Saudi Arabia Clears Barriers to Foreign Investment in its Stock Market

The Kingdom of Saudi Arabia’s Capital Market Authority (CMA) has announced that it will grant all categories of foreign investors direct access to its stock market starting February 1, 2026.

• •This regulatory overhaul represents a fundamental shift in how the Kingdom manages its capital.
• •By eliminating the “Qualified Foreign Investor” (QFI) framework, the CMA is scrapping stringent requirements that previously restricted market entry to large, institutional international entities.
• •The Main Market will now be open to non-resident foreign investors globally, removing the need for specific qualification hurdles and phasing out legacy “swap agreements” that denied investors direct ownership of shares.

While the move is a milestone in the Vision 2030 roadmap to diversify the economy away from oil, analysts suggest the immediate market reaction may be measured. JP Morgan noted that the practical impact might be limited in the short term, as the majority of large-scale institutional players had already gained access under previous rules. However, the firm highlighted that the “true” catalyst investors are watching for a potential increase in foreign ownership limits, currently capped at 49% for most listed firms.

Despite a challenging 2025 where the Tadawul All-Share Index (TASI) benchmark fell 12.8%, foreign interest has shown resilience. This week’s announcement is the culmination of a “phased” strategy that included opening real estate-linked firms in Mecca and Medina to foreigners and establishing ETFs with partners in Japan and Hong Kong.

By removing these final barriers, the CMA aims to position the Kingdom as a premier international marketplace capable of attracting the massive capital inflows required to sustain its post-oil economic transformation.