Saudi Arabia opens doors to foreign investment in Mecca, Medina real estate; How will it benefit Indians?
Saudi Arabia has opened up investment opportunities for foreign investors in companies listed in Mecca and Medina, particularly those owning real estate in these key religious cities.
FollowSaudi Arabia's market regulator revealed that foreign investors are now permitted to invest in publicly traded companies that own real estate in Mecca and Medina. This initiative is part of the kingdom's strategy to draw international investment and increase liquidity for projects in these prominent religious cities. The Capital Market Authority (CMA) clarified that foreign investments would be restricted to shares, convertible debt instruments, or a combination of both, while "strategic foreign investors" would be excluded.
Additionally, non-Saudis will be limited to owning no more than 49% of the shares in these companies.
Mecca and Medina, two of the holiest cities in Islam, welcome millions of Muslim pilgrims each year, especially during the Hajj and Umrah seasons. These religious events serve as significant revenue generators for Saudi Arabia, which earned about $12 billion from pilgrimages in 2019. As part of its Vision 2030 initiative, the kingdom aims to attract 30 million pilgrims annually by 2030, to diversify the economy and reduce reliance on oil exports.
Foreign Investment Guidelines:
1. Investments are limited to listed companies based in Mecca and Medina.
2. Foreigners can invest in shares or convertible debt instruments.
3. Strategic foreign investors are excluded from participation.
4. Non-Saudis are prohibited from owning more than 49% of any company's shares.
In 2021, foreign investors were permitted to invest in real estate funds focusing on Mecca and Medina. The recent announcement expands on that policy, providing more opportunities for international investors.
Opportunities for Indian Investors
Indian investors can now engage in this initiative, provided they comply with the CMA's requirements. This presents a chance to benefit from revenue associated with Islamic pilgrimages.
India regularly sends one of the largest groups of pilgrims to Mecca and Medina. In 2023, over 139,000 Indians performed Hajj, with the number rising slightly to 139,964 in 2024. This new rule offers Indian investors an opportunity to tap into this booming sector while also supporting the travel and religious needs of their community.
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