Saudi Arabia Caps Foreign Ownership in Listed Companies at 49%

Saudi Arabia’s Capital Market Authority (CMA) has announced a new regulation that prohibits foreign investors from owning more than 49% of shares in any company listed on the Saudi stock exchange. The decision, which takes immediate effect, applies to all foreign investors, including both individuals and institutions, and covers all companies currently listed or to be listed in the future.

The CMA’s move is part of ongoing efforts to regulate foreign participation in the Saudi capital market and ensure compliance with national policies. The new rule sets a clear ceiling for foreign ownership, regardless of the investor’s country of origin or the sector in which the company operates.

According to the CMA, the 49% cap applies to the total shares of any single entity, and not just to a specific class of shares. The regulation is binding for all foreign investors, whether they hold shares directly or through investment funds, derivatives, or other financial instruments. The authority has also clarified that any existing foreign ownership above the new threshold must be brought into compliance, though the mechanism for this adjustment has not been detailed in the announcement.

The CMA stated that the new rule is designed to align with broader economic and regulatory objectives, and to provide clarity for both local and international market participants. The authority will continue to monitor compliance and may take further action if necessary.

The regulation does not affect the rights of Saudi nationals or entities to own shares in listed companies, nor does it impact existing rules for strategic investors or government-related entities. The CMA has called on all market participants to review their current holdings and ensure adherence to the new ownership limits.