Real Estate Lawyers Saudi Arabia 2026: Foreign Ownership Rules & Designated Zones (royal Decree M/14)

Saudi Arabia’s property market entered a new era in January 2026 when the Law of Real Estate Ownership by Non‑Saudis, enacted under Royal Decree No. (M/14), came into force and opened designated zones across the Kingdom to foreign buyers for the first time. The reform permits non‑Saudi individuals and legal entities, whether resident or non‑resident, to acquire freehold ownership and other transferable real rights in specific areas, with applications processed through the Real Estate General Authority’s (REGA) digital “Saudi Properties” platform.

For foreign investors, in‑house counsel and real estate lawyers in Saudi Arabia, the practical challenge is no longer whether foreign ownership is possible but how to navigate the compliance framework, zone restrictions, REGA registration procedures and transactional risks that accompany this landmark shift. This guide maps the full legal regime, provides step‑by‑step procedural checklists and highlights the dispute‑prevention strategies that experienced practitioners recommend.

Executive Summary and Quick Take

Royal Decree No. (M/14), published in the Official Gazette on 14 August 2025, approved the Law of Real Estate Ownership and Investment by Non‑Saudis. The law entered into force on 21 January 2026, at which point REGA activated the Saudi Properties portal and began accepting ownership applications from foreign nationals and entities.

In essence, non‑Saudis can now own real estate outright or hold other transferable rights in real estate within designated zones. The regime covers residents inside the Kingdom as well as non‑residents, and extends to non‑Saudi companies and non‑profit entities, subject to specific legal controls and documentation requirements. Makkah and Madinah remain subject to special restrictions, and all properties must be registered on the national title platform before a transfer can proceed.

The practical implications for buyers and their advisers are significant:

• Zone eligibility must be confirmed before any transaction. Only registered properties in REGA‑designated zones qualify; buying outside those zones remains prohibited for non‑Saudis.
• REGA portal registration is mandatory. No ownership transfer will be effected without a completed application and approval through Saudi Properties.
• Due diligence scope has expanded. Counsel must now verify zone designation, title registration status, and compliance with the new law’s residency and entity requirements in addition to standard encumbrance and zoning checks.
• Contract clauses need updating. Sale and purchase agreements should include REGA compliance representations, zone‑eligibility warranties and regulatory‑approval conditions precedent.
• Dispute risks are new and untested. Early indications suggest that application rejections, zone‑boundary disputes and title‑registration delays will be the most common friction points in the law’s first operational year.
• Tax and financing considerations require specialist advice. VAT treatment, fee structures and mortgage availability for non‑Saudis vary by transaction type and buyer category.

Legal Framework, Royal Decree M/14 and Key Definitions

The non‑Saudi property ownership law represents the Kingdom’s most comprehensive legislative overhaul of foreign real estate rights, replacing a patchwork of older regulations with a single, codified framework. Understanding its statutory architecture is essential for any real estate lawyer advising on cross‑border Saudi transactions.

Royal Decree No. (M/14), dated 19/01/1447 H (corresponding to 14 August 2025 in the Gregorian calendar), was published in the Official Gazette and approved the Law of Real Estate Ownership and Investment by Non‑Saudis. The law’s implementing regulations and REGA’s procedural guidance followed, with the full regime becoming operational on 21 January 2026 when REGA began accepting applications through the Saudi Properties digital portal.

Scope and Key Legal Definitions

The law applies to every non‑Saudi natural person (any individual who does not hold Saudi nationality) and every non‑Saudi legal entity (any company, partnership or non‑profit organisation that is not wholly Saudi‑owned or does not qualify as a Saudi entity under applicable regulations). It distinguishes between two buyer categories:

• Residents: Non‑Saudi natural persons legally residing in the Kingdom, who may acquire real estate for private residence after obtaining REGA approval.
• Non‑residents and entities: Non‑Saudi individuals outside the Kingdom and non‑Saudi companies or entities, who may acquire real estate in designated zones for investment, commercial or residential purposes, subject to zone‑specific conditions.

The law defines real estate broadly to include land, buildings and units within buildings. Designated zones are geographic areas identified by REGA where non‑Saudi acquisition is permitted; each zone carries its own set of permissible uses and buyer‑category rules.

Rights Granted Versus Restricted Rights

Non‑Saudis may acquire freehold ownership as well as other transferable real rights, including usufruct and long‑term lease rights, depending on the designated zone and the nature of the property. Industry observers expect that mortgages and encumbrances over non‑Saudi‑owned properties will be permitted in line with the Kingdom’s broader real estate finance regulations, although the practical availability of mortgage products from Saudi lenders to non‑resident buyers remains limited in the law’s early months.

The law explicitly excludes acquisition by non‑Saudis in Makkah and Madinah, except under narrowly defined circumstances that the regulations may prescribe. Properties outside designated zones remain off‑limits regardless of the buyer’s residency status or entity type.

