Foreign Real Estate Investment in Saudi Arabia 2025: Complete Guide to Establishing Your Company and Owning Property in the Largest Arab Real Estate Market

Saudi Arabia is opening its doors to foreign investors in one of the largest real estate markets in the region and the world. With Vision 2030 and mega projects exceeding one trillion dollars in value, Saudi Arabia has become an unparalleled real estate investment destination. Whether you're an international company seeking expansion or an individual investor looking for an exceptional opportunity, this guide provides everything you need to know.

Why Invest in Saudi Arabian Real Estate?

A Massive and Growing Real Estate Market

The Saudi real estate market is one of the largest in the Middle East, valued at over one trillion Saudi Riyals, and expected to reach $2.2 trillion in the coming years. The market is experiencing annual growth exceeding 8%, with projections to reach $101 billion by 2029.

Vision 2030 and Economic Transformation

Saudi Vision 2030 aims to diversify the economy away from oil, targeting investments exceeding $1.5 trillion in the real estate sector. The real estate sector's contribution to the national economy is expected to reach 10% by 2030, according to Standard & Poor's estimates.

Mega Projects with Unprecedented Investment Opportunities

The Kingdom is implementing some of the world's largest projects:

• NEOM: The city of the future at $500 billion cost, spanning 26,500 km² on the Red Sea coast, including The Line, Trojena, Oxagon, and Sindalah
• Red Sea Project: A luxury tourism destination with 50 hotels, 8,000 rooms, and over 1,000 residential properties across 90 islands
• Qiddiya: The world's largest entertainment city south of Riyadh
• Diriyah: A historical and cultural project worth 75 billion Riyals
• ROSHN: The leading real estate developer under the Public Investment Fund

Types of Real Estate Investment Available to Foreigners

1. Residential Properties

Foreign investors can own villas, apartments, and residential units in most areas of the Kingdom, with promising opportunities in modern residential compounds and integrated projects.

2. Commercial Properties

Including offices, commercial towers, and shopping centers, with increasing demand especially in Riyadh, Jeddah, and the Eastern Province.

3. Hospitality and Tourism Properties

With the Kingdom targeting 150 million tourists annually, hotel investments are among the most attractive sectors with high returns.

4. Off-Plan Projects

An opportunity to enter projects under development at competitive prices with expected capital returns upon completion.

5. Land and Real Estate Development

For licensed companies, land can be owned and developed provided the project value is not less than 30 million Riyals and is invested within 5 years.

Who Can Invest in Saudi Real Estate?

Foreign Individuals

• Residents: Legal residents can own one property for personal residence with a permit from the Ministry of Interior
• Premium Residency Holders: Right to own residential and commercial properties in all areas (except Mecca and Medina)
• GCC Citizens: Treated similarly to Saudi citizens in property ownership

Foreign Companies

• Companies licensed by the Ministry of Investment (MISA) can own properties necessary for their activities
• Licensed real estate development companies (minimum 30 million Riyals per project)
• Listed joint-stock companies according to Capital Market Authority conditions

Non-Saudi Property Ownership Regulations

The updated system was issued by Royal Decree No. (M/91) of 1443H, including the following provisions:

General Ownership Requirements

• Obtaining a license from the competent authority (Ministry of Investment or Ministry of Interior as applicable)
• Clean criminal record inside and outside the Kingdom
• Using the property according to the purpose specified in the license
• Compliance with specified timeframes for investment (5 years for development projects)

Geographic Restrictions

• Mecca and Medina: Ownership not permitted, but Muslims can lease for two years, renewable
• Border Areas: Subject to special restrictions
• Other Areas: Available within the geographic scope defined by the Council of Ministers

Fees and Taxes

• Real Estate Transaction Tax: 5% of property value
• No fees on property transfer for foreigners
• 15% VAT on commercial properties

How to Establish a Foreign Real Estate Company in Saudi Arabia

Step One: Registration with Ministry of Investment (MISA)

The Ministry of Investment is responsible for foreign investment licensing. Applications can be submitted electronically through the services portal:

1. Create an account on the Ministry of Investment portal: misa.gov.sa
2. Select the license type (Real Estate License for companies operating in the real estate sector)
3. Submit required documents

