Subject to acquisition of the Ministry of Investment license for real estate investment, real estate development is a permitted activity for foreign companies. In order to obtain the license, the intended real estate project must have a value of at least SAR30 million and must fall outside the cities of Mecca or Madinah. It is impermissible for a non-Saudi (which includes GCC nationals, GCC companies, and Saudi companies with an ultimate foreign shareholder) to own or rent property in the cities of Mecca and Madinah.
Off-plan real estate development is subject to the off-plan sales programme operated by the Ministry of Housing (known as “WAFI”). WAFI was approved by Council of Ministers decision 563 issued on 4/12/1438H (corresponding to 27 August 2017), so it is a relatively recent development. The WAFI requirements apply to any off-plan sale or lease of real estate, whether in the residential, commercial, investment, offices, services, industrial, tourism, or any other sector, and it further includes the marketing or advertising of such off-plan sales or lease activities.
Any such off-plan sale or lease activity (i.e. whether developing, marketing, selling) requires a license, which is obtained by application to the WAFI Committee. The Committee is entitled to authorize exceptions to such requirements for small scale sale or lease activities.
