Real Estate Investment in Saudi Arabia: Legal Structures, Asset Holding, and Exit Strategy

NH Management explains how foreign investors can structure real estate investments in Saudi Arabia, covering legal vehicles, licensing, exit planning, and Vision 2030 mega-project zones.

Real Estate in Saudi Arabia: A Market Built for Long-Term Plays

From Riyadh’s booming financial districts to luxury coastal projects like AMAALA, NEOM Sindalah, and Red Sea Global, Saudi Arabia’s real estate sector is no longer an insiders-only domain. With 100% foreign ownership now permitted, clear regulatory pathways, and massive government backing of flagship zones, the country is now a prime real estate investment destination — for developers, asset managers, and individual investors alike.

But investing in Saudi real estate — whether for development or long-term yield — requires the right legal structure, licensing, and exit strategy. NH Management helps clients structure Saudi property ventures in ways that are tax-efficient, compliant, and exit-ready.

Investment Channels: What You Can Own as a Foreign Investor

Foreign investors can now directly invest in:

• Residential property in licensed development zones

• Commercial and office assets via corporate ownership

• Hospitality assets (hotels, resorts, serviced apartments)

• Development land through licensed real estate entities

• Shares in real estate investment funds (REITs) or private SPVs

Note: Some areas remain restricted (e.g. Mecca and Madinah), but most economic cities and investment zones are open to international capital — especially under Vision 2030 initiatives.

Legal Structures for Real Estate Investment

1. SARL (LLC)

Most common for real estate development, leasing, or asset management companies

• 100% foreign ownership permitted via MISA license

• Ideal for direct property acquisition or multi-asset portfolios

• Can hold land, lease, operate, and manage contracts

• Can own and develop real estate as a standalone entity or project vehicle

Best for: Active investors, developers, family offices

2. SPV (Special Purpose Vehicle)

Used to isolate specific property assets or developments

• Often created as a subsidiary of a foreign holdco or Saudi SARL

• Can hold a single hotel, resort, commercial tower, or plot

• Useful for joint ventures, risk isolation, or sale of asset without affecting group

Best for: Joint ventures, co-investments, asset flips

3. REIT Participation or Co-Investment Structures

Regulated by the Capital Market Authority (CMA)

• Indirect investment into income-generating real estate

• Open-ended or closed-end fund models

• Ideal for passive investors and institutional entrants

Best for: Yield-driven strategies, minimal operational footprint

Licensing & Regulatory Authorities

Authority	Role
MISA (Ministry of Investment)	Issues investor licenses for real estate firms
REGA (Real Estate General Authority)	Regulates development and brokerage activities
ZATCA	Manages VAT, CIT, and property-related taxes
Ministry of Municipal, Rural Affairs	Approves land zoning and building permits
Giga Project Zones (NEOM, Red Sea, Diriyah)	Provide direct licensing for project-aligned investments

NH Management manages all required approvals across zones and authorities, including site-specific due diligence.

Tax and Financial Planning Considerations

• Corporate Tax: 20% on net income for foreign-owned entities

• Zakat: 2.5% on capital and retained earnings (Saudi-owned portion)

• VAT: 15% on real estate services, rental income (exceptions apply)

• Capital Gains: Taxed on disposal unless part of a qualifying restructuring or treaty-exempt structure

• Withholding Tax: On repatriated dividends or rental returns to foreign parent (can be reduced via DTT)

Exit Strategy Planning

At NH Management, we advise real estate clients to structure with exit in mind:

• SPV-based asset isolation enables clean sale of individual projects

• Share sale vs asset sale planning for VAT, WHT, and capital gains

• Use of holding company in DTT jurisdiction for optimized repatriation

• Preparation for IPO or REIT listing if scaling into income-producing portfolios

• Pre-exit tax clearance with ZATCA and legal review of asset title and liabilities

NH Insight: Don’t Just Buy — Structure for Control and Scale

Saudi Arabia’s property market is not a free-for-all. It is open, but regulated — and investors who build compliant, bankable structures from the start are the ones who can scale, refinance, or exit at a premium.

NH Management helps clients navigate every layer: from land acquisition and licensing to tax structuring, JV setup, and divestment strategy.

Looking to invest in or develop real estate in Saudi Arabia? NH Management offers end-to-end structuring, licensing, and exit advisory — from single assets to multi-billion-riyal portfolios. Get in touch with us!