Saudi Arabia’s Capital Market Authority announced on 6 January that it will open the country’s capital market to all categories of foreign investors, allowing direct participation beginning on 1 February 2026, in one of the kingdom’s most significant steps yet to internationalize its financial markets.
The authority’s board approved a new regulatory framework that will permit nonresident foreign investors to invest directly in the main market. The move effectively makes the Saudi stock exchange accessible to investors worldwide without intermediary structures, expanding a market that has gradually opened over the past decade.
Regulators said the changes are intended to broaden and diversify the investor base, boost capital inflows, and deepen market liquidity. As part of the overhaul, the authority abolished the long-standing concept of the “qualified foreign investor,” removing eligibility and minimum threshold requirements that had limited access for many overseas investors.
The reforms also eliminate the regulatory framework for swap agreements, which had allowed nonresident foreign investors to gain only economic exposure to listed securities without direct ownership. Under the new rules, foreign investors will be able to invest directly in shares listed on the main market.
Foreign ownership in Saudi Arabia’s capital market exceeded SAR 590 billion (USD 157 billion) by the end of the third quarter of 2025, according to official data. International investments in the main market alone reached roughly 519 billion riyals during the same period, up from 498 billion riyals at the end of 2024. Officials said they expect the latest changes to attract additional foreign capital.
The decision builds on earlier steps taken in July 2025, when the authority simplified procedures for opening and operating investment accounts for certain categories of foreign investors, including individuals residing in Gulf Cooperation Council countries or those who had previously lived in Saudi Arabia or the Gulf. Regulators described those measures as a transitional phase toward the broader opening announced this week.
The reforms are part of a gradual strategy to liberalize the market through successive stages, with further measures planned to position Saudi Arabia as a more global investment destination and draw in foreign capital.
The Saudi market had undergone significant development in recent years, and foreign investors had been drawn by the strength and sustained growth of the Saudi economy. Net foreign purchases in the main market have exceeded SAR 20 billion (USD 5.3 billion), with foreign ownership rising to about SAR 590 billion (USD 157.3 billion), including roughly SAR 416 billion (USD 111 billion) in companies listed on the Tadawul All Share Index.
Experts expect strong foreign inflows by midyear as investment instruments favored by international investors become more widely available, possibly bringing in around USD 10 billion (SAR 37.5 billion) and positioning Saudi Arabia alongside other leading emerging markets.
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