Mapping the real estate foreign ownership zones

Saudi Arabia has drawn its foreign ownership map — and it tells very different stories depending on which city you’re looking at. The Cabinet approved the executive regulations and geographic zones for non-Saudi real estate ownership last Monday, five months after the law itself entered into force in January without a zone list. The Saudi Properties digital platform is already open for applications.

The zones define more than just location. Each zone specifies what type of right is available — full ownership, usufruct, or other property rights — and may carry its own conditions and permitted ownership percentages. The type of right available in a given zone depends on both the zone and the buyer category.

The zone confirmation is the moment the market has been waiting for. The law “opens Saudi’s real estate market to a new pool of international capital, creating a significantly larger total addressable market for domestic developers to target,” Matthew Green, head of research at CBRE MENA, tells EnterpriseAM. The zones also give the market “much-needed clarity on the specific projects and scope of coverage, clearing a pathway for greater foreign participation.”

Awkward timing? The zone map was initially due in 1Q, but arrived as the conflict was already softening near-term investment appetite. Knight Frank partner and MENA research head Faisal Durrani tells us it lands as the residential sector records a sharp slowdown in transaction volumes, compounded by the regional conflict on top of pre-existing affordability pressure.

REMEMBER- The foreign ownership framework has three moving parts. The law itself — in force since January 2026 — defines who may own, what they may own, and under what conditions. The executive regulation sets out the procedures — registration, identity verification, disclosure, payment, fees, and penalties. The Geographic Zones Document (pdf) is the final piece of the puzzle, mapping where foreign ownership is permitted and what type of right is available in each location.

The Riyadh & Jeddah playbooks

Riyadh’s list reads like a PIF portfolio. The approved zones are Qiddiya, New Murabba, Diriyah Gate, King Salman Park, the King Abdullah Financial District (KAFD), Sedra, the Sports Boulevard and arts district, and King Salman International Airport — plus a Transit-Oriented Development (TOD) site. These are overwhelmingly government-controlled mega-projects, not the general Riyadh residential or commercial market. The capital’s zones are “largely concentrated around the city’s high-growth northern and eastern expansion corridors and prime financial districts — a more targeted approach focusing on new large-scale projects, with a more institutional slant,” Green says.

The playbook is familiar. Riyadh’s restricted scope “mirrors the approach adopted by several regional markets when they first opened their real estate sectors to international buyers,” Durrani says. Starting with strategically important projects lets the authorities manage the pace of the opening, test demand from international buyers, and support absorption across the Kingdom’s flagship developments, he tells us. As the framework matures and investor confidence grows, “there may be scope to expand access to a broader range of residential locations across the city and the Kingdom.”

The TOD addition is worth noting. Green says the inclusion of TODs — many of which fall outside the boundaries of the gigaprojects — extends the practical scope of the law beyond what many expected. They give buyers exposure to metro-linked mixed-use and residential districts beyond the headline projects, Durrani said.

SOUND SMART- The TOD model aims to create a walkable, connected community centered around public transport access and featuring hotels, residential units, and commercial spaces.

MEANWHILE- Jeddah opens considerably wider. The approved zones include the city center plus 55 development zones — a more granular and commercially varied list with more entry points for international buyers. Green sees the wider Jeddah list as deliberate, spreading beyond flagship projects like Jeddah Central into a mix of established and emerging coastal developments, “perhaps targeting a slightly different investor profile to Riyadh.” Durrani ties the wider door to geography, arguing that “Jeddah’s historic position as the gateway to the Holy Cities of Makkah and Madinah is the likely reason for the somewhat broader initial international buyer access.”

The holy cities

Makkah and Madinah are the most complex part of the framework. Both cities have named zone lists. Makkah's include Abraj Makkah, Al Manar, Burj Ajyad, King Salman Gate, Tilal Village, Jabal Omar, Dhakhir Makkah, Dahiyat Sumou, Masar, and Makkah Zones 1 and 2. Madinah’s include Al-Ghurra, Madinah Zones 1 and 2, Al-Mahwa, Darat Al Hijra, Downtown Madinah, Diyar Al- aqar, Rua Al Madinah, Knowledge Economic City, and Mishraf.

Two categories are shut out entirely. Non-Saudi companies incorporated outside the Kingdom are completely excluded from Makkah and Madinah with no exceptions. Non-Saudi nonprofit entities are similarly barred. Saudi companies with foreign shareholding may own there, but face hard caps — non-Saudi ownership across the company cannot exceed 49%, and no individual non-Saudi shareholder may hold more than 5%.

Yes to funds, no to corporate buyers: The framework imposes no ownership percentage restrictions on funds and SPVs, a distinction that aims to “promote the entry of institutional capital into the holy cities over foreign retail investors and non-Saudi operated company platforms,” according to Green. The government is also looking to drive higher investment liquidity and diversify away from the Saudi REIT-dominated capital structure that currently prevails, he says.

Joint ventures and partnership structures remain attractive regardless, “due to the potential for sharing pools of capital, accessing low-interest debt facilities, and benefiting from privileged access to development land and other off-market investment [prospects],” Green adds.

The holy city zones are not a conventional real estate play. The named projects are hospitality, pilgrimage-economy, and mixed-use developments. The buyer profile is Muslim high-net-worth individuals from the Gulf and beyond — Indonesians, Malaysians, Pakistanis, and diaspora communities — for whom property near the Haramain is driven by religion and the prospect of retiring in the holy cities, not investment returns, Durrani says. As Durrani puts it, these are “very different reasons to the way the global Muslim community views Riyadh, which is largely an investment play.”

Knight Frank’s data bears this out: A Knight Frank survey released earlier this year found Makkah was the primary target for Muslim respondents (59%), as well as Indian buyers (56%) and Algerian buyers (45%). Meanwhile, Madinah leads among UK (59%) and Malaysian (58%) buyers.

Who can buy

The framework creates distinct tiers of access, each with different geographic scope and conditions.

Iqama holders get the broadest practical access of any non-GCC category. They can own inside the geographic zones in all cities, and can also own one residential property for personal use outside the zones in any city except Makkah and Madinah. That out-of-zone right puts the general residential market within reach of Saudi Arabia’s roughly 13 mn expatriates.

Premium Residency holders get the same zone access and the same one-property-outside-zones right. One clause worth noting is that the framework states explicitly that buying property does not reduce or affect any rights or benefits attached to their Premium Residency status.

Non-resident non-Saudis are confined to the geographic zones entirely — no out-of-zone right under any circumstances. Three prerequisites must be in place before they can even file an application — a digital ID obtained through a Saudi embassy or consulate abroad, a Saudi bank account in their name, and a Saudi contact number linked to that digital ID.

GCC nationals get the broadest individual access of any non-Saudi category. Inside the zones, all cities apply with Islam required for Makkah and Madinah. Outside the zones, they can own for residence or investment in all cities except the holy cities.

The mechanics of getting in

Costs add up: The existing 5% Real Estate Transfer Tax applies to all transactions. The new framework adds a disposal fee of up to 5% on transfers by non-Saudis — potentially bringing the total tax burden on a resale to around 10% of property value, before agent fees and registry costs.

The transparency requirements are real: All buyers register through the Saudi Properties portal, corporate buyers disclose their beneficial ownership structures, and any post-purchase ownership change of 5% or more must be reported within 15 days — an obligation that fires repeatedly for PE-backed platforms or any vehicle with active capital movement. Foreign companies carry the heaviest load, requiring full Investment Ministry registration, disclosure of all direct and indirect owners, a legal representative with a Saudi-issued identity, and a local bank account in the company’s name.