On January 22, 2026, Saudi Arabia's Council of Ministers approved Royal Decree M/14 — creating the first structured legal pathway for foreign Muslim investors to hold economic interests in Madinah real estate. This is what the decree says, what it permits, and what it does not.
For the global Muslim diaspora, the significance of this decree is difficult to overstate. Madinah — Al Madinah Al Munawwarah, the City of the Prophet ﷺ — has been the spiritual centre of Islam since the Hijra of 622 CE. For Muslims in the United Kingdom, the United States, Canada, Singapore, and across the world, the idea of holding a legal economic stake in land adjacent to Al-Masjid an-Nabawi would, until very recently, have been legally impossible.
Royal Decree M/14 changed that. But the specifics matter enormously — both for understanding what the decree actually permits and for evaluating investment vehicles that claim to be structured under it.
Date enacted: January 22, 2026
Issuing authority: Council of Ministers of the Kingdom of Saudi Arabia
Regulatory oversight: Saudi Capital Market Authority (CMA)
Scope: Real estate investment in Madinah by foreign Muslim investors through approved structures
Registration: Saudi National Real Estate Registry (RER) — blockchain-anchored title verification
What Royal Decree M/14 Actually Says
The decree operates within Saudi Arabia's broader framework for foreign investment, adding a specific carve-out for Muslim investors seeking access to Madinah real estate. It does not create an open market for any foreigner to purchase Madinah property. It creates structured pathways for foreign Muslim capital to participate in approved vehicles holding Madinah real estate assets.
Three pathways are established:
Pathway 1: CMA-Licensed Investment Funds
A fund regulated by the Saudi Capital Market Authority may accept capital from foreign Muslim investors and deploy it into Madinah real estate assets held through a Saudi special purpose entity. The fund must be CMA-licensed, the SPE must hold registered title on the Saudi National Real Estate Registry, and the investment structure must be approved by the CMA before foreign capital is accepted.
This is the most accessible pathway for individual investors. It allows participation from a minimum ticket size appropriate to individual investors rather than institutional capital, provides regulatory oversight through the CMA, and enables the investment to be Shariah-certified through AAOIFI's standards.
Pathway 2: Saudi-Incorporated Special Purpose Vehicles
Foreign Muslim investors — typically institutional or high-net-worth — can co-invest in or establish Saudi SPEs specifically structured to hold Madinah real estate. The SPE must be incorporated under Saudi law, registered with the relevant Saudi authorities, and hold CMA approval for any fundraising activity. Direct participation in an SPE requires more substantial capital and greater legal structuring complexity than a fund investment.
Pathway 3: Listed Company Exposure
Certain companies listed on the Saudi Tadawul exchange with Madinah real estate assets may be accessible to foreign investors through international brokerage platforms. This provides exposure to the Madinah market through public equity rather than direct real estate investment. The Shariah compliance of the listed company as a whole — not just its Madinah assets — must be evaluated separately.
"The decree does not open a free market in Madinah real estate. It creates structured, regulated pathways. The distinction matters — and any investment vehicle claiming Madinah exposure should be evaluated against these specific pathways."
What the Decree Permits
- Foreign Muslim investment in CMA-licensed funds with Madinah real estate assets
- Foreign Muslim participation in Saudi SPEs holding Madinah property with registered title
- Blockchain-anchored title verification through the Saudi National Real Estate Registry
- Secondary market trading of fund tokens or units via CMA-licensed exchanges (from Year 2 of fund operation)
- Income distribution from fund assets to foreign Muslim investors
What the Decree Does Not Permit
- Direct freehold ownership by non-Saudi nationals in the restricted zones immediately surrounding Al-Masjid an-Nabawi
- Investment by non-Muslims in the specifically designated Madinah zones covered by the decree
- Unlicensed or unregistered vehicles claiming Madinah exposure without CMA approval
- Conventional debt-financed structures (incompatible with Shariah requirements regardless of decree provisions)
How Saudi SPE Structures Work
The Saudi SPE (Special Purpose Entity) is the legal vehicle through which the actual real estate title is held. Understanding how it works is important for any investor evaluating a Madinah-focused fund.
The SPE is incorporated under Saudi law — typically as a closed joint-stock company or a limited liability company. It holds registered title to the real estate asset on the Saudi National Real Estate Registry. This registration is now blockchain-anchored, meaning the ownership record is tamper-resistant and independently verifiable.