Designated Zones: Where Non‑Saudis Can Buy and Zone‑Specific Rules

One of the most critical tasks for real estate lawyers in Saudi Arabia advising foreign buyers is confirming whether a target property falls within a REGA‑designated zone. The law permits non‑Saudi ownership only in zones that REGA has formally gazetted, and each zone may carry distinct restrictions on property type, permitted use and buyer eligibility.

According to REGA guidance and market analysis published by leading advisory firms, designated zones for foreign buyers include areas within the following cities and developments:

Critical practice note: Zone designations may be updated by REGA without legislative amendment. Practitioners should check the current REGA zone register at the time of each transaction rather than relying on historical lists. Makkah and Madinah are expressly excluded from foreign ownership under the law.

REGA (Saudi Properties) Registration and Application Process, Step by Step

The REGA Saudi Properties platform is the sole channel through which non‑Saudis may apply for property ownership approval. No transfer of real estate to a non‑Saudi buyer can be registered without a completed and approved application on this portal. The following step‑by‑step process reflects the procedural framework established by REGA’s guidance documentation.

1. Pre‑application zone verification. Confirm that the target property is within a REGA‑designated zone and that it is registered in the national title register. Unregistered properties cannot be transferred to non‑Saudis.
2. Buyer‑eligibility assessment. Determine whether the buyer qualifies as a resident natural person, a non‑resident natural person, or a non‑Saudi entity, as each category has distinct documentation and approval requirements.
3. Platform registration. Create an account on the Saudi Properties portal. Individual buyers will need valid identification (passport, residency permit if applicable); entities will need commercial registration documents and authorised signatory credentials.
4. Document upload and KYC submission. Upload all required documents (see checklist below), complete the Know Your Customer (KYC) declarations and submit identification verification materials.
5. Application submission. Complete the online application form, specifying the target property (by title deed reference), the intended use and the buyer category. Pay the applicable processing fee.
6. REGA review and approval. REGA reviews the application against zone rules, buyer eligibility, KYC/AML requirements and any sector‑specific conditions. The authority may request supplementary documentation during review.
7. Approval notification. Upon approval, REGA issues an ownership authorisation linked to the specific property and buyer. The buyer may then proceed to execute and register the transfer.
8. Title transfer and registration. The sale and purchase agreement is executed, the transfer is registered on the national title platform, and the buyer receives an updated title deed reflecting non‑Saudi ownership.

Documents Checklist

Common pitfalls: Applications are frequently delayed by missing Arabic translations of passports and corporate documents, incomplete powers of attorney for entity buyers, and failure to verify that the target property is registered in the national title system before submitting the REGA application.

Typical Timelines and Fees

REGA has not published a guaranteed processing timeline, but early indications suggest that straightforward residential applications from individual residents are being processed within weeks of submission, while entity applications and more complex transactions may take longer. Processing fees are payable at the point of application submission. Practitioners should budget for additional notarisation, translation and legalisation costs that fall outside the REGA fee structure. Fee schedules are published on the Saudi Properties portal and may be updated by REGA periodically.

Compliance Checklist for Foreign Investors and Recommended Contract Clauses

Compliance for foreign investors extends well beyond the REGA application itself. The following checklist covers the regulatory, financial and contractual obligations that real estate lawyers in Saudi Arabia should address in every non‑Saudi acquisition:

• Regulatory approval. Confirm REGA approval is obtained before executing any binding transfer. No sale can be completed without it.
• Zone compliance. Verify the property falls within a current REGA‑designated zone at the date of application and again at the date of transfer registration.
• Residency and KYC verification. For resident individuals, confirm valid Iqama status. For all buyers, complete AML/KYC checks in line with Saudi anti‑money‑laundering regulations.
• Holy‑site restrictions. If the property is in or near Makkah or Madinah, confirm it is not within an excluded area under the law.
• Financing pre‑approval. If mortgage financing is required, confirm lender willingness to extend credit to a non‑Saudi borrower and ensure the mortgage can be registered against the title.
• Tax registration. Assess VAT obligations on the transaction and confirm whether the buyer needs to register for tax purposes with the Zakat, Tax and Customs Authority (ZATCA).
• Ongoing reporting. Monitor any post‑acquisition reporting requirements imposed by REGA or other regulatory bodies, including changes of use or subsequent transfers.

To mitigate the risks specific to this new regime, experienced practitioners recommend including the following clause types in sale and purchase agreements:

• REGA compliance representation. The seller warrants that the property is in a designated zone and is registered on the national title platform.
• REGA approval condition precedent. Completion is conditional upon the buyer receiving REGA ownership authorisation; if approval is not granted within a specified period, either party may terminate without penalty.
• Zone‑eligibility warranty. The seller warrants that, to the best of its knowledge, no pending REGA reclassification or de‑designation affects the property.
• Escrow mechanism. Purchase funds are held in escrow pending REGA approval and title transfer registration.
• Dispute resolution clause. Specifies Saudi courts or Saudi‑seated arbitration (as appropriate), with governing law as the laws of the Kingdom of Saudi Arabia.

