Prime Highlight
- Saudi Arabia will allow foreign investors to directly invest in all segments of its stock market starting February 1.
- The move underscores the Kingdom’s push to attract global capital and deepen financial market liquidity.
Key Facts
- The Capital Market Authority has removed the Qualified Foreign Investor system and scrapped swap agreement rules.
- Foreign ownership in Saudi capital markets crossed SR590 billion by the third quarter of 2025.
Background
Saudi Arabia will allow foreign investors to invest directly in its stock market starting February 1, following a major regulatory change approved by the Capital Market Authority (CMA). The move opens all segments of the Kingdom’s capital market to investors from around the world.
The CMA said the changes aim to widen and diversify the investor base in the Main Market, support capital inflows, and improve market liquidity. Under the new rules, foreign investors will no longer need to meet special qualification requirements to buy shares directly.
The regulator confirmed that it has removed the concept of the Qualified Foreign Investor in the Main Market. It also scrapped the framework governing swap agreements, which previously allowed non-resident investors to gain economic exposure to shares without owning them directly. The changes now permit full direct ownership of listed shares.
Foreign investment in Saudi Arabia’s capital market has already been rising. By the end of the third quarter of 2025, foreign ownership exceeded SR590 billion, while investments in the Main Market reached around SR519 billion, up 4% from a year earlier.
The CMA said the decision builds on earlier steps taken to open the market further. In July, it simplified procedures for opening and operating investment accounts for certain foreign investors. These included residents of Gulf Cooperation Council countries and individuals who had previously lived in Saudi Arabia or other GCC states.
Officials said those measures helped strengthen confidence among investors and prepared the market for broader access.
Saudi Arabia is more than halfway through its long-term economic transformation plan, which aims to reduce reliance on oil revenues. As part of this effort, the Kingdom has stepped up efforts to attract foreign capital, including partnerships to launch exchange-traded funds with markets in Asia.
Market watchers say the latest move signals Saudi Arabia’s commitment to building a more open and globally connected financial market.
