RIYADH — Saudi Arabia has introduced a comprehensive regulatory framework governing foreign ownership of real estate, establishing clear requirements for individuals, companies, and non-profit organizations while launching a unified digital system to manage property transactions.

The executive regulations for the Foreign Ownership of Real Estate Law define standardized procedures for acquiring property and real estate rights, strengthen disclosure requirements, introduce electronic transaction mechanisms, and impose penalties of up to SR10 million for violations.

The new regulations complement the recently approved geographical zones where non-Saudis are permitted to own property and are intended to improve transparency, strengthen market governance, and support investment in the Kingdom.

Requirements for Foreign Individuals

Under the new rules, non-resident foreign individuals must obtain a Ministry of Interior-approved digital identity, open a Saudi bank account in their own name, and register a Saudi mobile number linked to their digital identity before purchasing property or acquiring real estate rights.

The requirements are designed to verify buyers’ identities and ensure that financial and legal transactions are connected to officially authenticated records.

Requirements for Foreign Companies

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

Once these requirements are met, the Ministry of Investment will issue a registration number.

Companies must also notify the ministry within 15 days of any ownership change involving 5% or more, whether through a single or multiple transactions, or when governance changes in the country of incorporation affect company independence or decision-making.

Rules for Foreign Non-Profit Organizations

Foreign non-profit organizations are required to register with the National Center for Non-Profit Sector Development, disclose individuals exercising direct or indirect control, appoint an authorized representative with an approved Saudi identity, maintain a Saudi bank account, and report significant structural or governance changes within 15 days.

Unified Digital Platform

The regulations establish a unified electronic platform, managed by the Real Estate General Authority (REGA) and linked to the national Real Estate Registry.

The platform will serve as the exclusive channel for applications to purchase property, acquire real estate rights, and complete transactions involving foreign individuals, foreign companies, and Saudi companies with foreign shareholders.

All property-related payments must be processed through Saudi Central Bank-approved electronic payment systems before ownership is transferred through the Real Estate Registry.

Family Ownership Rules

The regulations limit multiple residential purchases within the same foreign family.

A foreign spouse and non-Saudi children are treated as dependents for residential ownership and cannot acquire another residence separately unless the marriage ends or the child reaches 25 years of age.

Saudi Companies with Foreign Shareholders

Saudi companies that are not listed on the stock exchange but include foreign shareholders may own property outside 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 approved ownership zones, including Makkah and Madinah, these companies may acquire property without ministry approval, subject to the conditions outlined in the law.

Transaction Fees and Exemptions

A 2% transaction fee will apply to property rights acquired by non-Saudis in Riyadh, Jeddah, Makkah, and Madinah.

The regulations exempt 10 categories of transactions, including inheritance divisions, final court rulings, expropriation for public use, donations to government entities and endowments, returning property to its previous owner within specified conditions, divisions of jointly owned property, diplomatic and international organization transactions under reciprocity arrangements, transfers to wholly owned companies or investment funds, and sales of completed real estate projects developed on foreign-owned land.

Digital Notifications and Enforcement

Legal notifications will be recognized when delivered through communication channels registered on the electronic platform or by text messages sent to officially registered Saudi mobile numbers.

REGA will also publish a detailed procedural guide explaining how the regulations will be implemented.

The authority’s inspectors have been empowered to investigate and document violations. Before penalties are imposed, violators will be given between 10 and 180 days to correct their status, depending on the nature of the violation.

Penalties

The regulations introduce a graduated penalty system.

Foreign buyers who provide false or misleading information to obtain property ownership rights may face fines of up to 5% of the property’s value, with a maximum penalty of SR10 million.

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