Saudi Arabia Opens Financial Markets to Foreign Investors

TLDR

• CMA to open markets to all foreign investors by February 2026.
• Foreign ownership in Saudi markets reached SAR 590 billion by Q3 2025.
• Expected inflows could unlock up to $10 billion from foreign investors.

Saudi Arabia's Capital Market Authority (CMA) announced it will open its financial markets to all foreign investors starting February 1, 2026. This move will remove the existing Qualified Foreign Investor (QFI) requirements and swap agreements. This opening is part of the country's Vision 2030 initiative.

The decision aims to diversify the investor base, enhance liquidity, and attract more international capital. This follows significant reforms, including simplified account procedures initiated in July 2025. A public consultation occurred in October 2025 to gather feedback on the proposed changes. The Minister of Investment, Khalid Al-Falih, highlighted these transformations at the Saudi–Japanese Ministerial Investment Forum.

Saudi Market Reforms Over Time

Since the launch of Vision 2030, the CMA has overseen a gradual liberalization of the market. Foreign ownership in Saudi markets has reached SAR 590 billion by Q3 2025, reflecting ongoing efforts to open the economy. The removal of the QFI requirement marks a significant shift in market policy.

Past initiatives that align with this reform include the July 2025 simplification of account procedures for Gulf Cooperation Council (GCC) residents. Additionally, the legal framework for real estate ownership by foreigners, effective from January 2026, supports these broader economic reforms. As a result, foreign direct investment (FDI) surged to SAR 119.2 billion in 2024.

Expected Financial Impact and Market Response

The anticipated changes could unlock up to $10 billion in potential inflows from foreign investors. However, the current foreign ownership level is around 7%, comparatively lower than in other emerging markets. This reform is expected to enhance the appeal of Saudi equities, debt instruments, and exchange-traded funds (ETFs) on the Main Market.

After the announcement, Saudi equities rose approximately 3% on January 7, 2026. This was primarily led by the financial sector, which anticipates improved liquidity. Market analysts are examining the potential for index inclusion as eased ownership caps could further attract investment. According to industry watchers, easing the current 49% ownership cap could increase international interest.

Connecting Past Initiatives to Future Goals

These market reforms are a continuation of previous initiatives. The CMA's decision to simplify account procedures for GCC residents and the approval of foreign real estate ownership laws were earlier steps. Both measures are seen as instrumental in driving foreign investment growth, reflected in the significant rise in FDI by the end of 2024.

Further insights from market analysts suggest that ongoing adjustments to regulatory frameworks could facilitate a more internationally competitive market environment. The elimination of formal barriers like QFIs aligns with a wider strategy to enhance economic openness and integration.