Saudi Arabia to Open Financial Market to All Foreign Investors Next Month

Saudi Arabia announced on Tuesday that it will open its capital market to all categories of foreign investors starting February 1, 2026. The move eliminates the Qualified Foreign Investor (QFI) framework in the Main Market, allowing direct investment without prior qualification. The Capital Market Authority (CMA) said the decision aims to attract more international capital and enhance liquidity in the market.

The CMA also removed the regulatory framework for swap agreements, which allowed non-resident foreign investors to access economic benefits from listed securities without direct ownership. This change allows foreign investors to buy shares directly in the Main Market. International investors' ownership in the Saudi capital market reached SAR590 billion by the end of the third quarter of 2025, up from SAR498 billion in 2024.

Saudi Arabia has been gradually easing access for foreign investors in recent months. In July 2025, the CMA simplified procedures for investment accounts for certain categories of foreign residents. The February 1 opening represents a broader and more permanent step toward market liberalization.

Why Did This Happen?

The decision aligns with Saudi Arabia's broader Vision 2030 plan to diversify its economy away from oil. The CMA emphasized that the move supports inflows of international capital and strengthens the Kingdom's position as a global investment hub. The removal of QFI requirements and swap agreements makes the market more accessible and attractive to a wider range of investors.

The CMA also noted that the changes are consistent with earlier reforms that began in 2025, including relaxed rules for certain categories of foreign investors. This gradual approach is intended to build confidence in the market and attract long-term investment.

How Did Markets React?

The announcement was well received by investors. Saudi stocks saw a positive reaction in early trading on the day of the announcement. International investors already hold significant stakes in the kingdom's capital market, with ownership reaching SAR590 billion by the end of the third quarter of 2025.

The CMA reported that international investments in the main market stood at SAR519 billion in the third quarter of 2025, a notable increase from the previous year. The changes are expected to further boost this figure as more investors enter the market.

What Are Analysts Watching Next?

Analysts are watching whether the new rules will significantly increase foreign investment in the market. Some have predicted that the move could attract more funds from Asian and European investors who previously faced higher barriers to entry.

The CMA also plans to continue implementing complementary reforms to further open the capital market. These could include additional measures to ease foreign ownership limits and improve market transparency.

The success of the reforms will depend on broader macroeconomic conditions and global investor sentiment. Analysts also noted that the CMA has been working on additional initiatives, such as exchange-traded funds in collaboration with partners in Japan and Hong Kong.