain a Saudi bank account.

They must also notify authorities within 15 days of significant structural changes or changes affecting decision-making control.

Digital platform for transactions

One of the most significant features of the regulations is the establishment of a unified electronic portal by the Real Estate General Authority (REGA).

Linked directly to the national Real Estate Registry, the portal will serve as the exclusive channel for submitting applications to buy property, acquire real estate rights, or complete transactions involving foreign individuals, foreign companies, and Saudi companies with foreign shareholders.

Property payments must be made through Saudi Central Bank-approved electronic payment systems before title deeds are transferred through the Real Estate Registry.

Family ownership rules

Under the new regulations, a foreign spouse and non-Saudi children will be treated as dependents for residential property ownership.

They will not be permitted to purchase a separate residence unless the marriage ends or a son or daughter reaches the age of 25.

Saudi companies with foreign shareholders

Saudi companies that are not listed on the stock exchange but have foreign shareholders may own property outside designated foreign ownership zones, excluding Makkah and Madinah, with approval from the Ministry of Investment.

The properties must be used for business operations or employee accommodation.

Within approved ownership zones, including Makkah and Madinah, such companies may acquire property without ministry approval, subject to the conditions of the law.

Transaction fees and exemptions

The regulations introduce a 2 percent fee on transactions involving real estate rights acquired by non-Saudis in Riyadh, Jeddah, Makkah and Madinah.

However, ten categories of transactions are exempt from the fee, including: inheritance divisions, final court judgments, expropriation for public use, donations to endowments and government entities, and returning property to its previous owner within 180 days under specified conditions, division of jointly owned property without increasing ownership shares, transactions involving diplomatic missions and international organizations under reciprocity arrangements, transfers of property to wholly owned companies or investment funds and sales of real estate units developed on foreign-owned land, subject to project completion and sale deadlines.

Inspections and enforcement

The regulations authorize REGA-appointed inspectors to investigate and document violations.

Before penalties are imposed, violators must be given between 10 and 180 days to rectify their status, depending on the nature of the violation.

Penalties

Foreign buyers who provide wrong or misleading information to obtain property ownership rights may be fined up to 5 percent of the value of the property right, with a maximum penalty of SR10 million.

Other violations including providing false information to obtain Ministry of Investment approval, obstructing inspectors, failing to rectify violations, or failing to report required ownership changes, carry fines ranging from warnings to penalties between 0.1% and 3% of the property’s value, with maximum fines reaching SR4 million in some cases and up to SR2 million for repeated reporting violations.