Required Documents

• Copy of the company's commercial registration from its home country, authenticated by the Saudi Embassy
• Financial statements for the last fiscal year, certified by a recognized accounting firm and authenticated by the Saudi Embassy
• Appointment of General Manager with defined authorities, authenticated by the Saudi Embassy
• Proof of financial capacity for investment
• Business plan for the real estate project

Step Two: Commercial Registration Issuance

1. Reserve a trade name from the Ministry of Commerce
2. Submit company establishment application through the Saudi Business Center
3. Choose legal form (Limited Liability Company is most common)
4. Deposit capital in a Saudi bank
5. Receive commercial registration

Step Three: Registration with Other Entities

• Zakat, Tax and Customs Authority (ZATCA)
• Social Insurance
• Ministry of Human Resources
• General Authority for Real Estate (for real estate activities)

Required Capital

• For general real estate activities: According to Ministry of Investment requirements
• For real estate development projects: Minimum 30 million Riyals per project
• For small companies: Companies with activities under 1 million Riyals may operate without a local headquarters in some cases

Premium Residency: Gateway to Real Estate Investment

The Kingdom launched the Premium Residency system to attract investors and talents, with several products serving real estate investors:

Property Owner Residency

• Requirement: Own residential property worth at least 4 million Riyals
• Property must be residential and existing (not land or under construction)
• Property must not be mortgaged
• Certified valuation from the Saudi Authority for Accredited Valuers (Taqeem)
• Fees: SAR 4,000
• Duration: Linked to property ownership

Business Investor Residency

• Requirement: Investment of 15 million Riyals and creating 10 jobs annually
• Possibility of obtaining permanent residency
• Exemption from Nitaqat program for 3 years

Premium Residency Benefits

• Own properties in all areas (99-year usufruct right in Mecca and Medina)
• Establish companies with 100% ownership without a Saudi partner
• Sponsor family and workers
• Freedom of movement and work
• Use citizen lanes at airports

Competitive Advantages of Real Estate Investment in Saudi Arabia

Stimulating Investment Environment

• 100% Ownership: No need for a Saudi partner in most activities
• No Sponsor: Sponsorship system eliminated for licensed companies
• Profit Transfer: No restrictions on transferring profits abroad
• Digital Procedures: Most services are electronic and fast

Stability and Security

• One of the safest countries in the world
• Political and economic stability
• Advanced judicial system to protect investor rights
• Real estate registration system ensures property protection

Advanced Infrastructure

• Modern road and transportation network
• Multiple international airports
• Ports on the Red Sea and Arabian Gulf
• Advanced digital infrastructure

Practical Steps to Get Started

For Individuals

1. Determine appropriate residency type (regular resident or premium residency)
2. Apply for permit from Ministry of Interior or Premium Residency Center
3. Search for suitable property through trusted platforms
4. Conduct certified property valuation
5. Complete purchase and registration process

For Companies

1. Study the market and identify investment opportunity
2. Apply for investment license from MISA
3. Establish legal entity (Limited Liability Company)
4. Obtain sector licenses from the General Authority for Real Estate
5. Open bank accounts and deposit capital
6. Begin commercial activity

Important Links

• Ministry of Investment (MISA): misa.gov.sa - Investment Licensing
• General Authority for Real Estate: rega.gov.sa - Real Estate Licenses
• Premium Residency Center: pr.gov.sa - Premium Residency
• Ministry of Commerce: mc.gov.sa - Commercial Registration
• Saudi Business Center: business.sa - Company Establishment
• Invest Saudi Platform: investsaudi.sa - Investor Guide

Frequently Asked Questions

Can a foreigner own property in Saudi Arabia?

Yes, under the updated system, licensed foreigners can own properties in most areas of the Kingdom, except Mecca and Medina where only usufruct rights are available.

What is the minimum real estate investment?

It varies by investment type. For property owner residency: 4 million Riyals. For real estate development projects: minimum 30 million Riyals.

Do I need a Saudi partner?

No, foreign companies can own 100% in most real estate activities through licensing from the Ministry of Investment.

How long do licensing procedures take?

Usually 2-4 weeks for investment license, and a few days for commercial registration through electronic services.

Can I rent out the property?

Yes, foreigners can rent their properties and achieve rental returns.

What are the expected returns?

Rental yields range from 5-8% annually, with expected capital returns exceeding 25% in some areas and projects.