The law, approved by the Cabinet earlier this month and published in the official gazette Umm Al-Qura on Friday, will come into effect after 180 days.

Under the new law, foreign nationals, businesses, and non-profit entities will be granted permission to buy property or acquire rights like profitable use and long-term leases in specified zones. The Council of Ministers will decide on which zones foreigners can acquire ownership.

But property ownership in Madinah and Makkah is still restricted. Individual Muslim foreigners are the only ones who can apply to own real estate in these sacred cities under certain circumstances.

Resident foreigners with a legal status in the Kingdom are now allowed to own one residential property as a residence, as long as it s not in restricted areas such as Madinah or Makkah.

Foreign-invested enterprises and investment companies can also own property all over Saudi Arabia — including the holy cities — for employee housing or business operations.

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Foreign diplomatic missions and international organizations can also buy property for official purposes subject to approval by the Ministry of Foreign Affairs.

All foreign property purchases will be entered on the national property register, and sales will be liable for a transfer tax of up to 5%.

Violation of the new regulations would result in penalties of up to 10 million Saudi Riyals, and in some cases, property authorities could impose a mandatory sale of the property.

This new law supersedes the earlier foreign ownership act passed in 2000. Additional implementation guidelines are to be issued in six months.