The Kingdom of Saudi Arabia has announced a major update for foreign investors. Tadawul, scrapping the Qualified Foreign Investor (QFI) framework.This means any foreign investor, regardless of size or category, can now directly invest across all market segments, reinforcing the Kingdom’s push toward investing in Saudi Arabia.
To understand what this update means for investors and businesses and how to benefit from this opportunity when entering the Saudi market, explore foreign investment in Saudi Arabia.
To understand what this update means for investors and businesses and how to benefit from this opportunity, keep reading this blog
What is the new update?
Saudi Arabia has eliminated the Qualified Foreign Investor (QFI) framework for the Main Market on Tadawul. Previously, foreign investors had to qualify as QFIs and meet strict eligibility criteria to access listed securities.
Under the previous regulations, QFIs were required to maintain around $500 million in assets under management to participate. From 1st February 2026, this requirement, along with similar thresholds, will be removed, allowing all categories of foreign investors to invest directly in listed shares.
What is Qualified Foreign Investor (QFI) Framework?
For many years, Saudi Arabia functioned under a Qualified Foreign Investor system. The significant change removes the QFI concept from the Main Market rulebook and the related eligibility criteria. This update allows individual investors, institutions, funds, and other non-resident investors to enter the market without needing any special qualification status.
At the same time, the Capital Market Authority has eliminated the swap framework that allowed non-resident investors to gain only economic exposure to listed securities through swap agreements. From February 2026, investors will be able to hold direct legal titles to listed securities instead of relying on swaps to monitor performance.
What’s the impact on Tadawul, liquidity, and Vision 2030?
Authorities expect the opening to boost foreign participation and improve liquidity on Tadawul by broadening and diversifying the investor base. Deeper liquidity usually helps narrow spreads, support improved price discovery, and minimise day-to-day volatility over time, reflecting broader economic momentum seen in Saudi Arabia’s industrial growth fueled by manufacturing.
This initiative aligns with the objectives of Saudi Vision 2030 by attracting additional international capital to support major projects and reduce the economy’s dependence on oil. It also aims to strengthen Riyadh’s status as a regional financial hub and make Tadawul one of the top emerging market exchanges.
Comparing to July 2025 changes for GCC residents
This decision is based on previous access changes in July 2025, when the CMA made it easier for specific categories of foreign investors to open accounts. These changes primarily focused on natural foreign investors residing in Gulf Cooperation Council (GCC) countries and individuals who lived in Saudi Arabia or another GCC country.
The July 2025 action was a limited, interim phase, while the February 2026 reform broadens direct access to all categories of foreign investors worldwide. Thus, the new regulations significantly expand beyond the GCC-focused adjustments and finalise the gradual opening process.
Which investors gain and what sectors may benefit
The following foreign investor categories will gain direct access to listed securities on the Main Market:
- Individual non-resident foreign investors
- Foreign institutions and asset managers
- Sovereign funds and pension funds
- Other foreign legal entities that fulfill account-opening criteria with local intermediaries
Sectors likely to attract the most foreign investment include financial services, petrochemicals, and large consumer and industrial companies already in major emerging-market indices. As fintech in Saudi Arabia grows and more listed securities come from digital and financial technology companies, the segment will also attract growing foreign interest.
| Aspect | Previous framework (QFI) | New framework from 1 Feb 2026 |
|---|---|---|
| Market access | Only Qualified Foreign Investors could invest directly in Main Market | All foreign investor categories can invest directly |
| AUM requirement | Minimum around 500 million USD AUM for QFIs | No specific AUM threshold for access |
| Use of swaps | Swaps used to give non-residents economic exposure only | Swap framework removed; direct share ownership allowed |
| GCC residents (July 2025) | Simplified account rules for certain GCC-based or ex-resident investors | Global opening, not limited to GCC-related categories |
| Regulatory authority | Capital Market Authority Saudi Arabia financial regulatory authority | Same authority, under updated rule set |
How to start trading on Tadawul?
To start trading on Tadawul from 1 February 2026, foreign investors will need to follow a structured investor journey that includes regulatory and compliance steps.
- Work with an authorised local broker or custodian to open an investment account
- Complete client due diligence and know-your-customer checks mandated by the financial regulatory authority
- Ensure internal compliance with home-country regulations and any cross-border reporting obligations
Investors need to check the CMA capital rules and FAQs about foreign investment in securities, which provide clear explanations for eligibility, account structures, and ongoing obligations in simple language. It’s also important to clarify tax implications in both Saudi Arabia and the investor’s home country, including any withholding tax on dividends or gains as well as treaty relief options.
How Analytix Can Support You?
The Saudi market opening offers a major opportunity for businesses wanting to expand their regional presence. It is crucial for investors and businesses to understand the regulatory landscape and market dynamics.
Analytix works in this space by helping businesses expand their operations into international markets like Saudi Arabia. Our team provides practical guidance on market entry, regulatory compliance, and strategic planning. We understand how reforms like the capital market opening offer larger business opportunities in the region.
If you’re considering how this update aligns with your expansion plans, reach out to us, and we will help you assess the practical steps and requirements specific to your situation.
