Islamabad, Jan 28: Saudi Arabia has announced a groundbreaking policy change that will allow foreign investment in companies owning real estate within Makkah and Madina, Islam’s two holiest cities. This strategic move aims to enhance the kingdom’s appeal to global investors, particularly those interested in the lucrative market generated by the Islamic pilgrimage.
The announcement from the Capital Market Authority (CMA) reflects Saudi Arabia’s broader efforts to diversify its economy and reduce its dependence on oil revenues, in line with the Vision 2030 reform agenda.
The new regulations will provide an opportunity for foreign investors to purchase shares or convertible debt in companies whose revenues are closely tied to the annual pilgrimages of Hajj and Umrah. These pilgrimages are vital to Saudi Arabia’s economy, contributing significantly to the nation’s wealth.
In 2019 alone, the kingdom earned approximately $12 billion from these religious events. Saudi Arabia has set an ambitious goal of hosting 30 million pilgrims annually by 2030, a target that highlights the importance of the pilgrimage industry in its economic diversification plan. 
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Saudi Arabia’s stock market, the largest in the Gulf, has already attracted substantial foreign investment since opening its doors to international investors in 2015.
The recent policy change is expected to provide greater liquidity to projects in Makkah and Madina, fueling the growth of the religious tourism sector.
However, foreign ownership will be capped at 49%, and strategic foreign investors will be excluded from the new regulations.
With this move, Saudi Arabia strengthens its position as a regional financial hub while tapping into the enormous potential of its religious tourism sector, further advancing its Vision 2030 goals.
