Foreigners will be able to buy property in Mecca and Medina

Saudi Arabia's market regulator announced on Monday that foreign investors can now invest in listed companies owning real estate in Mecca and Medina. The move is part of the kingdom's efforts to attract global investment and enhance liquidity for projects in these key religious cities.

The Capital Market Authority (CMA) explained that foreign investments would be limited to shares, convertible debt instruments, or both, while excluding "strategic foreign investors." Non-Saudis, however, will not be permitted to own more than 49% of the shares in these companies.

Pilgrimages central to Saudi Arabia’s economy

Mecca and Medina host millions of Muslim pilgrims annually, particularly for the Hajj and Umrah. These religious gatherings are major revenue sources for the kingdom. Saudi Arabia earned approximately $12 billion from pilgrimages in 2019 and aims to attract 30 million pilgrims annually by 2030 as part of its Vision 2030 plan to diversify the economy away from oil.
The Gulf Arab region’s largest stock exchange, valued at 10.2 trillion riyals ($2.72 trillion), opened to foreign investors in 2015. The latest decision is expected to draw in further international funds and boost the development of real estate projects linked to pilgrimage activities.

Rules for foreign investor

Investments are restricted to listed companies in Mecca and Medina. Foreigners can invest in shares or convertible debt instruments. Strategic foreign investors are excluded. Non-Saudis cannot own more than 49% of shares in any company involved.

In 2021, non-Saudis were allowed to invest in real estate funds focusing on Mecca and Medina. Monday's announcement builds on that step, broadening opportunities for foreign investors.