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Saudi Arabia has announced that starting February 1, 2026, all foreign investors will be able to buy shares on the kingdom’s main stock exchange (Tadawul) directly — without needing to meet special qualification requirements that previously limited access to large institutions. (The National)
Previously, only certain qualified foreign investors or institutions with very high assets under management could invest directly in Saudi stocks, making the market relatively closed to most overseas buyers. (Investopedia)
What exactly changed?
Under the new rules from the Capital Market Authority (CMA), Saudi Arabia has eliminated the “Qualified Foreign Investor (QFI)” framework that placed conditions on who could participate. This means individual investors and smaller institutions abroad can now trade Saudi stocks just like domestic investors, without needing to jump through extra regulatory hoops.
Regulators hope this will help expand and diversify the investor base, bring more global capital into the market, and improve liquidity in one of the Middle East’s largest equity markets.
International investors already hold significant positions in Saudi stocks — recorded as well over SR 500 billion (~$137 billion) by late 2025 — and authorities see opening the market fully as a way to build on that participation. (Arab News)
Why this matters now
This move comes after years in which Saudi stocks lagged many global peers, including in 2025 when the main index saw notable declines. By removing barriers, the kingdom is signaling to global investors that it wants greater integration with international capital markets. (Gulf News)
It also aligns with broader economic reforms under Vision 2030, the long-term strategy to diversify the Saudi economy beyond oil by attracting foreign capital and increasing private-sector participation.
What this means for investors
For global investors, especially those who previously could only access Saudi stocks through indirect channels or large institutional vehicles, this change is significant. It opens up direct ownership in companies that are major players in energy, banking, materials, consumer sectors, and more — many with large scale and real economic footprint.
For Muslim investors, this expansion matters in a few specific ways:
- Greater access to companies with real economic activity — Saudi Arabia’s market includes many firms rooted in tangible sectors, which often align better with Shariah investment principles.
- More transparent direct ownership — direct investment can make it easier to assess compliance with Shariah screens compared with indirect or synthetic products.
- Broader opportunity set — widening the universe of available shares increases the chance of finding well-run, fundamentally strong companies that meet halal criteria.
That said, the usual Shariah analysis still applies: investors must still evaluate each company’s business activities, debt levels, and revenue sources before determining if it is compliant with Islamic finance principles.
A step, not a guarantee
Removing restrictions does not mean foreign capital will pour in immediately or that stock prices will jump overnight. Some analysts expect more gradual inflows, especially as global funds weigh valuations, governance, and liquidity before reallocating significant capital. (Reuters)
But by opening its doors completely, Saudi Arabia has made a clear statement: it is ready to compete for global investment, and its market — long dominated by regional players — is now fully accessible to the world.