Foreign investment restrictions eased in Saudi Arabia

On 5 January 2026, the CMA announced amendments to the Rules for Foreign Investment in Securities (5-page / 262KB PDF), which removed the requirement for foreign investors to qualify as ‘qualified foreign investors’ (QFIs) prior to being able to invest in listed securities and investment products on the KSA stock market. As of 1 February, this has all changed and KSA has now opened its market to a wider set of investors.

Notwithstanding these sweeping changes, certain restrictions remain in place. A non‑resident foreign investor, other than a foreign strategic investor, may not own 10% or more of a listed issuer’s shares or convertible debt instruments. In addition, aggregate foreign ownership, excluding foreign strategic investors, in any listed issuer may not exceed 49%. Foreign strategic investors also remain subject to a two‑year lock‑up period.

The reforms represent a major shift in how international investors can participate in KSA’s equity markets. Under the new regime, foreign investors will no longer need to fulfil special criteria to become authorised to trade publicly listed securities. This structural change is expected to considerably broaden access to what is already one of the Middle East’s fastest-growing capital markets.

International investment in the KSA capital market has been growing, even under the restrictions that have applied until now. According to the CMA, as of the end of the third quarter of 2025, international investors held over SAR 590 billion (US$157bn) in the KSA capital market, which was up from SAR 498 billion (US$132bn) at the end of 2024. This upward trend demonstrates growing confidence in KSA’s market reforms and its broader economic transformation, according to Marie Chowdhry of Pinsent Masons, who said the changes also align with KSA’s Vision 2030 initiative, which aims to diversify the country’s economy, deepen capital markets, and attract higher levels of foreign investment.

The removal of investment barriers is likely to offer significantly expanded opportunities for investors and companies seeking capital from international sources and licensing opportunities for financial services firms, they added.

Chowdhry said: “KSA’s decision to open its capital markets to all foreign investors is a structural shift that materially expands opportunities for global capital. Access barriers that once limited participation in one of the region’s most dynamic markets are being dismantled. This will deepen liquidity and diversify the investor base, as well as reshape how international investors, asset managers and corporates engage with KSA.”