Saudi Arabia has announced the opening of its financial markets to all categories of foreign investors, removing many previous restrictions that limited stock exchange participation. Previously, this right was reserved for Saudi citizens and later extended to qualified foreign investors under specific approvals and structures, such as swaps.
Under the new rules, all non-resident foreign investors can now invest directly in stocks, gaining full capital exposure rather than only economic exposure through derivatives. The changes will take effect at the beginning of next month, with the Capital Market Authority (CMA) serving as the implementing regulator. This significant move comes after a long-term, gradual liberalization process that began with swap agreements in 2008 and the Qualified Foreign Investor (QFI) system introduced in 2015.
These measures have culminated in full market liberalization, expanding access to large and strategic stocks in a market filled with opportunities. Saudi regulations will maintain the previous maximum limit for foreign ownership at 49 percent of the total shares in a listed company, with lower limits for individual investors. These thresholds are designed to balance market openness with the protection of national assets and financial wealth, while ensuring overall market stability.
The reforms are part of Vision 2030, which aims to attract long-term global capital, enhance market liquidity, and strengthen Saudi Arabia’s position as a leading emerging markets hub. The changes will also facilitate foreign investor participation in upcoming initial public offerings (IPOs) and help diversify the investor base. These reforms may also lead to higher valuations for Saudi assets and increased weighting in benchmark indices. Restrictions on foreign exchange have been eased, allowing investors to transfer profits, sale proceeds, and capital through standard banking channels.
Financial transfers are still subject to anti-money laundering checks, identity verification, and any remaining foreign exchange controls. In principle, funds can move freely, but all transfers must comply with both Saudi regulations and the rules of the investor’s home country. In light of this development, it is essential for Kuwait’s Capital Markets Authority (CMA) to closely study Saudi Arabia’s pioneering move and seek to emulate it by accelerating Kuwait’s integration into global markets and opening the door for foreign investors.
Economic challenges are inevitable, and we must prepare by taking bold steps, deepening global economic integration, and modernizing education to keep pace with progress, rather than clinging to outdated practices. Enough is enough with the unjustified expenditures, delays in diversifying income sources, stagnation in administrative development, and failures to improve the education system.
By Ahmad alsarraf e-mail: [email protected]
