RIYADH — Saudi Arabia has introduced a comprehensive regulatory framework governing property ownership by non-Saudis, setting out detailed requirements for 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 acquiring property and real estate rights in the Kingdom, strengthen disclosure requirements, introduce electronic transaction mechanisms, and set penalties of up to SR10 million for violations.
The regulations complement the recently approved geographical zones where non-Saudis are permitted to own property and are aimed at enhancing transparency, improving market governance, and supporting investment.
New requirements for foreign individuals
Before purchasing property or acquiring any real estate right in Saudi Arabia, non-resident foreign individuals must:
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Obtain a Ministry of Interior-approved digital identity.
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Open a Saudi bank account in their own name.
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Register a Saudi mobile number linked to their digital identity.
The requirements are intended to verify buyers’ identities and ensure that all financial and legal transactions are linked to officially authenticated records.
New obligations for foreign companies
Foreign companies wishing to own real estate must:
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Register with the Ministry of Investment.
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Fully disclose their direct and indirect beneficial owners.
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Appoint a legal representative holding an approved Saudi identity.
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Open a company bank account in Saudi Arabia.
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% or more changes, whether through a single transaction or multiple transactions, or if governance arrangements in the country of incorporation allow another party to influence company decisions or reduce its 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.
Unified electronic platform
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 platform for submitting applications to purchase property, acquire real estate rights, or complete property transactions involving:
All financial transactions related to property purchases or disposals must be completed through electronic payment systems approved under Saudi Central Bank regulations before title deeds are transferred through the Real Estate Registry.
Family ownership rules
The regulations also prevent multiple residential purchases within a single foreign family.
A foreign spouse and non-Saudi children will be treated as dependents when acquiring a residential property.
They cannot separately own another residence unless:
Saudi companies with foreign shareholders
Saudi companies that are not listed on the stock exchange but have foreign shareholders may own property outside the designated foreign ownership zones—excluding Makkah and Madinah—after obtaining approval from the Ministry of Investment, provided the property is used for business operations or employee housing.
Within the approved ownership zones, including Makkah and Madinah, these companies may acquire property without requiring ministry approval, subject to the conditions set out in the law.
Transaction fees and exemptions
The regulations introduce a 2% 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:
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Inheritance divisions.
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Final court judgments.
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Expropriation for public use.
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Donations to endowments and government entities.
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Returning property to its previous owner within 180 days under specified conditions.
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Division of jointly owned property without increasing ownership shares.
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Transactions involving diplomatic missions and international organizations under reciprocity arrangements.
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Transfers of property to wholly owned companies or investment funds.
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Sales of real estate units developed on foreign-owned land, subject to project completion and sale deadlines.
Digital notifications
Legal notifications will be considered valid if delivered through communication channels registered on the electronic portal or via text messages sent to officially registered Saudi mobile numbers.
REGA will also publish a detailed procedural guide explaining how the regulations will be implemented.
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
The regulations establish a graduated penalty system.
Foreign buyers who submit false or misleading information to obtain property ownership rights may be fined up to 5% 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.
Source: Saudi Gazette