Investors do not hold title to the real estate directly. They hold units or tokens representing economic rights in the SPE — the right to income distributions, the right to a share of the eventual realised value of the asset, and the right to transfer those economic rights to another investor through the secondary market.
This structure is what makes the investment both legally compliant under M/14 and practically accessible to foreign investors. The title stays in Saudi hands — the SPE — while the economic benefits flow to international investors through a regulated, CMA-approved framework.
The Role of the Saudi National Real Estate Registry
The Saudi National Real Estate Registry (RER) is the authoritative record of real estate title in the Kingdom. Since 2023, the RER has been integrating blockchain technology to anchor property records — making them immutable, transparent, and independently verifiable.
For investors in Madinah real estate funds structured under M/14, blockchain anchoring on the RER provides an important additional layer of protection. The underlying asset's title is not simply a claim made by the fund manager — it is a recorded fact on a sovereign registry that can be independently verified.
This is meaningfully different from many alternative investment structures, where the investor's claim to an underlying asset relies entirely on contractual promises by the fund manager. RER anchoring removes that dependency for the title itself.
The Shariah Compliance Requirement
Royal Decree M/14 does not mandate Shariah compliance for all structures it enables. However, for the Muslim investors it is designed to serve, Shariah compliance is not optional — it is the entire point.
The standard against which Madinah investment structures should be evaluated is AAOIFI — the Accounting and Auditing Organisation for Islamic Financial Institutions. AAOIFI Standard 17 covers Sukuk structures, which are the primary instrument used in Shariah-compliant real estate investment funds.
A Sukuk Al-Intifa' structure — usufruct Sukuk — is particularly appropriate for real estate with an income-generating use. The token or unit represents the investor's right to a share of the usufruct (use and benefit) of the asset, not ownership of the asset itself. Income is generated through the asset's commercial operation — in the case of Beit Al Madinah, a longevity hotel and wellness resort — rather than through interest payments.
Ask for: AAOIFI certification (specifically Standard 17 for Sukuk structures)
Ask for: Named Shariah Supervisory Board scholars
Ask: Does the fund use any debt financing? (Answer must be no)
Ask: What does the token/unit represent? (Must be economic rights in an asset, not a loan)
Verify: CMA license number at cma.org.sa
Verify: Title registered on Saudi National Real Estate Registry
The First-Mover Window
Royal Decree M/14 is four months old at the time of writing. The number of CMA-licensed funds offering foreign Muslim investors genuine Madinah exposure is very small. The regulatory framework exists; the investment vehicles are only now being established.
This window will close — not because the decree will be reversed, but because supply of prime Madinah positions is finite. The land adjacent to Al-Masjid an-Nabawi is fixed in quantity. As more capital recognises the opportunity and more funds are established, the premium positions will be taken and the entry economics will change.
Investors who evaluate the opportunity now, understand the regulatory framework clearly, and make considered decisions before the market matures are in a structurally different position from those who wait.
How Beit Al Madinah Is Structured Under M/14
Beit Al Madinah is Hijra Capital's Fund One — a tokenised real estate fund structured specifically under Royal Decree M/14 and regulated by the Saudi CMA.
The underlying asset is a private palace compound adjacent to Al-Masjid an-Nabawi, being developed into a premium longevity hotel and wellness destination. The property encompasses an existing palace on 1.6 hectares, 8.5km north of Al-Masjid an-Nabawi, with views toward Mount Uhud. Title is held in a Saudi SPE with ownership anchored on the Saudi National Real Estate Registry blockchain. The fund is AAOIFI Standard 17 certified, zero leverage, and CMA-licensed.
3,200 tokens are available at $30,000 per token. The fund term is 20 years, with secondary market liquidity via a CMA-licensed exchange from Year 2.
REVIEW THE BEIT AL MADINAH STRUCTURE
The full investor documentation — including CMA licensing details, AAOIFI certification, SPE structure, and title registration — is available at hijracapitalfund.com.
VIEW INVESTOR OVERVIEWThis article is for informational purposes only. It does not constitute legal or investment advice. The regulatory information contained herein reflects our understanding of Royal Decree M/14 as of May 2026 — investors should seek independent legal advice regarding the application of Saudi regulatory requirements to their specific circumstances. This article does not constitute an offer to sell or a solicitation of an offer to buy any security.