The Kingdom of Saudi Arabia has announced a landmark reform for foreign investors by eliminating the Qualified Foreign Investor (QFI) framework on Tadawul. This change means that any foreign investor—regardless of size or classification—can now invest directly across all market segments. The move reinforces Saudi Arabia’s broader strategy to position itself as a leading global investment destination.
To understand what this update means for investors and businesses, and how to benefit from the expanding opportunities in the Saudi market, continue reading this blog.
What Is the New Update?
Saudi Arabia has officially removed the Qualified Foreign Investor (QFI) framework for the Main Market on Tadawul. Previously, foreign investors were required to qualify under strict eligibility criteria before accessing listed securities.
Under earlier regulations, QFIs typically needed to maintain approximately USD 500 million in assets under management to participate. From 1 February 2026, this requirement—and similar thresholds—will be abolished, allowing all categories of foreign investors to invest directly in listed shares without special status or minimum asset requirements.
What Was the Qualified Foreign Investor (QFI) Framework?
For many years, Saudi Arabia operated under a Qualified Foreign Investor system that restricted direct market access to investors meeting specific financial and regulatory criteria. The latest reform removes the QFI concept entirely from the Main Market rulebook, along with its associated eligibility conditions.
As a result, individual investors, institutions, funds, and other non-resident investors can now enter the market without undergoing a qualification process.
In parallel, the Capital Market Authority (CMA) has also eliminated the swap framework. Previously, non-resident investors could only gain economic exposure to Saudi-listed securities through swap agreements, without holding legal ownership. From February 2026 onward, foreign investors will be able to hold direct legal title to listed securities, replacing indirect exposure with full ownership rights.
Impact on Tadawul, Liquidity, and Vision 2030
The Saudi authorities expect this reform to significantly increase foreign participation and enhance liquidity on Tadawul by expanding and diversifying the investor base. Greater liquidity typically leads to narrower bid-ask spreads, improved price discovery, and reduced market volatility over time.
This development aligns closely with Saudi Vision 2030, which aims to attract international capital, support large-scale development projects, and reduce the Kingdom’s reliance on oil revenues. It also strengthens Riyadh’s ambition to become a regional financial hub and positions Tadawul among the world’s leading emerging market exchanges.
Comparison With July 2025 Changes for GCC Residents
This reform builds on earlier regulatory changes introduced in July 2025, when the Capital Market Authority simplified market access for certain categories of foreign investors. Those changes primarily benefited natural persons residing in Gulf Cooperation Council (GCC) countries, as well as individuals living in Saudi Arabia or other GCC states.
However, the July 2025 measures were limited in scope and intended as an interim step. The February 2026 reform represents a comprehensive opening of the market, extending direct access to all categories of foreign investors globally. It effectively completes the gradual liberalization process that began with GCC-focused adjustments.
Which Investors Benefit and Which Sectors May Attract Capital?
The following categories of foreign investors will gain direct access to listed securities on Tadawul’s Main Market:
- Individual non-resident foreign investors
- Foreign institutional investors and asset managers
- Sovereign wealth funds and pension funds
- Other foreign legal entities that meet account-opening requirements with local intermediaries
Sectors expected to attract the highest levels of foreign investment include financial services, petrochemicals, and large consumer and industrial companies already represented in major emerging market indices. Additionally, as Saudi Arabia’s fintech ecosystem continues to expand and more digital and financial technology firms become listed, this segment is likely to see growing interest from global investors.
How to Start Trading on Tadawul
From 1 February 2026, foreign investors looking to trade on Tadawul must follow a structured onboarding process that complies with Saudi regulatory and compliance requirements.
To begin trading, investors should:
- Engage an authorised local broker or custodian to open a Saudi investment account
- Complete client due diligence and Know Your Customer (KYC) procedures as required by the Capital Market Authority (CMA)
- Ensure compliance with home-country regulations, including any applicable cross-border reporting or disclosure obligations
Investors are advised to review the CMA’s capital market rules and official FAQs on foreign investment in securities, which outline eligibility criteria, account structures, and ongoing compliance responsibilities in clear and practical terms.
In addition, foreign investors should assess the tax implications of investing in Saudi Arabia, as well as in their home jurisdiction. This includes understanding any potential withholding taxes on dividends or capital gains and determining whether double-taxation treaties or other relief mechanisms may apply.
How Arabdreams Can Support You?
ArabDreams supports businesses in navigating international expansion, with a strong focus on high-growth markets such as Saudi Arabia. Our team delivers practical, end-to-end guidance on market entry strategies, regulatory compliance, and long-term planning. We closely track reforms like the capital market opening and help clients translate these changes into tangible business opportunities.If you are evaluating how this update fits into your expansion strategy, get in touch with ArabDreams. We will help you assess the practical steps, regulatory requirements, and strategic considerations tailored to your specific objectives.
