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REAL ESTATE SAUDIA ARABIA

Law of Real Estate Ownership by Non-Saudis

Royal Decree No. (M/14) dated 19/01/1447 AH
With the help of God Almighty,
In the Name of God, the Most Gracious, the Most Merciful,
We, Salman bin Abdulaziz Al Saud,
King of the Kingdom of Saudi Arabia,

And after reviewing Council of Ministers Resolution No. (42) dated 13/01/1447 AH;
We have decreed the following:

Pursuant to Article (Seventy) of the Basic Law of Governance, issued by Royal Order No. (A/90) dated 27/08/1412 AH;

Pursuant to Article (Twenty) of the Law of the Council of Ministers, issued by Royal Order No. (A/13) dated 03/03/1414 AH;

Pursuant to Article (Eighteenth) of the Law of the Shura Council, issued by Royal Order No. (A/91) dated 27/08/1412 AH;

After reviewing Shura Council Resolution No. (333)/(33) dated 27/12/1446 AH;

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With the help of God Almighty,
In the Name of God, the Most Gracious, the Most Merciful,
We, Salman bin Abdulaziz Al Saud,
King of the Kingdom of Saudi Arabia,

  • Pursuant to Article (Seventy) of the Basic Law of Governance, issued by Royal Order No. (A/90) dated 27/08/1412 AH;
  • Pursuant to Article (Twenty) of the Law of the Council of Ministers, issued by Royal Order No. (A/13) dated 03/03/1414 AH;
  • Pursuant to Article (Eighteenth) of the Law of the Shura Council, issued by Royal Order No. (A/91) dated 27/08/1412 AH;
  • After reviewing Shura Council Resolution No. (333)/(33) dated 27/12/1446 AH;
  • And after reviewing Council of Ministers Resolution No. (42) dated 13/01/1447 AH;
    We have decreed the following:

First

Approval of the Law of Real Estate Ownership by Non-Saudis, in the attached form.

Second

The enforcement of the Law referred to in Clause (First) of this Decree shall not prejudice the following:

  1. Real estate ownership rights legally established for non-Saudis and corporate entities prior to the enforcement of its provisions.
  2. Statutory provisions that prohibit real estate ownership in specific locations, areas, and sites, taking into account the provisions of paragraph (1) of this clause.

Third

Repeal of Royal Decree No. (44) dated 29/11/1377 AH.

Fourth

His Royal Highness, the Prime Minister, the Ministers, and the heads of the relevant independent agencies—each within their respective jurisdiction—shall implement this Decree of ours.
Salman bin Abdulaziz Al Saud

Council of Ministers Resolution

Council of Ministers Resolution No. (42) dated 13/01/1447 AH
In the Name of God, the Most Gracious, the Most Merciful,
The Council of Ministers,

  • After reviewing the file received from the Royal Court under No. 1180 dated 05/01/1447 AH, concerning the draft Law of Real Estate Ownership by Non-Saudis;
  • After reviewing the aforementioned draft Law;
  • After reviewing Royal Decree No. (44) dated 29/11/1377 AH;
  • After reviewing the Law of Real Estate Ownership and Investment by Non-Saudis, issued by Royal Decree No. (M/15) dated 17/04/1421 AH;
  • After reviewing the Regulation of Real Estate Ownership by Citizens of the GCC States in Member States for Residence and Investment, issued by Royal Decree No. (M/22) dated 03/04/1432 AH;
  • After reviewing Memorandums No. (3290) dated 12/09/1445 AH, No. (4230) dated 17/10/1445 AH, No. (12) dated 12/11/1445 AH, No. (150) dated 09/01/1446 AH, No. (3404) dated 26/12/1446 AH, No. (4135) dated 23/12/1446 AH, No. (4152) dated 26/12/1446 AH, and No. (47) dated 08/01/1447 AH, prepared by the Bureau of Experts at the Council of Ministers;
  • After reviewing the minutes of the Council of Political and Security Affairs No. (M S T/91-9/46) dated 29/09/1446 AH;
  • After reviewing the recommendation prepared by the Council of Economic and Development Affairs No. (73-43/46/D) dated 29/10/1446 AH;
  • After considering Shura Council Resolution No. (333)/(33) dated 27/12/1446 AH;
  • And after reviewing the recommendation of the General Committee of the Council of Ministers No. (312) dated 11/01/1447 AH;
    Resolves the following:

First

Approval of the Law of Real Estate Ownership by Non-Saudis, in the attached form.

