Article 3 of the Real Estate Ownership by Non-Saudis Law
المادة 3 من نظام تملك غير السعوديين للعقار
The article allows an unlisted Saudi company with non-Saudi shareholders to own real estate within the geographic scope, and to own what it needs for its activities and its workers' housing inside or outside it.
Official text (Arabic)
This article has not been amended since the law was issued.
1- يجوز للشركة غير المدرجة في السوق المالية السعودية المؤسسة وفقاً لأحكام نظام الشركات السعودي والتي يشترك في ملكية رأس مالها شخص أو أكثر من ذوي الصفة الطبيعية أو الاعتبارية الذين لا يتمتعون بالجنسية السعودية؛ تملك العقار أو اكتساب الحقوق العينية الأخرى على العقار، وذلك في النطاق الجغرافي المشار إليه في الفقرة (2) من المادة (الثانية) من النظام، بما في ذلك مدينتا مكة المكرمة والمدينة المنورة.
2- مع مراعاة ما ورد في الفقرة (1) من هذه المادة وأي مزايا تمنحها أنظمة أخرى، للشركة المشار إليها في الفقرة (1) من هذه المادة تملك العقار أو اكتساب الحقوق العينية الأخرى على العقار اللازمة لمزاولة أنشطتها ولسكن العاملين فيها وذلك في داخل النطاق الجغرافي أو خارجه المشار إليه في الفقرة (2) من المادة (الثانية) من النظام؛ وفقاً لما تحدده اللائحة.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 3 explained in plain English
This article deals with a specific category: a company not listed on the Saudi financial market, established under the Saudi Companies Law, in whose capital one or more persons who do not hold Saudi nationality participate, whether individuals or legal persons.
The article gives this company two rights:
- Ownership within the geographic scope: it may own real estate or acquire other real rights in it within the geographic scope referred to in paragraph 2 of Article 2, that is, the one set by the Council of Ministers, including Makkah and Madinah.
- Ownership for activity and housing: it may own the real estate or real rights needed to carry out its activities and to house its workers, inside or outside the geographic scope, as the regulations provide, subject to the first paragraph and any benefits granted by other laws.
The difference between the two rights is that the first is limited by the geographic scope, while the second goes beyond it but is tied to the company's actual need for its activity and the housing of its employees, with details left to the regulations.
Note that Article 2 limits the right of a non-Saudi mentioned in its first paragraph, in Makkah and Madinah, to a Muslim natural person, whereas this article expressly allows the company concerned to own in them within the geographic scope. Companies considering buying a headquarters or housing for workers may consult a lawyer specialized in real estate or company matters.
Practical example
A limited liability company in Jeddah, established under the Saudi Companies Law, half of whose shares are held by a non-Saudi partner, needs a warehouse for its business and a building to house its employees in an area outside the geographic scope. Paragraph 2 allows it to own what it needs for its activity and its workers' housing outside the scope, as the regulations provide.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 3 of the Real Estate Ownership by Non-Saudis Law
Can a company with a foreign partner buy real estate in Saudi Arabia?
Yes, if it is an unlisted company established under the Saudi Companies Law, it may own within the geographic scope, and may own what its activity and its workers' housing require inside or outside it, as the regulations provide.
Can this company own in Makkah and Madinah?
Yes, paragraph 1 provides that its ownership within the geographic scope includes the cities of Makkah and Madinah.
May the company buy housing for its employees outside the geographic scope?
Yes, paragraph 2 allows it to own the real estate needed to house its workers inside or outside the scope, as the regulations provide.
Articles this article refers to
More articles on Ownership by Foreign Companies and Funds
- Article 4
The article allows listed companies, investment funds and licensed special purpose entities to own real estate in the Kingdom, including Makkah and Madinah, under the Capital Market Law and the Capital Market Authority's controls.
تتملك الشركات المدرجة في السوق المالية السعودية المؤسسة وفقاً لأحكام نظام الشركات، والصناديق الاستثمارية والمنشآت ذات الأغراض الخاصة المرخصة نظامًا؛ العقار وتكت
- Article 7
The article allows diplomatic missions, on a reciprocal basis, to own their official premises and housing for their head and members, and international and regional bodies to own their official premises, with the Ministry of Foreign Affairs' approval.
يجوز -على أساس المعاملة بالمثل- للممثليات الدبلوماسية المعتمدة بالمملكة تملك المقر الرسمي لها ومقر السكن لرئيسها وأعضائها، ويجوز للهيئات الدولية والإقليمية -في
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.