Saudi Arabia has unveiled a major policy shift permitting foreign investment in companies listed on its stock exchange that own real estate in the holy cities of Mecca and Medina.
This decision, which takes effect immediately, is part of the kingdom’s broader Vision 2030 strategy to reduce its reliance on oil revenues by fostering growth in sectors like tourism and technology.
The Capital Market Authority clarified that foreign investors can now acquire shares and convertible debt instruments of listed firms, though non-Saudi ownership will be capped at 49%.
According to the CMA, the move is designed to “stimulate investment, enhance the attractiveness and efficiency of the capital market, and strengthen its regional and international competitiveness.”
While the new policy marks a significant step in opening up Saudi Arabia’s economy, it does not alter the longstanding ban on non-Muslims entering Mecca or religious sites in Medina.
Mecca and Medina play a vital role in the kingdom’s economic vision, largely through revenue from religious tourism.
In 2019, Hajj and Umrah pilgrimages contributed approximately $12 billion to the economy. By 2030, Saudi Arabia aims to welcome 30 million pilgrims annually, supported by large-scale projects such as the Masar initiative in Mecca, which will add 40,000 hotel rooms to cater to this growing demand.
The Saudi stock market, valued at $2.72 trillion and the largest in the Gulf region, has been gradually opening to foreign investment since 2015.
This latest measure builds on previous reforms, including the 2021 decision allowing non-Saudis to invest in real estate funds focused on Mecca and Medina.
Following the announcement, shares of companies such as Jabal Omar Development Company and Makkah Construction and Development Company surged by 10%, underscoring investor confidence in the policy change.
