Law of Real Estate Ownership by Non-Saudis

Purpose and scope

• Governs ownership of real estate in the Kingdom by non-Saudis, whether individuals, companies or funds, and their acquisition of rights in rem over it; it replaced the previous law on non-Saudi real estate ownership and investment.
• The new law has been in force since 4 Ramadan 1447H.

Key rules, rights and obligations

• A non-Saudi may own real estate or acquire rights in rem within the geographic zones set by the Council of Ministers, and a resident may own one residential property outside these zones, except in Makkah and Madinah (Article 2).
• Ownership in Makkah and Madinah is allowed only to Muslim individuals, under conditions set by the regulation (Article 2).
• Unlisted companies with a non-Saudi shareholder, listed companies and investment funds may own under the conditions of the law and its regulation (Articles 3 and 4).
• Ownership must be registered, and a non-Saudi's ownership is established only after entry in the real estate register (Article 8).
• A fee of up to 5% of the value may be imposed on a disposal of real estate by a non-Saudi (Article 9).

Violations, penalties and common problems

• Breach of the law: a warning or a fine of up to 5% of the property's value, capped at SAR 10 million (Article 10).
• False information or data: a fine, and the violator is required to sell the real right acquired (Article 12).
• Common problems: buying in a Saudi person's name to circumvent the law, contracting for property outside the permitted zones, and not completing registration.

Procedures and key deadlines

• The violator may challenge the penalty before the administrative court within sixty days of notification (Article 11).
• Before contracting, check that the property lies within the permitted zones and complete registration in the real estate register.
• Consult the implementing regulation and the decisions setting the zones, which detail the conditions of ownership.

An advisory summary prepared by Al-Bayan Al-Wadih Law Firm. It is not an official text and does not replace the law, its implementing regulations, or advice from a specialised lawyer. The official published text and its amendments prevail.