Saudi Arabia will fully open its financial markets to foreign investors from February 1, removing long-standing restrictions as the kingdom steps up efforts to attract global capital and deepen market liquidity.
The Capital Markets Authority (CMA) announced on Tuesday that it has approved regulatory amendments eliminating the concept of the Qualified Foreign Investor (QFI), a framework that previously limited direct market access to a narrow group of large international institutions with established track records.
Under the new rules, investors from around the world will be able to invest directly in Saudi Arabia’s capital market without meeting QFI thresholds. The CMA said the move is intended to boost foreign inflows, enhance liquidity and strengthen the competitiveness of the Saudi market.
The decision aligns with the kingdom’s broader economic transformation agenda, which seeks to reduce reliance on oil revenues and position Saudi Arabia as a regional financial hub. Authorities have already taken steps to broaden international participation, including the launch of exchange-traded funds in partnership with markets in Japan and Hong Kong.
Regulators have also gradually relaxed restrictions in other sensitive areas. Last year, foreign investors were allowed to buy shares in listed companies that own real estate in the holy cities of Mecca and Medina, while maintaining limits on direct land ownership.
Market reaction, however, is expected to be measured. JPMorgan noted that the practical impact may be limited, as most major institutional investors already had access under existing rules. Analysts said the more significant reform investors are watching for is a change to foreign ownership caps, particularly the 49% limit on foreign holdings in listed companies.
“Any adjustment to foreign ownership limits would likely have a more meaningful effect on market valuations and inflows,” JPMorgan said, adding that such changes are unlikely before the second half of the year at the earliest.
Speculation around easing ownership caps previously fueled a rally in Saudi equities. Stocks jumped in September following reports that the CMA was considering relaxing the 49% ceiling to revive interest in the region’s largest stock exchange.
Despite these efforts, the Saudi market has struggled to regain momentum. The benchmark Tadawul All Share Index fell 12.8% in 2025 and is down about 1.9% so far this year, according to LSEG data.
By removing barriers to entry, authorities are signaling a renewed push to draw long-term foreign investors at a time when competition for global capital is intensifying. While immediate gains may be modest, policymakers view the reform as a necessary step toward building a more open, liquid and internationally integrated financial market.
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