Saudi Arabia has announced a major reform to its equity markets by allowing all categories of foreign investors to access listed securities directly. From 1 February 2026, non‑resident investors from around the world will be able to invest directly in securities listed on the Tadawul Main Market without needing special qualification status or restrictive intermediary arrangements.
Effective 1 February 2026, the reform removes long-standing access restrictions and simplifies how international capital enters the Saudi market.
What Has Changed?
Elimination of the Qualified Foreign Investor (QFI) Regime
Until now, access to the Saudi Main Market required foreign investors to qualify under the Qualified Foreign Investor (QFI) framework. From February 2026, the QFI regime will be removed.
Direct Ownership Replaces Swap Structures
Historically, many foreign investors relied on swap structures to gain indirect exposure to Saudi equities. The new framework prioritises direct legal ownership over synthetic exposure.
Key Implications for Global Investors
Broader Access and Participation
A wider range of investors — including individual non‑residents, foreign institutions, funds, sovereign wealth entities and more — can now enter the Saudi equity market directly. The reform materially lowers entry barriers and reduces structural complexity.
Increased Liquidity & Market Depth
Broader participation is expected to improve liquidity, price discovery, and market depth over time.
Enhanced Transparency and Shareholder Rights
Direct ownership enhances transparency and allows foreign investors to exercise shareholder rights directly.
Alignment With Vision 2030 Economic Reforms
The reform supports the capital-market pillar of Vision 2030, aimed at attracting long-term international investment.
Foreign Investment Trends Before the Reform
Foreign participation in Saudi equities was already significant prior to this reform.
- By the third quarter of 2025, international investors held over SAR 590 billion (~USD 157 billion) in Saudi listed equities.
- Foreign investment in the Main Market increased to roughly SAR 519 billion by the end of 2025 — up from around SAR 498 billion at the end of 2024.
- This highlights sustained international interest in Saudi listed assets.
Practical Considerations for Market Entry
Account Setup and Brokerage Access
To participate directly, foreign investors will need to open investment accounts through licensed Saudi brokers or custodians, complying with local regulatory and anti‑money‑laundering requirements.
Foreign Ownership Limits Remain in Place
While direct access is now permitted, foreign ownership caps remain in place for many listed companies, such as aggregate limits (often set at 49% total foreign ownership and typically 10% per investor) — though some exemptions exist for qualified strategic holdings.
Access Across Main Market Sectors
The reforms apply to all segments of the Main Market — meaning investors can engage with equities across multiple sectors including finance, petrochemicals, consumer goods, and emerging fields like fintech and technology services.
Strategic Implications for Global Portfolios
- Emerging Market Engagement: Saudi equities become more investable for global portfolios and may attract allocations from emerging‑market funds and strategic investors.
- Index Considerations: Persistent liberalisation supports inclusion and weighting in international indices, which can drive passive flows and long‑term investments.
- Regional Integration: Broader access complements other Gulf cooperation initiatives and harmonisation efforts, enhancing the region’s appeal for cross‑border capital flows.
Takeaway
The February 2026 reform fundamentally changes how foreign capital can access Saudi equities.
By removing qualification thresholds, abolishing swap structures, and enabling direct share ownership, the Kingdom is positioning Tadawul as a more accessible and attractive destination for international capital.
While access is broader, successful participation still requires planning around compliance, broker selection, and ownership limits.
How Safari Star Can Help
Capital-market access is only effective when aligned with regulatory, tax, and operational considerations.
- Market access strategy and regulatory compliance support
- Brokerage and custody introductions
- Due diligence and investment structuring advisory
- Cross‑border tax and reporting guidance
Early structuring helps investors enter new markets efficiently while managing regulatory and operational risk.