Saudi Arabia’s Capital Market Authority ( CMA ) has launched a public consultation on its proposed regulatory framework for an offshore securities business licensing scheme.

The scheme is part of the kingdom’s capital market reforms, aimed at gradually opening its financial markets to international investors. The reforms have attracted substantial global institutional interest, with foreign holdings reaching 423 billion Saudi riyals ( US$112.8 billion ) by the end of 2024.

Underscoring the kingdom’s ambition to become a leading regional and global financial centre, the offshore securities business licence will enable licensed institutions to carry out securities activities, as well as manage investment funds that invest in securities within the kingdom.

These services may be provided to foreign clients outside the kingdom, in addition to a specified category of local clients.

The licence will allow its holder to invest in the Saudi capital market without the need to meet the qualification requirements typically imposed on qualified foreign investors.

It will also give the holder access to a broader client base, including transactions with sovereign investment funds such as the Public Investment Fund, which manages over 3.5 trillion riyals in assets as of 2024, as well as pension funds within the kingdom.

The 30-day consultation period ends on June 28th.

Market access

In 2015, Saudi Arabia launched the qualified foreign investor ( QFI ) programme to provide foreign investors direct access to domestic markets. Since then, the CMA has gradually dismantled many of the restrictions that once limited foreign participation. In 2018, asset thresholds for QFI eligibility were lowered, per-investor ownership caps were raised from 5% to 10%, and the pool of eligible investors was expanded.

Also, improvements to corporate governance, financial disclosure, and market infrastructure were introduced, helping the kingdom secure inclusion in the MSCI and FTSE Russell emerging market indices in 2019.

The impact was instant, with capital inflows into Saudi markets surging from 13.7 billion riyals in 2018 to 134.48 billion riyals the following year. By the end of 2024, foreign investors held about 423 billion riyals in equities, up from around 86 billion riyals just six years earlier.

Beyond these broad reforms, the CMA has continued to facilitate foreign access. In January 2025, it published a landmark rule change allowing foreign ownership in Saudi-listed companies that own real estate assets in the holy cities of Makkah and Madinah.

Previously, such ownership was prohibited due to restrictions on property in the two cities. Under the new regulation, non-Saudi investors – whether individuals or institutions – can now own up to 49% jointly of shares or convertible debt in these companies.