Saudi Arabia fully opens capital markets to all foreign investors

RIYADH — Saudi Arabia fully opened its capital markets to all categories of foreign investors for the first time on Sunday, February 1. This allows all types of foreign institutions and funds to trade directly on the main stock market, Tadawul All Share Index (TASI).
As of Sunday, all categories of foreign investors, including institutions, funds and other eligible entities, will be able to access Saudi stocks without prior qualification requirements, bringing the market closer to international access standards. This is in line with a previously announced decision by the Capital Markets Authority (CMA) Board to approve a new regulatory framework to allow non-resident foreign investors to invest directly in key markets, making capital markets accessible to a wider range of global investors.

The CMA Board’s decision allows foreign investors to enter the market without eligibility requirements, abolishes the regulatory framework governing swap agreements, and allows direct investment in shares listed on major markets. However, market opening does not remove restrictions on foreign ownership of listed companies, and some companies are still subject to foreign ownership caps under regulations.

Under the new framework, foreign investors are categorized as resident foreigners, GCC resident foreigners, non-resident foreigners, foreign corporations, foreign strategic investors, and foreign funds. Non-resident foreign investors, other than strategic foreign investors, are prohibited from owning more than 10 percent of the shares of a listed company. Additionally, total foreign ownership is limited to 49% of the shares of a listed issuer, excluding strategic investors, whether resident or non-resident.

The CMB Board recently approved amendments aimed at expanding and diversifying the investor base in key markets, supporting investment inflows and enhancing market liquidity. Under the new framework, the CMA has abolished the concept of Qualified Foreign Investor (QFI) in key markets, allowing all categories of foreign investors to access the market without having to meet eligibility requirements.

The proposed amendments also abolish the regulatory framework governing swap agreements, which previously allowed non-resident foreign investors only economic exposure to listed securities, and now allows direct share ownership in major markets. The CMA said the amendments are expected to attract further international investment.

It is noteworthy that foreign investors’ ownership in the Saudi capital market exceeded 590 billion riyals by the end of the third quarter of 2025. Foreign investments in major markets amounted to approximately 519 billion riyals during the same period, up from 498 billion riyals at the end of 2024.