The Ministry of Investment published an explanatory memorandum for the draft amendment of the The ownership and investment of real estate by non-Saudis contains 13 economic, developmental and social objectives, stating nine economic and developmental objectives, namely promoting economic development, increasing the contribution of the real estate sector to the Kingdom's GDP, creating a more competitive business environment and promoting project development, increasing demand for real estate, and improving the balance of payments. In addition to contributing to achieving a balance between supply and demand for real estate, increasing the Kingdom's share of foreign investment flow, reducing foreign remittances, and stimulating tourism.

Four social goals in the amendment

The memorandum included four social objectives that the amendment seeks to achieve: increasing social capital, increasing employment rates for construction and real estate workers, developing less developed areas and increasing the demand for real estate in them, and increasing the incomes of workers in the sector.

Four social objectives that the amendment seeks to achieve. The memorandum to amend the Non-Saudi Ownership Law attributed the reasons for amending the law to the directive of Prince Mohammed bin Salman, Crown Prince, Deputy Prime Minister, Minister of Defense and Chairman of the Council of Economic and Development Affairs, contained in the recommendation of the Council's Standing Committee on a number of real estate issues.

The memorandum attributed the reasons for amending the law.

Right of use of real estate

The reasons for amending the Non-Saudi Ownership Law included supporting the system of real estate-related regulations as usufruct is one of its main components and an influential aspect, and the expected economic impact as a result of the entry of foreign investments and enabling usufruct in the cities of Mecca and Medina.

Reasons for amending the Non-Saudi Ownership Law included. The reasons for the amendment also included achieving the objectives of the programs and initiatives emanating from the Kingdom's Vision 2030, which aims to develop the legislative and regulatory environment for the real estate sector in general and allow ownership by non-Saudis to achieve an increase in the rate of economic development, create an attractive environment that facilitates living and working in the Kingdom and provide opportunities for non-Saudis to own real estate in certain areas.

Reasons for the amendment also included achieving the objectives of the programs and initiatives emanating from the Kingdom's Vision 2030.

Creating investment opportunities

The reasons for amending the ownership of non-Saudis include creating investment opportunities and foreign deals in the real estate sector, developing the legislative environment regarding the right of non-Saudis to use and invest in the Kingdom, in addition to the positive impact on the balance of payments as a result of non-Saudis buying real estate, which in turn leads to an increase in the balance of foreign currencies.
In addition to creating balance in supply and demand for different segments, increasing the supply of housing units, supporting the Saudi construction sector in increasing the supply of developed real estate products, improving the quality of the real estate offered to match the global supply to serve the real estate market.

Reasons for amending the ownership of foreigners include the creation of investment opportunities and foreign deals in the real estate sector.

Allowing foreigners to own property

The draft amendment also aims to allow non-Saudi natural persons to own or use real estate in cities and economic zones in the Kingdom targeted for development according to rules that support increasing external demand for real estate and the growth of various economic activities in other economic sectors as one of the means followed by the Kingdom to achieve increasing the contribution of the real estate sector to the GDP.

The draft amendment also aims to allow foreigners to own or use real estate in cities and economic zones in the Kingdom that are targeted for development. <The project also aims to develop the targeted areas and increase the demand for real estate to achieve balanced development in the projects that the Kingdom is developing such as Qiddiya, Amaala Tourism Project and Neom Project.
It also contributes to increasing government revenue from taxes and real estate fees paid to the government by investors, clarifying the Kingdom's policies and procedures in promoting real estate investment, unifying and simplifying real estate ownership and investment procedures, achieving the unity of the system for foreign ownership and investment, ending the multiplicity of regulations and conflicting provisions, and finally increasing the amount of real estate ownership and real estate investment for foreigners.

The right of foreign representatives to own property

According to the draft amendment to the law, foreign representations accredited in the Kingdom may, on the basis of reciprocity, own the official headquarters and residence of their heads and members, and international and regional bodies, within the limits of the conventions governing them, may own their official headquarters, all subject to obtaining a license from the Minister of Foreign Affairs.

According to the draft amendment to the law, foreign representations accredited in the Kingdom may own the official headquarters and residence of their heads and members. The articles also included that it is not permissible by any means other than inheritance to acquire the right of ownership, utilization or easement on a property located within the boundaries of the two Holy Mosques, for persons who are prohibited from entering them, and the regulation specifies the necessary provisions for this, and prohibits notaries or any other competent authority from documenting any transaction that does not comply with the provisions of this law.“

May 18 polling ends

<The Ministry of Investment presented the draft amendment to the system of ownership and investment of real estate by non-Saudis for public and interested opinions until May 18, 2022.
In the amendment, the Ministry of Investment was guided by international practices and legislation regulating foreign ownership of real estate and usufruct in more than ten countries, including the United States, Germany, the United Kingdom ”London“, France, China, Turkey, UAE, Hong Kong, Singapore, Belgium and the Netherlands: The United States, Germany, the United Kingdom ”London“, France, China, Turkey, UAE, Hong Kong, Singapore, Belgium, and the Netherlands ”Amsterdam“.

<The lessons learned from foreign ownership of real estate in the GCC concluded that there are three key success factors that achieve the full benefits of real estate ownership and usufruct for non-Saudis: a service-based economy that maximizes the benefit of foreign ownership rules, attractive and lifestyle-friendly offers with advanced infrastructure, an easy visa system, and a strong risk mitigation mechanism to eliminate undesirable effects on the macro economy, society and state sovereignty.
The risks to be mitigated were summarized as speculation. According to the ministry, the project aims to raise and improve the efficiency and effectiveness of procedures and controls related to the ownership and utilization of real estate by non-Saudis with natural and legal capacity in cities and economic zones in the Kingdom targeted for development, including the cities of Makkah and Madinah.

She stated that she hopes that the proposed amendment to the system will contribute to enhancing the competitiveness and marketing capacity of the real estate sector in the Kingdom and stimulate growth in other economic sectors, in addition to enabling non-Saudis to own property attracts funds with controls and provisions that regulate and facilitate ownership in certain areas targeted for development.”

Also, the proposed amendment to the system will contribute to enhancing the competitiveness and marketing capacity of the real estate sector in the Kingdom and stimulate growth in other economic sectors. The draft amendment to amend the ownership and investment of real estate by non-Saudis deleted the fourth article, and merged the first and second articles, which stipulated that "non-Saudis who are natural or legal persons licensed by the competent authority to acquire the right of ownership, easement or usufruct over real estate, including its investment, in accordance with the controls, conditions and rules specified by the regulations for this system", and the second "A regulation regulating usufruct in the cities of Mecca and Medina shall be issued by order of the Prime Minister.".

More than half of the articles were deleted. According to the law, the application of the provisions of this law shall not prejudice the following: the property rights of non-Saudis under previous regulations, and the provisions of this law shall be implemented after its entry into force when transferring ownership of the property, the advantages contained in the rules governing the ownership of real estate for citizens of the Cooperation Council for the Arab States of the Gulf, the acquisition of ownership right or any other original right in kind on a property through inheritance, regulations, Cabinet decisions and high orders that prevent ownership in some locations, and the rights and advantages contained in relevant special laws and regulations.

Regulations, decisions of the Council of Ministers and high orders that prevent ownership in some locations, and the rights and advantages contained in the relevant special laws and regulations. This Law replaces the Law on Ownership of Real Estate by Non-Saudis in Saudi Arabia, shall be published in the Official Gazette, and shall enter into force 90 days after the date of its publication, and the regulations shall be issued by order of the Prime Minister.

Regulations shall be issued by order of the Prime Minister.