Transactional Steps and Documentation for Buying Property in Saudi Arabia 2026

The end‑to‑end transaction flow for a non‑Saudi buyer, from initial offer to registered ownership, follows a sequence that integrates traditional Saudi conveyancing steps with the new REGA approval layer. Purchaser counsel should manage the process as follows:

Title and Encumbrance Search Process

Before submitting the REGA application, buyer’s counsel should conduct a title search to confirm: (a) the property is registered in the national title register, (b) no encumbrances, liens or court orders exist against the title, (c) the property falls within a current designated zone, and (d) the seller has full authority to transfer. The title search is conducted through the Ministry of Justice’s electronic title system, and any discrepancies must be resolved before the REGA application proceeds. In the case of off‑plan or under‑construction properties, additional checks against the developer’s master title and RERA registration should be performed.

Financing, Taxes and Practical Market Considerations for Non‑Saudis

Foreign property ownership in Saudi Arabia brings financial obligations that buyers must address early in the transaction planning process. VAT at the standard rate may apply to certain real estate transactions, and the Real Estate Transaction Tax (RETT) applies to disposals of real property. Buyers should engage a Saudi tax adviser to confirm the precise treatment of their specific acquisition.

Mortgage financing for non‑Saudis remains a developing area. While the legal framework does not prohibit non‑Saudi borrowers from obtaining mortgage finance, the practical availability of such products, particularly for non‑residents, is limited. Industry observers expect Saudi banks to expand their non‑Saudi mortgage offerings as the market matures, but buyers should confirm lender appetite and terms before committing to a purchase that depends on local financing. Cross‑border remittance of purchase funds is subject to Saudi Arabian Monetary Authority (SAMA) regulations on foreign exchange, and buyers should confirm that their intended payment mechanism complies with these rules. A deeper analysis of taxes, financing and title fitness for non‑Saudi property owners in KSA 2026 is available as a companion resource.

Dispute Prevention and Enforcement: Risks, Remedies and ADR Options

The early operation of any new regulatory regime creates inherent dispute risk. The likely practical effect of the non‑Saudi property ownership law will be a new category of disputes centred on the following scenarios:

• REGA application rejection. A buyer’s application may be rejected for incomplete documentation, failure to meet zone‑eligibility requirements or AML/KYC concerns. The available remedy is to address the deficiency and re‑apply, or to seek administrative review of the rejection decision through REGA’s internal procedures and, ultimately, judicial challenge before the competent Saudi courts.
• Zone boundary and eligibility disputes. Disagreements may arise over whether a property falls within or outside a designated zone, particularly where zone boundaries are not precisely mapped. Counsel should obtain formal confirmation from REGA prior to completion rather than relying on informal representations.
• Title and encumbrance misrepresentation. A seller may warrant that a property is unencumbered or zone‑compliant when it is not. The buyer’s remedy lies in contractual warranty claims, and potentially in tort under Saudi law, reinforcing the importance of robust SPA drafting.
• Post‑acquisition regulatory changes. REGA may reclassify or de‑designate a zone after a purchase is completed. Early indications suggest that existing ownership rights would be protected, but this has not yet been tested before the courts.

For dispute resolution, Saudi courts have jurisdiction over real estate matters within the Kingdom. However, parties may agree to Saudi‑seated arbitration under the Saudi Arbitration Law for contractual disputes arising from the SPA or related agreements. A recommended dispute escalation ladder for non‑Saudi property transactions includes: (1) direct negotiation, (2) mediation, (3) Saudi‑seated arbitration or litigation, with the choice clearly documented in the dispute resolution clause of the SPA. Enforcement of foreign arbitral awards in Saudi Arabia is possible under the New York Convention, to which the Kingdom is a party, although practical enforcement timelines vary.

Key Dates and Legislative Timeline

The following timeline captures the critical milestones that real estate lawyers in Saudi Arabia and their clients should reference when assessing the operative legal landscape:

Conclusion, Practical Next Steps

Royal Decree M/14 has fundamentally changed the rules governing foreign property ownership in Saudi Arabia, but the reform’s complexity demands careful legal navigation. Zone eligibility, REGA registration, compliance documentation, contract structuring and dispute‑prevention strategies all require specialist guidance. Whether you are a foreign investor evaluating your first acquisition, a developer structuring a project for international buyers, or in‑house counsel updating your compliance framework, engaging experienced real estate lawyers in Saudi Arabia is the essential first step toward a lawful and commercially sound transaction under the 2026 regime.

Sources

1. REGA, Saudi Properties Media & Q&A PDF
2. REGA, Non‑Saudi Property Ownership System Enters into Force
3. Laws of Saudi Arabia (Ministry of Justice), Law of Real Estate Ownership and Investment by Non‑Saudis
4. EY, Saudi Arabia Approves New Real Estate Ownership Law by Non‑Saudis
5. White & Case, Saudi Arabia Approves Landmark Real Estate Ownership Law for Non‑Saudis
6. Omnia Capital Group, Understanding Saudi Arabia’s Law of Real Estate Ownership by Non‑Saudis
7. WhiteSquare Partners, Saudi Arabia Opens Property Ownership to Non‑Saudis