Saudi Arabia Opens Property Ownership to Non‑resident Foreign Companies, What Corporate Counsel Must Know

Saudi Arabia opens property ownership to nonresident foreign companies through a landmark regulatory overhaul that took effect on 21 January 2026, fundamentally reshaping how overseas businesses can acquire real estate in the Kingdom. The Law of Real Estate Ownership by Non‑Saudis, enacted by Royal Decree in July 2025 and supplemented by executive regulations that became operative on 23 June 2026, creates a structured pathway for non‑Saudi individuals and legal entities, including companies with no local presence, to purchase, lease and invest in Saudi property.

Paired with the new Companies Law Saudi 2026, which widens the scope for 100 per cent foreign ownership of Saudi corporate entities, the combined reforms represent the most significant opening of the Saudi real estate and corporate markets in decades. This guide provides corporate counsel with a comprehensive compliance checklist, explains geographic restrictions, outlines documentation requirements, and maps the interaction between the property ownership regime and Companies Law corporate governance obligations.

Executive Summary, What Changed and Why It Matters

In short: Non‑Saudi individuals and foreign companies, including those with no existing presence in the Kingdom, may now own real estate in Saudi Arabia, subject to REGA registration, documentary requirements and geographic restrictions around Makkah and Madinah. The law was enacted by Royal Decree on 25 July 2025, came into force on 21 January 2026, and its executive regulations became operative on 23 June 2026.

• Who can now own. Non‑resident foreign companies (legal entities incorporated outside Saudi Arabia without a local branch or subsidiary) are explicitly permitted to own Saudi real estate for investment, licensed business activities or private residential use.
• Key limits. Ownership within the boundaries of Makkah and Madinah remains restricted. All acquisitions must be registered with the REGA Real Estate Registry, and documentation must be consularly authenticated and translated into Arabic.
• Immediate action items. Corporate counsel should audit existing client real estate strategies, confirm entity eligibility, prepare documentation packages and engage Saudi counsel to begin the REGA registration process.

What Is the Law of Real Estate Ownership by Non‑Saudis?

The Law of Real Estate Ownership and Investment by Non‑Saudis is a standalone statute that replaces the previous fragmented regulatory approach to foreign property ownership in the Kingdom. Published through a Royal Decree and governed by executive regulations issued by the Real Estate General Authority (REGA), the law establishes a unified framework that defines eligible buyers, permitted property types, geographic restrictions and registration procedures. The Ministry of Justice published the official English translation of the law, while REGA released a detailed Q&A document explaining the practical application of each provision.

Key Definitions

• Non‑Saudi. Any natural person who does not hold Saudi nationality, or any legal entity not wholly owned by Saudi nationals, including companies incorporated outside the Kingdom.
• Non‑resident foreign company. A legal entity incorporated under the laws of a foreign jurisdiction that does not maintain a registered branch, subsidiary or permanent establishment in Saudi Arabia. This category is now explicitly included among eligible buyers.
• Designated geographic zones. Areas identified by the executive regulations where foreign ownership is restricted or prohibited, principally the boundaries of the Holy Cities of Makkah and Madinah, with certain limited exceptions for investment in designated development zones.

Effective Dates and Regulatory Timeline

Understanding the phased implementation is critical for compliance planning. The law and its implementing rules came into effect across three stages:

The gap between the law’s effective date in January and the executive regulations in June created a transitional period during which REGA processed applications under interim guidance. Industry observers expect that any applications submitted during this window will be assessed against the now‑finalised executive regulations, meaning early applicants should review their submissions for completeness against the June requirements.

Can Non‑Resident Foreign Companies Own Property in Saudi Arabia?

Yes. The law explicitly extends property ownership rights to non‑resident foreign companies, legal entities incorporated abroad that have no branch, subsidiary or registered agent in the Kingdom. This is one of the most significant departures from the previous regime, which generally required a foreign company to establish some form of local corporate presence before it could acquire real estate. Under the new framework, a non‑resident foreign company may own Saudi property for three permitted purposes: residential use for private accommodation, investment (including commercial and residential development projects), and acquisition of premises needed to carry out a licensed business activity in Saudi Arabia.

Non‑Resident Companies vs Non‑Resident Individuals, Eligibility and Limits

The law draws an important distinction between non‑resident natural persons and non‑resident legal entities. While both categories are eligible, the documentation and approval processes differ in ways that corporate counsel must understand:

• Non‑resident individuals may purchase residential property for personal use, subject to REGA approval and a requirement that the property not be located within the restricted boundaries of Makkah or Madinah. Individuals must provide passport copies, proof of financial capacity and a declaration of intended use.
• Non‑resident foreign companies face additional corporate documentation requirements, including certified copies of the certificate of incorporation, articles of association, board resolutions authorising the purchase, evidence of good standing in the home jurisdiction, and audited financial statements. All documents must be consularly authenticated and officially translated into Arabic.
• Permitted property types for companies include commercial premises, residential units for employee housing, mixed‑use developments for investment, and land plots designated for development, provided the intended use aligns with the company’s declared purpose in its REGA application.

