Articles

Start a Real Estate Business in Saudi Arabia

Nishad Abdu Rahiman
August 8, 2024

Saudi Arabia is witnessing a boom in the real estate business. With the implementation of Vision 2030 and the establishment of the Real Estate General Authority (REGA), the Kingdom is attracting both foreigners and nationals alike to invest in the real estate business in Saudi Arabia.

Are you planning to start a real estate business in Saudi Arabia? But don’t have much idea regarding the process and procedures involved? Don’t worry, read this blog where we have shared information based on the experience we have gained in this field.

So let’s dive in!

Benefits of Entering into the Saudi Arabia Real Estate Market

Saudi Arabia offers a plethora of business opportunities in light of its Vision 2030 and Mega and Giga projects. Entering into the real estate business in Saudi Arabia provides one with numerous benefits like the few mentioned below:

1. Offers New Opportunities

The real estate market in Saudi Arabia offers great opportunities and the government is working hard to attract investments and grow its economy by providing numerous opportunities in the real estate and construction sector of the country.

2. Growing Economy

As one of the countries hosting a large number of immigrants, the economy of the country is growing. And the ambitious plan of the country like Vision 2030 is diversifying the economy and all these are making Saudi Arabia a fertile land for real estate investment.

3. Supportive Government

The government of Saudi Arabia has been very open to the success and growth of the real estate business in Saudi Arabia and is providing many incentives and support for those who wish to start a real estate business in Saudi Arabia.

4. Open to both Domestic and Foreign Investments

Saudi Arabia is very open to foreign investments and is encouraging the foreigners to start their business in the country, no matter if it is a real estate business or any other business, Saudi is open to potential investments from foreigners that can contribute majorly to its economic diversification efforts.

Significance Of Real Estate Business in Saudi Arabia

The real estate sector in Saudi Arabia plays a major role in the transformation of the nation to a non-oil-dependent economy. The real estate business in the Kingdom has emerged as a critical player in the country’s economic growth attracting investment from both local and international businesses. Through various mega and giga projects like NEOM, Qiddiya, the Red Sea Project, the government’s efforts for urban development and redefining the urban landscape are evident.

Following is the list of the significance of real estate business in Saudi Arabia

1. Housing

Sakani, the Saudi Arabian housing program initiated by the government aims to provide affordable homes to around one million citizens of the country thus reducing the housing shortage.

2. Commercial Real Estate

Saudi Arabia is witnessing massive growth in the commercial real estate sector with a significant increase in the demand for office and retail spaces in the country. The commercial real estate sector is expected to see a huge rise in demand as the Kingdom emphasizes the development of the private sector.

3. Real Estate Finance

The Saudi Arabian Monetary Authority (SAMA) has introduced various steps and initiatives to boost the growth of the real estate finance sector in the country, like introducing new mortgage products and reducing the minimum down payment for mortgages.

4. Tourism

Vision 2030, the ambitious plan of Saudi Arabia, aims to increase tourism activity in the country and boost the leisure and hospitality real estate sector. Through various government initiatives like the Red Sea Project and Qiddiya, the government aims to develop new tourism destinations and boost the tourism sector of the country.

So looking at the overall state of the real estate business in Saudi Arabia, the sector is expected to continue growth. Various government initiatives and a rise in population and housing needs are said to boost the real estate sector in the country.

Real Estate Licensing Requirements in Saudi Arabia

Real estate license in Saudi Arabia is provided under 2 conditions. Firstly, the total cost of the project including the cost of land and construction should be a minimum of 30 million Saudi Riyals. And secondly, the investment or establishment of business should be made outside the city of Mecca and Medina.

Below is the list of required documents, rules, and restrictions to be followed to obtain a real estate license in Saudi Arabia.

Documents Required:

The applicant should provide:

Shareholding partner’s commercial registration copy which is certified by the Embassy of Saudi Arabia.
A copy of the financial statement of the applicant’s foreign company for the last financial year which is certified by the Embassy of Saudi Arabia.
If the partner holds the nationality of any GCC countries, and their data is not registered in the ABSHAR system, a copy of the national identity has to be submitted.

Rules and Restrictions to be Followed:

There must be consistency in the capital per the financial limits stated for the type of activity and the total percentage of the Saudi shareholder(s).
The Premium residence holders in the country would be exempted from the submission of the above said documents.
While filling out the online application, if any of the partners were previously licensed by the Ministry of Government details regarding the same should be stated in the partners’ data.
When filling out the electronic application, data regarding the applicant’s Saudi national identity or Premium residence or residence has to be provided, or as the commercial registration data for the Saudi companies participating.
If the license is obtained for businesses that are related to property investment projects, the cost of the project to be constructed should be at least 30 million Saudi Riyal for the land and buildings and should be placed outside the domicile of Mecca and Medina.

How to Start a Real Estate Business in Saudi Arabia

Research About Your Market

Conducting market research is crucial before the start of your business to understand the competitors and nature of the target audience.

Prepare a Business Plan

Prepare a business plan and it should contain the following points:

Analysis of the market
Financial projections
Strategies of the competitor
Organizational structure
Legal and regulatory compliance

Make Decision on the Legal Structure of your Business

The government of Saudi Arabia is very flexible when choosing the legal structure for the business. The legal structure of the business should be based on the business goals and requirements of the business.

Registration with Relevant Legal Structure

Register your real estate business with the relevant legal authority, this will give the legal authorization for conducting your business in the Kingdom.

Choose a Local Sponsor

Depending upon the business activity, the businesses have to choose a local sponsor and they will assist you in understanding and obeying Saudi Arabian rules and regulations.

Rent or Lease an Office Space

Choose a commercial space depending on the requirements of the business you plan to operate.

Register Your Business

Get registration for your business from the relevant authority. The duration and process for registration vary according to the business activity you wish to do.

Promote Your Business

Promote your business by marketing your business. Be careful to choose a proper platform to market your business.

Obtain Your Real Estate License With the Help of Analytix

Analytix is a leading business consultant in the country and is committed to helping our clients to achieve their business goals and thrive in the competitive real estate market of the Kingdom. With decade-long experience in helping set up real estate companies in Saudi Arabia, we are well aware of the process and procedures involved to set up a real estate business in Saudi Arabia. Contact us to streamline your real estate business in Saudi Arabia.

Conclusion

Now you are well informed about the real estate business in Saudi Arabia and how to obtain a license for the same. Do you have any doubts that are still unanswered? Don’t worry, contact us and let our experts work on your project. Connect with us to know more about the real estate business in Saudi Arabia.

Frequently Asked Questions

If your question is not addressed here, please feel free to reach out to us. We value your inquiry.

How can I get a real estate license in Saudi Arabia?

If you have a residency permit in Saudi Arabia and fulfill all other requirements, you can apply for a real estate license at REGA.

What is the FAL license in Saudi Arabia?

The FAL license in Saudi Arabia is an official permit that allows individuals and establishments to conduct real estate activities in the country that are limited to the capacity of the license and procure commission and do marketing of the real estate.

.