A COMPREHENSIVE GUIDE TO SETTING UP A REAL ESTATE COMPANY IN SAUDI ARABIA
This article has been researched and written by the Business Development Team at Creation Business Consultants. AI has not been used in generating this article.
The Saudi Arabian real estate market offers a wealth of opportunities for investors, fuelled by a booming economy and transformative national initiatives. With the market projected to grow from USD 74.99 billion in 2025 to USD 109.63 billion by 2030 at a compound annual growth rate (CAGR) of 7.89%, the sector spans residential, commercial, industrial, and mixed-use properties. This guide provides a detailed roadmap for establishing a real estate company in Saudi Arabia, covering legal frameworks, licensing requirements, practical setup steps, financial considerations, and key growth areas.
Saudi Arabia’s real estate market is thriving, driven by rapid urbanization, population growth, and the ambitious Vision 2030 plan. Major cities like Riyadh, Jeddah, and Dammam are witnessing surging demand for housing and commercial spaces. Megaprojects like NEOM, the Red Sea Project, and Qiddiya Entertainment City are creating new economic hubs and boosting demand across all property types.
Importance of Real Estate Companies
Real estate firms are vital to Saudi Arabia’s development, addressing the rising need for residential, commercial, and industrial properties. They support the goals of increasing homeownership and fostering sustainable urban growth, while also driving economic diversification and attracting foreign investment.
KEY REGULATIONS FOR ESTABLISHING A REAL ESTATE COMPANY
Saudi Arabia’s Vision 2030 and Real Estate
Vision 2030 prioritizes urban development and large-scale real estate projects, creating opportunities in development, property management, and brokerage. The plan aims to build sustainable cities and deliver 1.5 million new housing units by 2030, making real estate a cornerstone of the Kingdom’s economic transformation.
Investors can choose from these company structures:
Limited Liability Company (LLC): Best for small to medium businesses, with liability protection and minimal capital requirements.
Joint Stock Company (JSC): Ideal for large-scale ventures, with options to list on the Saudi stock exchange (Tadawul).
Professional Partnership: Suited for specialized services like consultancy or architecture.
Foreign Investment Regulations
Recent reforms allow 100% foreign ownership in most real estate activities, removing the need for a Saudi partner. However, property ownership in Mecca and Medina remains restricted to Saudi nationals. Foreign investors must secure an investment license from MISA and comply with Saudization policies, requiring a percentage of Saudi employees.
TYPES OF LICENSES AND PERMITS
Real Estate Brokerage License
This license is required for facilitating property transactions. Individuals need relevant qualifications and training on local regulations, while companies must employ a licensed broker and maintain a compliant office. Applications are processed via REGA’s portal in 4-6 weeks.
Real Estate Development and Investment License
For land development or construction, this license requires an investment license from MISA. Applicants must prove financial capacity and technical expertise, with large projects (over SAR 30 million) facing additional review.
Property Management and Maintenance License
This covers leasing and maintenance services. Companies must demonstrate technical skills and compliance with the Ejar system, a digital platform for rental agreements. Proficiency in tenant management is key.
SETTING UP A REAL ESTATE COMPANY: STEP-BY-STEP PROCESS
Step 1: Choosing a Company Name and Structure
Register a unique name via the Ministry of Commerce’s portal and select a structure (LLC, JSC, or partnership) based on your business scale and goals.
Step 2: Obtaining Licenses and Approvals
Brokerage: Submit qualifications and plans to REGA.
Development: Provide feasibility studies and financials to MISA.
Property Management: Show compliance with Ejar and technical expertise.
Step 3: Establishing a Local Office
Pick a location in a hub like Riyadh (government access), Jeddah (tourism focus), or Dammam (industrial base). After registration, secure a municipality license, register with the General Authority of Zakat and Tax (GAZT), and enroll in social insurance.
COMPLYING WITH SAUDI REAL ESTATE REGULATIONS
Saudi Real Estate Law Compliance
Follow rules on contracts, taxes, and title transfers, ensuring adherence to consumer protection laws to avoid penalties.
Data Protection and Privacy
The Personal Data Protection Law (PDPL), effective 2023, mandates secure handling of client data. Implement robust security measures.
Foreign Ownership Regulations
While 100% foreign ownership is permitted, restrictions in Mecca and Medina apply, and Saudization compliance is mandatory.
INFRASTRUCTURE AND SUPPORT
Investment in Infrastructure
Government spending on transportation, utilities, and digital tools like Ejar and Sakani supports real estate growth.
Collaborations and Partnerships
Partner with construction firms or architects to enhance projects. Government financing and guidance bolster both local and foreign investors.
FINANCIAL CONSIDERATIONS: TAXES, COSTS, AND FUNDING
Taxation and Incentives
Corporate Income Tax: 20% for foreign firms.
Zakat: 2.5% for Saudi firms.
VAT: 15% on commercial transactions.
Incentives: Tax relief for projects tied to Vision 2030.
REAL ESTATE MARKET TRENDS AND OPPORTUNITIES
Urbanization and Demand
Population growth is boosting demand for diverse property types, especially affordable housing and mixed-use developments.
High-Growth Sectors
Residential: Middle-income housing, targeting 1.5 million units by 2030.
Commercial: Flexible offices and retail centers.
Industrial: Warehousing and logistics hubs.
Mixed-Use: Combining living, working, and leisure spaces.
CONCLUDING ADVICE
Setting up a real estate company in Saudi Arabia requires careful planning, regulatory compliance & market understanding. Choosing the right structure depends on your business model & investment goals:
Foreign-Owned LLC – Ideal for investors seeking full ownership & operational flexibility in most real estate activities.
Joint Stock Company (JSC) – Best for large-scale projects with plans to attract investors or list on Tadawul.
Free Zone Setup – Suitable for firms focusing on large-scale developments within economic cities & special zones.
Key factors to consider:
✅ Licensing & regulatory requirements for real estate activities ✅ Market demand in key cities & high-growth sectors ✅ Compliance with ownership, tax & Saudization policies
Need expert guidance? Our team has extensive experience assisting real estate firms with investment structuring, licensing & compliance in Saudi Arabia.
