Summary
Since 1 February 2026 any foreigner, resident or not, can buy Saudi listed shares directly. The 10% and 49% caps, account opening, tax and protections.
Since 1 February 2026, foreigners can invest in the Saudi stock market directly, whatever their residency or size. The Capital Market Authority (CMA) scrapped the Qualified Foreign Investor (QFI) regime and the swap framework, so foreign buyers now hold legal title to Saudi listed shares. Some limits remain. Each non-resident investor and each listed company is subject to an ownership cap, and every account is still opened through a CMA-licensed capital market institution. This guide sets out the rules in force as of October 2026 under the Rules for Foreign Investment in Securities and the Investment Accounts Instructions, both amended in January 2026.
Key takeaways
- From 1 February 2026, foreign individuals and entities, resident or non-resident, may invest directly in all listed securities, debt instruments and investment fund units without any prior qualification.
- A non-resident foreign investor (other than a foreign strategic investor) may not own 10% or more of the shares of any listed issuer.
- All foreign investors combined (residents and non-residents, excluding strategic investors) may not own more than 49% of any listed issuer. Any lower limit in the company's bylaws or sector rules also applies.
- A foreign strategic investor may not sell any of its shares for two years after acquiring them.
- According to the CMA's FAQs, non-residents pay a 5% withholding tax on gross dividends and are not taxed on capital gains.
Can foreigners buy Saudi shares directly in 2026?
Yes. By Resolution No. 1-2-2026 dated 05/01/2026G (16/07/1447H), the CMA Board amended the Rules for Foreign Investment in Securities. The CMA announced that the Main Market would be open to all categories of foreign investors from 1 February 2026.
As amended, Article 5 of the Rules allows foreign natural and legal persons, whether resident or not, to invest in all listed securities, debt instruments and investment fund units, subject to the restrictions in the Rules.
The main changes:
- The QFI concept is abolished in the Main Market. Non-residents no longer need to meet any qualification requirement before investing.
- The swap framework is abolished. Swaps gave non-residents only the economic benefit of listed shares, without ownership. Investors now own the shares directly.
- Related instruments were amended at the same time: the Investment Accounts Instructions, the Instructions on Issuing Depositary Receipts Out of the Kingdom, the Companies Law implementing regulation for listed joint stock companies, and the Glossary of Defined Terms.
This built on a July 2025 step that simplified account opening for certain foreign individuals, including GCC residents and former residents of the Kingdom or a GCC state. For the wider picture of inbound investment, see what foreign investment means in Saudi Arabia.
Resident vs non-resident foreigners: what is the difference?
The main difference is the per-investor cap. The 10% limit per issuer applies only to non-residents. Residents are not subject to it, but both groups count toward the 49% aggregate cap. The identity document needed to open an account also differs.
- GCC citizens: the Rules for Foreign Investment do not apply to them. They open accounts with a valid passport or national ID.
- Foreigners resident in Saudi Arabia: a valid iqama (residence permit) or resident identity card, or a five-year residency card. Diplomats need an embassy letter and a diplomatic ID.
- Foreigners resident in another GCC state: a valid resident ID plus passport.
- Non-residents of Saudi Arabia and the GCC: a valid passport.
A practical point for expatriates: an institution will not close a resident's account while the iqama is expired, unless the investor provides a renewed iqama or a final exit visa. On final exit, the account must be updated with a valid passport and proof of exit. If documents lapse and are not updated, the account is frozen, with at least one month's notice.
What are the foreign ownership limits per company and per investor?
Article 6 of the Rules imposes four restrictions that apply together: 10% per non-resident investor, 49% for all foreigners combined, any limit in the company's bylaws, and any regulatory restriction or instruction from the company's competent authorities.
- Non-resident cap: below 10% of the issuer's shares or convertible debt instruments.
- Aggregate cap: 49% for all foreign investors of every category, excluding strategic investors.
- Bylaws: some companies set a lower foreign ownership limit in their bylaws.
- Sector and regulatory limits: instructions from the authority that supervises the company's business.
A foreign strategic investor is a foreign legal entity that takes a direct stake in a listed company for at least two years, aiming to improve the company's financial or operational performance. Its stake does not count toward the 10% and 49% caps, and there is no minimum or maximum target percentage. It may not sell within two years of acquiring the shares, and the capital market institution must block any transaction that would breach this.
The caps do not apply to shares of a foreign issuer listed on the Main Market. The Saudi Exchange (Tadawul) publishes, for each listed company, figures on foreign ownership, strategic investor stakes and any company-specific restrictions. Check them before you trade.
Foreign investors must also notify the Exchange, like any other shareholder, when they own or are interested in 5% or more of any class of voting shares. The deadline is the end of the third trading day after the transaction. Exceeding a cap is a breach of the Rules. The CMA may then act under the Capital Market Law, including seeking an order to correct the breach. For the wider regulatory framework, see our legal guide to the Saudi stock market (TASI).
