Capital market institutions have been called upon to accept the subscriptions of non-Saudis in the real estate funds that invest in assets within the boundaries of Makkah and Madinah, by the Kingdom’s Capital Market Authority (CMA).

According to a statement from the CMA, capital market institutions must ensure compliance with the Law of Real Estate Ownership and Investment by Non-Saudis when managing the investments of these funds in real estate located within the two cities and upon liquidation of those funds. The authority indicated the decision will contribute to relying on the capital market as a diversified financing channel.

The move is said to follow the sourcing of approval from Saudi Arabia’s Council of Ministers for companies listed on the Saudi Stock Exchange (Tadawul) to buy real estate in Makkah and Madinah.

Earlier this year, the council amended Article 5 of the Law of Real Estate Ownership and Investment by non-Saudis under which listed Saudi companies are exempted from the prohibition of non-Saudis owning real estate within the borders of Makkah and Madinah.

As per this law, a non-Saudi investor with a natural or corporate personality is licensed to practice any professional, vocational, or economic activity may acquire the real estate necessary for practicing the activity in Makkah and Madinah. It also stipulated that such real estate be invested within five years from its acquirement.

The CMA said its approval will help in strengthening the pillars of the Kingdom’s Vision 2030, which aims to make the Saudi capital market attractive to local and foreign investment, and also plays a pivotal role in developing the economy and diversifying its sources of income.