Developing a Real Estate Project in Saudi Arabia as a Foreign Developer

The stages a foreign developer moves through in Saudi Arabia: site, design and permits, Wafi licensing for off-plan sales, contractor selection, construction and handover.

A foreign developer in Saudi Arabia works through three regulated tracks at once: ownership and corporate eligibility, building permits from the municipality, and REGA's framework for the sale of units, including the Wafi programme for off-plan sales with escrow. On top of those sits a delivery track with contractors and supervising engineers. The developers who struggle are usually those who plan the delivery track in detail and discover the regulated tracks late.

Before stage one

Before committing to a site, the developer needs a local structure that can own land, contract, borrow and sell, and a team that has taken projects through Saudi approvals before.

• A Saudi entity or eligible structure able to own land and sell units.
• A development brief and feasibility with a realistic programme.
• A funding plan covering the period before any sales income.
• A local design and permitting partner with Saudi experience.
• An understanding of what REGA requires to market units before completion.

Stage 1: Secure the site and feasibility

Acquire or control the land with planning and technical checks complete, and finalise a feasibility based on buildable area, sales or rental assumptions and a construction estimate from Saudi cost data.

• Deliverable: Controlled site and approved feasibility.
• Owner: Developer.
• Approval gate: Board approval on the feasibility, with contingency.

Stage 2: Design to Saudi requirements

Develop the design to the Saudi Building Code, municipal requirements and civil defence standards. Consider energy performance and, where you aim for it, a Mostadam rating from the start rather than as an add-on.

• Deliverable: Permit-ready design package.
• Owner: Architect and engineers.
• Approval gate: Design reviewed against code and local requirements.

Stage 3: Obtain building permits

Submit for the building permit through the municipal system, respond to comments and obtain any utility and civil defence approvals needed before construction.

• Deliverable: Issued building permit and related approvals.
• Owner: Design consultant with the developer.
• Approval gate: No site work beyond enabling works before the permit.

Stage 4: License off-plan sales if planned

If you intend to sell before completion, apply through the Wafi programme, which licenses the project and requires an escrow account for buyer payments released against construction progress. Plan cash flow on the basis that sales money is not freely available.

• Deliverable: Wafi licence and escrow arrangements, or a decision to sell on completion.
• Owner: Developer with its adviser.
• Approval gate: No marketing of off-plan units before the licence.

Stage 5: Procure the contractor

Tender to licensed contractors with the right classification and a record on similar work. Choose a contract form deliberately, and appoint an independent supervising engineer.

• Deliverable: Signed construction contract and supervision appointment.
• Owner: Developer and cost consultant.
• Approval gate: Contractor capacity and cash position checked, not just price.

Stage 6: Build and supervise

Run the programme with regular progress, quality and safety reporting. Where Wafi applies, progress certificates also drive escrow releases, so documentation must be complete.

• Deliverable: Monthly reports, certified progress and quality records.
• Owner: Contractor under supervision.
• Approval gate: Payments only against certified work.

Stage 7: Complete, hand over and set up the association

Obtain completion approvals, snag and hand over units, register unit titles to buyers and set up the owners' association and building management.

• Deliverable: Completion certificates, registered unit titles and an operating association.
• Owner: Developer with property manager.
• Approval gate: Defects list closed or scheduled before final handover.

Handovers between stages

The riskiest handoff is from design to procurement. Incomplete drawings produce low tenders that are recovered through variations later. Complete the design to a level the contractor can price properly, even if it delays the tender by weeks.

How you know it is finished

The project is done when every unit is completed, handed over and registered, the escrow is closed where it applied, the owners' association is operating, and the defects period is managed with a clear record.

Domira works with foreign investors on the property side of entering Saudi Arabia: finding land or premises, due diligence, design, construction and asset management. For licensing, tax and legal steps, work with a licensed adviser; we coordinate with yours so the property decision fits the structure you choose.