Documentation Checklist for Non‑Resident Foreign Companies

Practical note: consular authentication timelines vary significantly by jurisdiction. Counsel should allow four to eight weeks for the full authentication and translation cycle, particularly for companies incorporated in jurisdictions that are not party to the Apostille Convention.

Interaction with the New Companies Law, 100% Foreign Ownership in Saudi Arabia

The property ownership reforms do not exist in isolation. They operate alongside the new Companies Law, which has substantially widened the scope for 100% foreign ownership of Saudi companies. Together, the two statutes create a complementary framework: a foreign investor can now establish a wholly owned Saudi entity under the Companies Law and, through that entity or directly as a non‑resident company, acquire real estate under the property ownership law.

Which Entity Forms Can Be 100% Foreign Owned?

The new Companies Law Saudi 2026 removes previous restrictions that required Saudi participation in certain corporate forms. Foreign investors may now hold 100 per cent of the share capital in limited liability companies (LLCs), joint‑stock companies and simplified joint‑stock companies, subject to sector‑specific restrictions maintained by individual licensing authorities. The law also clarifies the corporate governance obligations that apply to these entities, including accounting, reporting and beneficial ownership disclosure requirements.

Corporate Governance Obligations Under the Companies Law

Foreign‑owned entities established under the Companies Law must comply with Article 17 requirements for maintaining accounting records in Saudi Arabia. This includes keeping Arabic‑language financial books, maintaining records at the company’s registered office in the Kingdom, and making them available for inspection by regulatory authorities. Companies must also register beneficial ownership information and file annual returns with the Ministry of Commerce. These obligations apply regardless of whether the entity has been formed specifically to hold real estate or for broader commercial purposes.

The likely practical effect of the combined reforms is that foreign investors will face a strategic choice: acquire property directly as a non‑resident foreign company (simpler structure, but limited ongoing corporate infrastructure in Saudi Arabia) or establish a wholly owned Saudi subsidiary under the Companies Law (more regulatory overhead, but potentially advantageous for tax planning, residency and ongoing property management). The optimal structure will depend on the investor’s commercial objectives, the property type and the relevant sector.

Practical Compliance Checklist for Foreign Companies Buying Property in Saudi Arabia

This section provides a step‑by‑step process guide for non‑resident foreign companies seeking to acquire Saudi real estate under the new framework. Each step involves specific documentation, filing and approval requirements that corporate counsel should track against internal timelines.

1. Corporate due diligence and board resolution. Confirm that the company’s constitutional documents permit the acquisition of foreign real estate. Obtain a board resolution (or equivalent corporate authorisation) specifically approving the transaction, naming the target property or describing acquisition parameters, and designating authorised signatories.
2. Document authentication and translation. Gather all required corporate documents (see checklist table above), have them notarised in the home jurisdiction, apostilled or consularly authenticated at the Saudi embassy or consulate, and officially translated into Arabic by a certified translator.
3. REGA application and registration. Submit the complete application package to the Real Estate General Authority through the REGA Real Estate Registry platform. The application must include the authenticated documents, the declaration of intended use, and details of the specific property to be acquired.
4. Obtain required approvals. REGA will review the application and may coordinate with other ministries depending on the property location and intended use. For properties near security‑sensitive zones or in designated development areas, additional approvals from the Ministry of Interior or relevant municipal authorities may be required.
5. Open a Saudi bank account. While not always mandatory for the purchase itself, a Saudi bank account is typically required for completing the transaction payment, paying registration fees and managing ongoing property‑related expenses. Some banks may require the company to obtain a Saudi digital identifier.
6. Complete the purchase and register title. Once REGA approval is granted, the sale can be completed and the title registered in the REGA Real Estate Registry. Registration is mandatory, unregistered acquisitions have no legal effect against third parties.
7. Post‑acquisition reporting. Foreign property owners must comply with any ongoing reporting requirements specified in the executive regulations, including notifications of change of use, disposals and transfers of ownership.

Geographic and Subject‑Matter Exceptions, What Remains Restricted

The law does not open all Saudi territory to foreign property ownership. The executive regulations maintain significant geographic restrictions, and corporate counsel must verify the location of any target property against the current REGA restriction map before proceeding with an acquisition.

• Makkah and Madinah. Non‑Saudis remain prohibited from owning real estate within the boundaries of the Holy Cities of Makkah and Madinah. This restriction applies to both individuals and companies, regardless of the intended use. Limited exceptions may exist for investment in designated development projects approved by the relevant authorities, but these require specific case‑by‑case approvals.
• Security‑sensitive zones. Properties located near military installations, border areas and other security‑sensitive locations may be subject to additional restrictions or require Ministry of Interior approval before a foreign buyer can complete an acquisition.
• Agricultural land. Foreign ownership of agricultural land remains subject to separate regulations and is generally restricted unless the acquisition is part of an approved investment project.
• Other major cities. Riyadh, Jeddah, Dammam and other major commercial centres are generally open to foreign property ownership, subject to standard REGA registration and documentation requirements.