Second

The enforcement of the Law referred to in Clause (First) of this Resolution shall not prejudice the following:

  1. Real estate ownership rights legally established for non-Saudis and corporate entities prior to the enforcement of its provisions.
  2. Statutory provisions that prohibit real estate ownership in specific locations, areas, and sites, taking into account the provisions of paragraph (1) of this clause.

Third

Repeal of Royal Decree No. (44) dated 29/11/1377 AH. A draft Royal Decree has been prepared accordingly, the form of which is attached hereto.

Fourth

Taking the necessary statutory procedures to terminate the application of the provision of Article (Fourth) of the Regulation of Real Estate Ownership by Citizens of the GCC States in Member States for Residence and Investment, issued by Royal Decree No. (M/22) dated 03/04/1432 AH, concerning real estate located within the cities of Makkah and Medina, provided that the termination becomes effective from the date of enforcement of the Law referred to in Clause (First) of this Resolution.
Prime Minister

Text of the Law: Law of Real Estate Ownership by Non-Saudis

Article 1

The following words and phrases—wherever they appear in this Law—shall have the meanings assigned to them opposite each, unless the context requires otherwise:

  • The Law: Law of Real Estate Ownership by Non-Saudis.
  • The Regulations: The Executive Regulations of the Law.
  • The Authority: The Real Estate General Authority.
  • Non-Saudi:
  1. A natural person who does not hold Saudi nationality.
  2. A non-Saudi company.
  3. A non-Saudi non-profit entity.
  4. Any other non-Saudi corporate entity determined by a resolution of the Council of Ministers.

Article 2

  1. A non-Saudi may own real estate or acquire other real rights (rights in rem) over real estate in the Kingdom, within the geographical scope determined by the Council of Ministers pursuant to paragraph (2) of this Article.
  2. A resolution by the Council of Ministers, based on a proposal by the Board of Directors of the Authority and the approval of the Council of Economic and Development Affairs, shall determine the following:
  • A- The geographical scope within which a non-Saudi may own real estate or acquire other real rights over real estate.
  • B- The types of real rights over real estate that a non-Saudi may acquire.
  • C- The maximum percentage of non-Saudi ownership within the geographical scope.
  • D- The maximum duration allowed for a non-Saudi to acquire usufruct rights over real estate.
  • E- Any controls related to non-Saudi ownership of real estate or the acquisition of real rights over it.
  1. In addition to the rights of non-Saudis provided for in paragraphs (1) and (2) of this Article, a non-Saudi natural person legally residing in the Kingdom may own a single property designated as their residence outside the geographical scope referred to in paragraph (2) of this Article, with the exception of the cities of Makkah and Medina. The Regulations shall determine the rules governing this paragraph.
  2. The right of a non-Saudi to own real estate or acquire other real rights referred to in paragraph (1) of this Article over real estate in the cities of Makkah and Medina shall be restricted to Muslim natural persons.

Article 3

  1. A company not listed on the Saudi Stock Exchange, established in accordance with the provisions of the Saudi Companies Law, and in which one or more natural or corporate persons who do not enjoy Saudi nationality participate in the ownership of its capital, may own real estate or acquire other real rights over real estate within the geographical scope referred to in paragraph (2) of Article (Second) of the Law, including the cities of Makkah and Medina.
  2. Subject to the provisions of paragraph (1) of this Article and any advantages granted by other laws, the company referred to in paragraph (1) of this Article may own real estate or acquire other real rights over real estate necessary for exercising its activities and for housing its employees, whether inside or outside the geographical scope referred to in paragraph (2) of Article (Second) of the Law, in accordance with what is specified by the Regulations.

Article 4

Companies listed on the Saudi Stock Exchange established in accordance with the provisions of the Companies Law, investment funds, and legally licensed special purpose vehicles (SPVs) may own real estate and acquire other real rights over real estate in the Kingdom, including the cities of Makkah and Medina, in accordance with the provisions of the Capital Market Law and its executive regulations, and the rules set by the Capital Market Authority (CMA) in coordination with the Real Estate General Authority and other relevant entities.

Article 5

The application of this Law shall not prejudice the provisions of the Premium Residency Law, the Regulation of Real Estate Ownership by Citizens of the GCC States in Member States for Residence and Investment, or other applicable laws that grant a non-Saudi better rights regarding real estate ownership and the acquisition of real rights over it.

Article 6

The ownership of real estate or the acquisition of other real rights over real estate in the Kingdom by a non-Saudi shall not entail any rights or privileges other than the rights prescribed legally to the owner of the real right.

Article 7

On the basis of reciprocity, diplomatic missions accredited to the Kingdom may own their official headquarters and the residence of their head and members. International and regional organizations, within the limits of the agreements governing them, may also own their official headquarters, provided that the approval of the Ministry of Foreign Affairs is obtained.

Article 8

  1. A non-Saudi company, non-Saudi non-profit entity, or a non-Saudi entity determined by a resolution of the Council of Ministers, as referred to in paragraphs (2), (3), and (4) of the definition of “Non-Saudi,” must register with the competent authority before owning real estate or acquiring other real rights over real estate in the Kingdom, in accordance with what is specified by the Regulations.
  2. The ownership of real estate or acquisition of other real rights over real estate in the Kingdom by a non-Saudi shall be valid after it is registered with the Real Estate Registry in accordance with the regulating provisions.

Article 9

Without prejudice to any legally prescribed fees or taxes, a fee collected by the Authority shall be imposed on the value of the non-Saudi’s disposal of real rights over real estate in the Kingdom, not exceeding (5%) of that value.

Article 10

  1. Without prejudice to any harsher penalty provided for in any other law, anyone who violates the provisions of this Law or the Regulations shall be punished with any of the following:
  • A- A warning.
  • B- A fine not exceeding (5%) of the value of the real right subject of the violation, up to a maximum of (10,000,000) ten million Riyals.
  1. The Regulations shall determine a schedule of violations and their prescribed penalties based on the provisions of the Law and the Regulations, provided that the severity, circumstances, context, and effects of the violation are taken into account when determining the penalty.

Article 11

  1. By a resolution of the Board of Directors of the Authority, one or more committees consisting of no fewer than (three) legal specialists shall be formed to review violations and impose the penalties stipulated in Article (Tenth) of the Law.
  2. The working rules, procedures, and remunerations of the committee members shall be determined by a resolution of the Board of Directors of the Authority.
  3. Decisions of the committee may be appealed before the Administrative Court within (sixty) days from the date of notification.

Article 12

  1. As an exception to the provisions of Article (Tenth) of the Law, and without prejudice to any harsher penalty provided for in any other law, a non-Saudi who intentionally provides incorrect or misleading information that leads to their ownership of real estate or acquisition of any other real rights over real estate shall be punished with the following:
  • A- A fine not exceeding (5%) of the value of the real right subject of the violation, up to a maximum of (10,000,000) ten million Riyals.
  • B- The forced sale of the real right over the real estate.
  1. The Public Prosecution shall have jurisdiction over the investigation and prosecution of the act referred to in paragraph (1) of this Article, and the competent court shall review it and impose the penalty.
  2. If the court rules to sell the real right in accordance with paragraph (1) of this Article, the perpetrator shall receive the price of the real right or what they paid to acquire it, minus fines, any other legally prescribed taxes or fees, and sale expenses, whichever is less. The remaining proceeds of the sale shall be transferred to the State Public Treasury.

Article 13

  1. The Council of Ministers shall issue the Regulations based on a proposal by the Board of Directors of the Authority and the approval of the Council of Economic and Development Affairs within one hundred and eighty days from the date of publication of the Law in the Official Gazette, and it shall come into effect from the date of its enforcement.
  2. The Regulations shall determine:
  • A- The procedures for a non-Saudi to acquire real rights over real estate in the Kingdom.
  • B- The requirements for enforcing the provisions of the Law prescribed for a non-Saudi who is a non-resident in the Kingdom.
  • C- The amount of the fee mentioned in Article (Ninth) of the Law, provided it is determined based on the type of real right of the property, its purpose, and geographical scope.
  • D- Disposals subject to a zero-rate fee, and the necessary cases, conditions, and controls for that.

Article 14

This Law shall supersede the Law of Real Estate Ownership and Investment by Non-Saudis, issued by Royal Decree No. (M/15) dated 17/04/1421 AH, and shall repeal all provisions contradicting it.

Article 15

This Law shall enter into force one hundred and eighty days after the date of its publication in the Official Gazette.

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