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The Ministry of Investment has published an explanatory memorandum for the draft amendment to the Non-Saudis owning real estate<\/span><\/a> The memorandum contains 13 economic, developmental, and social objectives, including nine economic and developmental objectives: promoting economic development, increasing the contribution of the real estate sector to the Kingdom's GDP, creating a more competitive business environment, 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.<\/p>\n\n\n\n Four social goals in the amendment<\/strong><\/p>\n\n\n\n The memorandum included four social goals that the amendment seeks to achieve: increasing social capital, increasing employment rates for construction and real estate workers, developing less-developed areas and increasing demand for real estate, and increasing the incomes of workers in the sector.<\/p>\n\n\n\n The memorandum on amending 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 regarding a number of real estate issues.<\/p>\n\n\n\n Usufruct of real estate <\/strong><\/strong><\/p>\n\n\n\n The reasons for amending the Non-Saudi Ownership Law included supporting the system of regulations related to real estate, 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 Makkah and Madinah.<\/p>\n\n\n\n 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 contributes to facilitating the means of living and working in the Kingdom, and provide opportunities for non-Saudis to own real estate in certain areas.<\/p>\n\n\n\n Creating investment opportunities<\/strong><\/strong><\/p>\n\n\n\n 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 real estate within the Kingdom, as well as 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. Allowing foreigners to own property<\/strong><\/strong><\/p>\n\n\n\n The draft amendment also aims to allow non-Saudi natural persons to own or utilize 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 the rest of the economic sectors as one of the means followed by the Kingdom to achieve an increase in the contribution of the real estate sector to GDP.<\/p>\n\n\n\n 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 working to develop, such as Qiddiya, Amaala Tourism Project and Neom Project. Foreign Representatives' Right to Own Property<\/strong><\/p>\n\n\n\n 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 the residence of their heads and members, and international and regional bodies may, within the limits of the agreements governing them, own their official headquarters, all subject to obtaining a license from the Minister of Foreign Affairs.<\/p>\n\n\n\n The articles also stipulate 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 borders of the two Holy Mosques, for persons 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.<\/p>\n\n\n\n May 18 poll ends<\/strong><\/strong><\/p>\n\n\n\n The Ministry of Investment released a draft amendment to the Real Estate Ownership and Investment Law for public and interested parties until May 18, 2022. The lessons learned from foreign ownership of real estate in the GCC concluded that there are three key success factors that fully realize the benefits of non-Saudis owning and using real estate: a service-based economy that maximizes the benefits of foreign ownership rules, attractive and lifestyle-friendly offerings with advanced infrastructure, a streamlined visa system, and a strong risk mitigation mechanism to eliminate undesirable macroeconomic, social, and sovereignty impacts. The Ministry explained that 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 of natural and legal status in cities and economic zones in the Kingdom targeted for development, including the cities of Makkah and Madinah.<\/p>\n\n\n\n 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.<\/p>\n\n\n\n The draft amendment project deleted the fourth article, and merged the first and second articles, which stipulated that \u201ca non-Saudi of 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 regulation for this system,\u201d and the second \u201cA regulation regulating the right of usufruct in the cities of Mecca and Medina shall be issued by order of the Prime Minister.\u201d.<\/p>\n\n\n\n This law replaces the Law on Ownership of Real Estate by Non-Saudis in Saudi Arabia, is published in the Official Gazette, and comes into effect 90 days after the date of its publication, and the regulations are issued by order of the Prime Minister.<\/p>","protected":false},"excerpt":{"rendered":" Reading time: <\/span> 4<\/span> Minutes<\/span><\/span>\u0646\u0634\u0631\u062a \u0648\u0632\u0627\u0631\u0629 \u0627\u0644\u0627\u0633\u062a\u062b\u0645\u0627\u0631 \u0645\u0630\u0643\u0631\u0629 \u062a\u0648\u0636\u064a\u062d\u064a\u0629 \u0644\u0645\u0634\u0631\u0648\u0639 \u062a\u0639\u062f\u064a\u0644 \u0646\u0638\u0627\u0645 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In addition to finding a 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, and improving the quality of the offered real estate to match the global supply in order to serve the real estate market.<\/p>\n\n\n\n
It also contributes to increasing government revenues from real estate taxes and 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 real estate ownership and investment system for foreigners, ending the multiplicity of regulations and their conflicting provisions, and finally increasing competitiveness and stimulating the real estate market and providing job opportunities.<\/p>\n\n\n\n
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, France, China, Turkey, the United Arab Emirates, Hong Kong, Singapore, Belgium, and the Netherlands: The United States, Germany, the United Kingdom, France, China, Turkey, the United Arab Emirates, Hong Kong, Singapore, Belgium, and the Netherlands.<\/p>\n\n\n\n
Risks to be mitigated include speculation as foreign investors are more interested in short-term profits, which could lead to a proliferation of speculative activities in real estate prices.<\/p>\n\n\n\n
According to the law, the application of the provisions of this system shall not prejudice the following: the property rights of non-Saudis under previous regulations, and the provisions of this system 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 or any other original right in kind over 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.<\/p>\n\n\n\n