Practical note: the REGA platform provides a geographic verification tool that allows applicants to check whether a specific property falls within a restricted zone. Counsel should use this tool at the earliest stage of any transaction to avoid investing time and resources in an acquisition that cannot be completed.

Tax, Residency and Ancillary Implications

The property ownership reforms intersect with several ancillary regulatory frameworks that corporate counsel should consider when advising on Saudi real estate acquisitions.

Residency Options Tied to Property, Real Estate Owner Residency

Saudi Arabia offers a Real Estate Owner Residency pathway that allows foreign property owners to obtain a renewable residency permit linked to their property investment. The programme requires a minimum property value of SAR 4,000,000 (approximately USD 1,066,000). This residency category grants the holder the right to live in Saudi Arabia, sponsor dependants and access certain government services, though it does not confer citizenship or unrestricted work rights. Non‑resident foreign companies themselves cannot obtain residency, but individual beneficial owners or directors may be eligible if they personally hold qualifying property.

Tax and Transfer Fee Considerations

Real estate transactions in Saudi Arabia are subject to a real estate transaction tax (RETT), currently levied at 5 per cent of the property value. Foreign buyers should also budget for registration fees, notarisation costs and professional advisory fees. There is no separate stamp duty. Corporate buyers structured as Saudi entities under the Companies Law will also be subject to the standard corporate income tax and Zakat obligations, depending on whether the entity is foreign‑owned or has Saudi/GCC shareholders. Detailed tax planning should be undertaken with specialist Saudi tax counsel before completing any acquisition.

Corporate Governance, Reporting and Enforcement Risks

Foreign companies that acquire Saudi real estate, whether directly as non‑resident entities or through locally incorporated subsidiaries, must comply with ongoing corporate governance and reporting obligations. Non‑compliance carries significant consequences under both the property ownership law and the Companies Law.

Companies that establish a local presence to hold property should also be aware of their obligations under Saudi Arabia’s Saudization and accounting compliance framework, which applies to all entities with employees in the Kingdom.

Checklist, How to Instruct Saudi Counsel and Indicative Timeline

In‑house counsel preparing to instruct a Saudi law firm on a non‑resident property acquisition should provide the following information at the outset to ensure efficient execution:

• Entity details: full corporate name, jurisdiction of incorporation, registration number, registered office address and names of directors and beneficial owners.
• Transaction scope: description of the target property (or acquisition criteria), intended use, estimated budget and preferred completion timeline.
• Documentation status: confirm which corporate documents are already available and whether consular authentication has begun.
• Structuring preferences: indicate whether the client prefers to acquire directly as a non‑resident company or to establish a Saudi subsidiary, and any relevant tax or residency considerations.
• Decision points: identify internal approval gates (board approvals, investment committee sign‑off, compliance review) and their expected timelines.
• Budget for advisory fees: Saudi counsel will typically charge for REGA application preparation, document review, regulatory liaison and title registration support.

Indicative total timeline: from initial instruction to title registration, a straightforward non‑resident acquisition typically takes 12 to 20 weeks, depending on document authentication timelines, REGA processing and whether additional ministry approvals are required. Complex transactions involving restricted zones or multi‑property portfolios will take longer.

Conclusion, Saudi Arabia Opens Property Ownership to Nonresident Foreign Companies

The combination of the Law of Real Estate Ownership by Non‑Saudis and the new Companies Law represents a deliberate and far‑reaching liberalisation of Saudi Arabia’s corporate and real estate markets. For the first time, non‑resident foreign companies can acquire Saudi property without establishing a local corporate presence, while the Companies Law simultaneously makes it easier than ever to structure a wholly owned Saudi subsidiary. Early indications suggest that international investors are already responding to the new framework, with REGA reporting increased application volumes since the law took effect in January 2026.

Corporate counsel advising foreign clients should move quickly to understand the documentation, registration and geographic requirements, the compliance pathway is clear but demands careful preparation. The interplay between property ownership rules, Companies Law corporate governance obligations, tax exposure and residency options means that structuring decisions made at the outset will have long‑term consequences. Working with experienced Saudi counsel from the earliest stage will help ensure that applications are complete, timelines are realistic and the chosen corporate structure aligns with the client’s broader commercial objectives in the Kingdom.

Sources

1. Real Estate General Authority (REGA), Non‑Saudi Real Estate Ownership Platform
2. REGA, Q&A on Updated Law of Real Estate Ownership by Non‑Saudis (PDF)
3. Saudi Ministry of Justice, Law of Real Estate Ownership and Investment by Non‑Saudis (PDF)
4. White & Case LLP, Saudi Arabia Approves Landmark Real Estate Ownership Law for Non‑Saudis
5. AHYSP, Saudi Arabia’s Foreign Property Ownership Law to Take Effect on 21 January 2026
6. Global Law Experts, New Saudi Companies Law 2026
7. Qanoniah, Non‑Saudis Real Estate Ownership Executive Regulations