According to a statement released by Saudi’s Capital Market Authority (CMA), financial market institutions are now allowed to accept the subscriptions of non-Saudis in the real estate funds that invest Makkah and Madinah, Arab News reports.
CMA stressed to financial institutions that when managing the investments of investment funds in real estate or when liquidating those funds, it’s crucial for them to adhere to the system of non-Saudis owning and investing in real estate.
According to the ownership system for non-Saudis in the Kingdom, non-Saudis can own real estate in Saudi Arabia for their own residence after obtaining a license from the Ministry of Interior.
Foreign representations, on the other side, must obtain a license from the Kingdom’s Minister of Foreign Affairs to own their official headquarters.
CMA indicated that the decision will contribute to strengthening the Saudi Vision 2030’s pillars aiming to make the Kingdom’s financial market attractive to local and foreign investment, in will play a pivotal role in developing the economy and diversifying its sources of income and will also contribute to relying on the financial market as a diversified financing channel.
The Authority hopes that the funds will contribute to financing many vital activities in the economy and is counting on activating the role of investment funds as a tool for financing within its strategic plan.
Alaa Al Ibrahim, head of the Capital Markets Funds Sector at Alawwal Capital, said that this will have positive results on real estate funds of all kinds, adding that now that a major obstacle for residents in the Kingdom and those abroad to invest in Makkah and Madinah has been removed, many investors will want to invest in real estate there.
He stressed that it doesn’t mean this would allow non-Saudis to own real estate shares in real estate companies that target the two holy cities, since ‘the fund manager has all the powers and authority to direct investments in the fund and lead the fund’.
Al Ibrahim does not believe that CMA would allow investment by non-Saudis directly in these companies in near future, noting there may be a special regulation for public joint stock companies and investors to invest in these companies.
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