Saudi Arabia has published the executive regulations for its Law on Real Estate Ownership by Non-Saudis, establishing a clear operational framework for foreign individuals, companies, and non-profits looking to invest in the Kingdom’s property market. The new rules, released on July 3, introduce digital identity requirements, a centralized electronic portal, and specific disclosure obligations, moving the landmark law from legislation to implementation.
Quick Facts
- Digital ID and local bank account required.
- New e-portal for all property applications.
- A 2% disposal fee in major cities.
- Strict disclosure rules for corporate owners.
Digital Identity and Disclosure Mandates
The regulations provide long-awaited clarity for international buyers by standardizing the entry process. Foreign individuals who are not residents must now obtain a Saudi-issued digital identity, open a local bank account, and link a Saudi mobile number to that identity before purchasing property. All related financial transactions are required to go through electronic payment systems approved by the Saudi Central Bank.
For foreign companies, the requirements include registering with the Ministry of Investment, fully disclosing their direct and indirect ownership structure, and appointing a legal representative with a recognized Saudi identity. These companies must also notify the ministry within 15 days of any ownership transfer of 5% or more, or any governance changes that could shift control. Similar rules apply to foreign non-profits.
A Centralized E-Portal and New Fee Structure
To streamline the process, an electronic portal operated by the Real Estate General Authority will handle all applications for property ownership and related transactions, linking them directly to the Kingdom’s real estate registry.
The new framework also permits Saudi companies with foreign shareholders (not listed on the local stock exchange) to own property for business operations or employee housing, subject to Ministry of Investment approval.
Additionally, a 2% fee is being introduced on certain disposals of real estate rights by non-Saudis in Riyadh, Makkah, Madinah, and Jeddah. However, several transactions are exempt, including inheritances, court-ordered transfers, and transfers to public entities.
Enforcement and Penalties
To ensure compliance, the regulations authorize inspectors to monitor adherence to the new rules and establish a clear schedule of penalties for violations. Providing false or misleading information to obtain ownership can result in fines of up to 5% of a property’s value, capped at SAR 10 million, in addition to the forced sale of the property. Escalating fines will also be applied for failing to disclose required ownership changes or for obstructing inspections.
About the Real Estate General Authority
The Real Estate General Authority is the Saudi government body responsible for regulating and stimulating the real estate sector in the Kingdom. It works on developing legislation, monitoring market activities, and enhancing transparency to create an attractive investment environment for both local and international stakeholders.
Source: Waya
