The executive regulations governing non-Saudi ownership of real estate are beginning to take shape, placing transparency and financial integrity at the forefront in a major development aimed at strengthening real estate market governance and enhancing its investment appeal. Asharq Al-Awsat has learned that the next phase will introduce a package of stringent measures, most notably the establishment of a unified electronic portal for real estate transactions linked to the national real estate registry. The regulations will also require full disclosure of the direct and indirect beneficial owners of foreign entities and mandate the use of electronic payment methods for all property-related financial transactions, enhancing the reliability of procedures while improving oversight and regulatory efficiency. These regulatory measures, included in the executive regulations approved by the Council of Ministers chaired by the Custodian of the Two Holy Mosques, will introduce a new digital and regulatory framework by making electronic payments mandatory for all real estate transactions. The move is intended to strengthen governance and prevent undocumented financial flows in one of the Kingdom's most dynamic economic sectors. During its meeting last week, the Council of Ministers approved the executive regulations for the Non-Saudi Real Estate Ownership Law and endorsed the geographical areas where non-Saudis will be permitted to own property. Conditions for foreign individuals and companies According to a copy of the regulations reviewed by Asharq Al-Awsat, the new rules set out strict requirements based on the type of applicant seeking to acquire property. Non-resident individuals: The regulations require non-resident natural persons to first obtain a digital identity, open a local bank account, and secure a Saudi mobile number registered in their name and linked to their digital identity. Foreign companies: Companies must register with the Ministry of Investment in accordance with the procedural guide and fully disclose their direct and indirect owners during registration. The regulations also require the company's legal representative to hold an identity issued under Saudi regulations, while the company must open a bank account in Saudi Arabia under its own name. Once all requirements are met, the ministry will issue the company a dedicated registration number. Registered foreign companies must notify the Ministry of Investment within 15 days if any of the following occurs: a transfer of ownership amounting to 5 percent or more of the company, whether through one transaction or several; the existence of internal arrangements or regulations issued in the country of incorporation that restrict the company's independence or enable another party, inside or outside the company, to exercise significant influence over its decisions or actions, regardless of whether ownership changes. Oversight of non-profit entities For the non-profit sector, the regulations require foreign non-profit entities to register with the National Center for Non-Profit Sector Development before acquiring property or obtaining real rights over real estate, while also disclosing their direct and indirect controlling parties. The regulations require the entity's legal representative to hold a Saudi identity and mandate the opening of a local bank account in the entity's name to obtain its official registration number. The rules also give such entities 15 days to notify the center of any material changes affecting the entity, individuals with influence over its decision-making, or any arrangements that limit its independence. Registered foreign non-profit entities must also notify the center within 15 days of any material changes affecting the entity or individuals who influence its decisions, as well as any internal arrangements or regulations issued in the country of incorporation that restrict the entity's independence or enable another party, whether inside or outside the organization, to exercise significant influence over its decisions or actions. Digitizing procedures As part of Saudi Arabia's digital transformation and efforts to regulate financial flows, the regulations establish two main channels for property ownership procedures: 1. Unified electronic portal: The Real Estate General Authority will establish a dedicated electronic portal for foreign buyers and Saudi companies with foreign shareholders. The platform will be directly linked to the real estate registry, allowing users to submit ownership applications, conduct property transactions, and issue title deeds. 2. Digital payments only: Non-Saudi investors will be required to complete all property-related financial transactions through approved electronic payment methods in accordance with the Saudi Central Bank's (SAMA) Payments and Payment Services Law, with the aim of strengthening oversight and regulatory efficiency. Rules for unlisted Saudi companies The regulations allow Saudi companies that are not listed on the stock market and have foreign shareholders to own property or acquire real rights outside the geographical boundaries of Makkah and Madinah, provided the property is used solely for one of two purposes: carrying out their investment activities or providing housing for their employees. Paragraph 2 of Article 3 states that unlisted companies may own property or acquire other real rights necessary for conducting their business activities and providing employee housing, whether inside or outside the designated geographical boundaries, in accordance with the regulations. Companies must obtain approval from the Ministry of Investment before acquiring property or other real rights. They may also acquire property or real rights within the designated geographical areas, including Makkah and Madinah, without obtaining approval from the Ministry of Investment. Transaction fee The regulations set a fee of 2 percent of the value of a non-Saudi's disposal of real property rights, collected by the Real Estate General Authority. The unified rate applies to all categories of use, including residential and commercial properties, in the major cities and governorates of Riyadh, Makkah, Madinah, and Jeddah. The regulations also provide for a zero-rate exemption in several cases, including property transactions carried out as part of estate distribution, transactions executed under a final court judgment or an order issued by a competent judicial authority, and ownership transfers resulting from expropriation for public benefit in accordance with applicable laws and regulations.
