Offshore money enters Tadawul through licensed Saudi brokers, and since 1 February 2026 it no longer needs the qualified foreign investor gate. On 6 January 2026, the Capital Market Authority removed the QFI framework. Main Market shares opened to all foreign investors. The 10 percent single-holder cap and the 49 percent aggregate cap still stand.
The old system sorted foreign demand into categories. Asset floors applied. That filter is gone. Institutions of any size, and foreign individuals for the first time, can now buy Saudi-listed shares directly. The Saudi Exchange, known as Tadawul, listed 239 main-market companies as of 10 October 2024, with market value above $3 trillion as of July 2024. We covered a connected angle in What is Tadawul, the Saudi stock exchange.
What was the Saudi CMA qualified foreign investor regime?
The Saudi CMA qualified foreign investor regime was the main doorway for offshore institutions. It set a floor of 1.875 billion Saudi riyals in assets, about $500 million, per the Latham & Watkins client alert. It added oversight tests and a track-record check.
Access ran through a custodian and a licensed capital market institution. The authority eased the tests over time, yet the category system itself stayed. Qualification stayed the gate for direct share purchases.
How does offshore money enter the market now?
Direct purchase is the default route. A foreign investor opens the trade through a licensed Saudi brokerage firm. Custody and settlement arrangements complete the chain. Market conduct rules apply as for any other holder.
The classification layer is gone. No eligibility tests apply. No QFI registration file is needed. No minimum asset floor stands in the way. The market kept its plumbing. Only the entry categories changed.
What ownership limits still apply?
Two caps survive the reform. One non-resident foreign investor cannot reach 10 percent of a listed company shares. All foreign holders together cannot pass 49 percent. Convertible debt falls under the same caps.
- 10 percent: single non-resident foreign investor cap per issuer
- 49 percent: aggregate cap for all foreign investors
- No change: foreign strategic investors stay outside the limits
The exemptions are narrow. Foreign strategic investors sit outside both limits. Their criteria did not change. Holders based in Saudi Arabia skip the 10 percent test. They still count against the 49 percent cap. Gulf nationals are treated like Saudi investors under the framework.
What happened to swap arrangements?
The synthetic route is closing. The same reform abolished the equity swap framework. That route had given some offshore funds economic exposure to Saudi shares without direct ownership.
The direction is clear. The authority wants real owners on the register, not engineered exposure. Direct holdings give issuers a cleaner shareholder base and deeper price discovery.
Swap users lose the synthetic channel. The direct path replaces it end to end. The shift moves holdings onto the exchange register, where the caps sit in one place.
How big is the market offshore money can reach?
The Saudi Exchange was formed in 2007 and is the sole securities exchange in the kingdom. Its main market listed 239 companies as of October 2024. Market value passed $3 trillion in July 2024.
The exchange is state-owned. The Public Investment Fund, the Saudi sovereign wealth fund, holds the whole group. Nomu, a lighter parallel market, opened in February 2017 with easier listing rules and serves as an alternative listing platform. For related coverage, see Gulf sovereign wealth funds, explained.
The exchange keeps a public record of scale. Its share capital stands at 1.2 billion Saudi riyals, split into 120 million shares. The group sits under state ownership rather than member firms.
Conclusion: What changes next for foreign holders?
The practical agenda is operational. The caps are old. The access is new. Broker onboarding, custody and settlement remain the working path. The 10 and 49 percent caps still set the ceilings at each listed name. The next signal is liquidity. The authority expects deeper foreign flows, and the first post-reform quarters will show whether mid-sized funds arrive.
