Foreign Citizens Can Now Invest In Property In Makkah And Medina

JAKARTA - Foreign nationals (WNA) can now invest in properties in Makkah and Medina, Saudi Arabia. This new policy follows the signing of an agreement at the Saudi Capital Market Authority or CMA.

The foreigner's investment path passes through Saudi Arabia-listed companies that own property in Makkah and Medina.

This policy, which will soon be effective, is said to increase the competitiveness of the capital market and is in line with the goal of diversifying the economy Vision 2030 of the Kingdom.

"Through this announcement, the Capital Market Authority aims to stimulate investment, increase attractiveness and efficiency of the capital market, and strengthen regional and international competitiveness while supporting the local economy," the CMA wrote in a written statement, quoted by Arab News, Sunday, January 28.

Although foreigners are allowed to buy property in Makkah and Medina, there are still special restrictions in the holy cities.

Generally, property ownership in holy cities is limited to Saudi citizens, foreigners are only allowed to rent.

Based on the new guidelines, foreign investment is limited to shares or conversion debt instruments from listed companies. Total ownership, including individuals and legal entities belonging to foreigners, is limited to 49 percent of the company's shares.

There is another binding policy, namely strategic foreign investors are prohibited from holding shares in companies that own property in Makkah and Medina.

This Saudi move comes amid reforms in the region, with most neighboring countries allowing foreigners to own property, especially in free zones or areas specified with certain boundaries.

The change is also designed to stimulate direct foreign investment (FDI) into the Saudi Kingdom's capital market, as well as strengthen regional and international competitiveness.

"This includes attracting foreign capital and providing the necessary liquidity for current and future projects in Mecca and Medina through investment products available in the Saudi market, positioning them as the main funding source for this distinctive development project," the CMA statement said.

The CMA also mentioned this new policy to strengthen the real estate sector and attract more FDIs to the Kingdom of Saudis in line with one of the main goals outlined under the Vision 2030 program. In the program, Saudi Arabia targets to reduce its dependence on crude oil revenue and diversify its economy.

The Kingdom of Saudi in its program targets to withdraw 100 billion US dollars in FDI by the end of the decade. The effort was aligned with various initiatives and reforms to increase the attractiveness of the capital market by the Saudi government agency.