How do foreigners open a Saudi investment account?
Accounts are opened with a capital market institution licensed by the CMA, which verifies the client's identity under the Investment Accounts Instructions and anti-money laundering rules. In practice:
- Choose a CMA-licensed institution. A licensed broker executes trades. You may appoint a separate licensed custodian.
- Prepare documents. Non-residents need a passport and residents an iqama or resident ID. Foreign legal entities need their constitutional documents and a signatory authorisation, as the institution requires.
- KYC and due diligence. The institution verifies identity and beneficial ownership. It may rely on a third party for verification, within the AML framework.
- Sign the account agreement. It records your ID, address and occupation. You confirm the data is accurate and undertake to keep it updated and to comply with the Capital Market Law.
- Fund and trade. Trading runs in one session from 10:00 am to 3:00 pm, Sunday to Thursday (KSA time), with T+2 settlement.
The Instructions set no statutory account-opening fee. Commissions and charges are set by each institution in its agreement. A non-resident may use several portfolio managers at once, whether CMA-licensed, foreign or GCC-based. If you are planning more than a share portfolio, read our foreign investor guide to Saudi Arabia.
Can foreigners invest through funds, ETFs and the Nomu parallel market?
Yes. The Rules expressly cover investment fund units. Foreigners can buy listed exchange-traded funds (ETFs), invest in funds run by licensed managers, or set up a discretionary portfolio management (DPM) mandate with a capital market institution.
- Nomu (parallel market): open to foreign investors who fall within a category of Qualified Investor in the Parallel Market under the CMA Glossary. See Nomu listing requirements.
- IPOs: foreigners may subscribe under the prospectus terms, subject to the ownership caps.
- Listed derivatives: available to foreign investors.
- Financing: foreigners may borrow from local banks, under CMA and Saudi Central Bank (SAMA) procedures.
How are foreign investors taxed on Saudi shares?
The CMA's published FAQs state that, under the Income Tax Law, non-resident foreign investors pay 5% withholding tax on gross dividends from listed companies and are not taxed on capital gains. The listed company deducts the tax from the dividends it pays.
Treat this as the general rule, not tax advice. Check your position with the Zakat, Tax and Customs Authority (ZATCA) if you are an entity with a permanent establishment in the Kingdom, if you are resident in a country that has a double tax treaty with Saudi Arabia, or if the Income Tax Law is amended.
What protections do foreign shareholders have?
Foreign shareholders have the same rights as Saudi shareholders. They can vote at general assemblies, electronically through the Tadawulaty system or by proxy. They can nominate board candidates under the Companies Law. In mergers and acquisitions, minority protections apply, including equal treatment and equal access to information.
The Committee for the Resolution of Securities Disputes (CRSD) hears disputes under the Capital Market Law and its regulations, including trading disputes. Its decisions can be challenged before the Appeal Committee, whose decisions are final. Anyone subject to the Rules may also bring a challenge before the Committee against a CMA decision or action taken under them. For the procedure, see securities disputes before the CRSD. For help with structuring or ownership limits, contact our capital markets team.
Frequently asked questions
Do I still need QFI status to invest in Saudi shares?
No. The CMA abolished the Qualified Foreign Investor concept in the Main Market from 1 February 2026. A non-resident can open an account with a CMA-licensed capital market institution and own listed shares directly, with no prior qualification. The ownership caps, identity verification and anti-money laundering checks still apply in full.
Can an expatriate working in Saudi Arabia buy Saudi stocks?
Yes. You open the account with a valid iqama or resident ID. Residents are not subject to the 10% per-investor cap that applies to non-residents, but they count toward the 49% aggregate foreign cap in each company. Keep your details updated when your iqama is renewed, or the institution will freeze the account after at least one month's notice.
What happens if I exceed a foreign ownership limit?
You are in breach of the Rules. The Securities Depository Center Rules apply to the excess holding, and the CMA may act under the Capital Market Law. This includes asking the Committee to order you to take corrective steps. Before a large trade, check the foreign ownership headroom that the Saudi Exchange publishes for the company.
Are capital gains on Saudi shares taxed for non-residents?
According to the CMA's FAQs, non-residents are not taxed on capital gains, while cash dividends are subject to 5% withholding deducted by the listed company. The position can differ for investors with a permanent establishment in the Kingdom or those covered by a tax treaty. Confirm your position with ZATCA or a tax adviser.
Does a non-resident need a CMA licence to trade for its own account?
No. According to the CMA's FAQs, a non-resident dealing as principal in listed securities needs no CMA licence. Neither does a foreign adviser advising it, nor a foreign custodian holding its securities. However, a local CMA-authorised institution must be appointed to carry out custody business.
Official sources
All information above reflects the texts in force as of October 2026: