Investment of property for foreigners in the Kingdom

The Saudi regime allows foreigners of legal or natural person to invest in real estate in the territory of the Kingdom of Saudi Arabia, but this right has been qualified and limited to cases in order not to dispute the rights of the citizen and to preserve the sovereignty of the Kingdom over its territory.

These conditions have been clarified in the foreign investment regime as follows:

  1. A non-Saudi Arabian investor who is a natural or legal person authorized to engage in any professional, occupational or economic activity may own the property necessary for that activity, including the property necessary for his or her residence and that of his or her employees, with the consent of the issuing authority.
  2. Property may also be rented, taking into account article V of the foreign investment regime.
  3. If the licence includes the purchase of buildings or land for construction and investment by sale or lease, the total cost of the project shall not be less than 30 million SAR, and the Council of Ministers may amend this amount. The property is also required to be invested within five years of ownership. (Article 1 of the foreign investment regime).

As for disciplines, they are mentioned in article VI of the foreign investment regime:

  1. The investment activity to be authorized should not be included in the list of activities excluded from foreign investment.
  2. The technical specifications of the product and its production method shall be in accordance with Saudi, Gulf or international standards.
  3. The applicant has not been given final judgements or decisions because of fundamental breaches of the provisions of the foreign investment regime
  4. The applicant for the licence has not already been sentenced, including for financial or commercial offences, within or outside the Kingdom.
  5. The applicant must comply with the conditions, controls, declarations and pledges attached to the application form.
  6. The granting of a licence shall achieve the objectives of the investment and the purposes of the General Commission for Investment.

And the enforcement of these conditions and controls to applications for renewal of the licence.

In addition to the exclusion of the two Holy Mosques from this licence, where foreigners are not entitled to own property within the limits of the two sanctuaries except in the event of inheritance of the right of ownership or easement, disguising their ownership of real estate within these borders is an offence punishable by up to the sale of the property at a public auction.

Taking into account the existence of a special regulation for the ownership of property by citizens of the GCC States members of the Council for Cooperation for the Purpose of Housing and Investment.

Procedures for issuing such licences in accordance with article VII of the Foreign Investment Regime:

The applicant or his/her legal representative must fill in the form of the application for an investment licence electronically through the official website of the Commission and complete the following documents in Arabic or translate them into Arabic from an accredited office in the Kingdom:

  1. A copy of the commercial registration and contract of incorporations of the facility in its country, certified by the competent authorities and the Saudi embassy.
  2. A copy of the trade name booking from the Ministry of Commerce and Industry.
  3. Draft contract for the incorporation of a limited liability company.
  4. Draft contract of incorporation and statute of the joint-stock company.
  5. The decision of the partners to invest in the Kingdom, indicating the names of the partners, the capital, the ratio of ownership of each partner, the main position of the enterprise and the nature of the activity, the appointment of the Director-General and the determination of his powers, certified by the competent authorities and the Saudi Embassy.
  6. A copy of the general manager’s passport.
  7. A copy of the national identity and family register if one of the partners is a citizen of Saudi Arabia, and a copy of the commercial register for proof of occupation or civil status.
  8. Provision of preliminary approval by the relevant ministries or bodies of the Kingdom if the activity requires the consent of the Commission concerned.
  9. Presentation of a detailed plan of action that accurately demonstrates the project’s ability to achieve investment objectives, including its contribution to increasing the Kingdom’s income, the jobs it will provide to citizens, how the project will contribute to enhancing competition, improving services and diversifying consumer choices, the strategic dimensions of the project on investment in the Kingdom, the benefit to the city that will be the centre of the project and its region, and the employment and training plan, which will include an estimate of the number of workers and proportion of Saudis in each department and level.
  10. To submit a budget for a business applying for a licence from outside the Kingdom for a period of not less than 3 years indicating the financial integrity of the enterprise, approved by an accountant’s office and certified by the agency concerned with commercial activities and taxes in its country, and by the Embassy of the Kingdom.
  11. Demonstrate financial capacity to invest in proportion to the project capital and share of each partner, and in proportion to the business plan submitted to the project.
  12. Any documents, data or other information requested by the Commission.

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