KSA enacts new law to enhance and boost real estate development
Real Estate Shareholding, in accordance to the provisions of the new law (Royal Decree No. (D/203) of 1444 A.H.), comprises a group of people participating in one (or more) real estate development project in return of a joint ownership for each participant.
The development project can be for residential, commercial, industrial, and/or agricultural purposes. This excludes, though, investment funds.
Below are key principles of the law:
- First, obtaining a permit to form a Real Estate Shareholding (RES) is a must. The permit is issued by the Real Estate General Authority.
- Second, the RES formed will have it own legal personality once the permit is issued.
- Third, an escrow account must be opened with on the licensed banks for this purpose.
- Fourth, the RES's capital shall be divided into equal shares with equal rights.
- Fifth, the RES shares can be listed subject to approval by the Capital Market Authority.
- Sixth, the Real Estate General Authority is expected to issue the executive regulations of the Law within (120) days of its issuance.
Finally, the new Law comes into effect on 19 November 2023 AD.
Nadim Al Jisr joined Thomson Reuters in 2014 as a Content Specialist, then moved to oversee the Westlaw Middle East platform and manage its growth. Nadim holds a Bachelor’s Degree in Law and has more than 10 years of experience as a legal consultant and litigator in Lebanon, Saudi Arabia and UAE. Nadim is native Arabic speaker and proficient in English and French. Nadim is currently completing his Master’s Degree in Law. Nadim is currently the Editorial Lead heading the MENA Content Team.