The Saudi Capital Market Authority announced, on Monday November 8th, 2021, that it is allowed for foreigners to own real estates in the cities of Makkah and Madinah, but through investment funds and not direct ownership.
They also mentioned in their statement that they will accept non-Saudi in the real estate fund. A part of these funds or all of them will be used in investments of real estate inside the cities of Makkah and Madinah.
This decision means that for the first time, in history, foreigners are allowed to own lands in the cities of Makkah and Madinah through these real estate funds, without letting them manage these lands unlike the direct owning of lands that give the owners the freedom to manage their lands, which still not allowed.
Saudi Arabia prevents those foreigners from owning lands in Makkah and Madinah directly, the Authority said that this decision will attract the local investors and the foreigners and this will play a great role in diversification of the economy.
In 2016, Saudi Arabia announced a financial economic reform program, that aims to vary the sources of income aside from the oil sources which is the main income source of the country.
In June 2015, Saudi Arabia allowed the international institutional investors to buy local stock directly, while before, it was only swap agreements.
This step came to help the country, the biggest exporter of oil in the world, to attract more foreign capital and reduce its dependence on oil revenues.
These Saudi economical plans helped it to enter an economical competition with UAE, to gain more investments.
Saudi Arabia is seeking to revitalize its economic plan for 2030, which aims to diversify its oil-dependent economy. Saudi Crown Prince Mohammed bin Salman hopes to stimulate investment opportunities in the Kingdom to reach 6 trillion dollars over the next decade, half of them representing new projects.
Moreover, UAE is seeking to rapidly develop the technological sector and stay away from lagging industries like real estate and building sectors; while UAE is dominant in the trade sector, in addition to Dubai’s position as a stronghold of almost all large multinational corporations that have a presence in the region.
