Saudi Arabia has opened the doors for foreign investors to own stakes in Saudi-listed companies with properties in Mecca and Medina, Islam’s holiest cities. This historic move aligns with the kingdom’s ambitious efforts to attract global capital and diversify its oil-reliant economy.
Saudi Arabia announced on Monday that foreign investors will now be permitted to invest in Saudi-listed companies that own property in Mecca and Medina, Islam’s holiest cities. The move marks a significant step in the kingdom’s efforts to attract foreign capital and diversify its economy.
The Saudi Capital Market Authority (CMA) outlined the objectives of the new policy in a statement. The decision “aims to stimulate investment, enhance the attractiveness and efficiency of the capital market, and strengthen its regional and international competitiveness while supporting the local economy,” the statement read.
The CMA clarified that foreign investment in real estate within the boundaries of Mecca and Medina will be restricted to shares of Saudi-listed companies, convertible debt instruments, or a combination of both. However, it emphasized that non-Saudi ownership cannot exceed 49 percent.
As the largest economy in the Middle East and the world’s leading crude oil exporter, Saudi Arabia has been pursuing an ambitious reform agenda to reduce its dependence on oil revenues. Central to this vision is a focus on tourism and investment, with Mecca and Medina playing pivotal roles in these plans.
Mecca, which already hosts millions of Muslim pilgrims annually, is undergoing significant development aimed at increasing the number of visitors to 30 million by 2030. A flagship project, Masar, financed by the kingdom’s Public Investment Fund (PIF), envisions 40,000 new hotel rooms in Mecca to accommodate the growing number of pilgrims.
In 2019, revenue from the Hajj and Umrah pilgrimages was estimated at $12 billion, underscoring the economic importance of these religious journeys.
