US expats in Saudi Arabia can invest locally, but US tax rules, foreign account reporting requirements, PFIC rules and brokerage restrictions can make some investments far more complicated than they appear.
Living in Saudi Arabia does not end a US citizen’s obligation to report worldwide investment income, and Saudi Arabia’s lack of personal income tax does not remove the potential US tax liability.
Key Takeaways
- US expats can access Saudi investments, but US tax and reporting rules still apply.
- Saudi-domiciled funds and ETFs may trigger complex PFIC rules.
- Saudi bank and investment accounts may require FBAR and Form 8938 reporting.
- US brokerage policies can restrict investment access after moving abroad.
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The information in this article is for general guidance only. It does not constitute financial, legal, or tax advice, and is not a recommendation or solicitation to invest. Some facts may have changed since the time of writing.
Can a US citizen invest in Saudi Arabia
Yes. A US citizen can invest in Saudi Arabia through a range of options, including listed securities, investment funds, sukuk, real estate and business interests, subject to the rules governing each type of investment.
Saudi Arabia has progressively opened its investment market to foreign investors.
Since February 1, 2026, foreign investors have been able to invest directly in Saudi Main Market shares without the previous Qualified Foreign Investor (QFI) qualification requirements.
Other investment routes have their own eligibility rules.
Saudi investment funds are governed by the Capital Market Authority's regulations, while real estate ownership by non-Saudis is now governed by a new framework that took effect on January 22, 2026.
The updated property regime allows non-Saudis to own real estate within designated geographical areas and, for legally resident non-Saudi individuals, permits ownership of a single property outside those areas as a residence, subject to specific restrictions.
The US investment rules affecting expats in Saudi Arabia
A US expat generally remains subject to US federal income tax on worldwide income, including investment income earned from Saudi Arabia.
This creates an unusual situation for Americans in Saudi Arabia.
A Saudi bank account, brokerage account or investment fund may be perfectly legitimate under Saudi law but still create obligations under US law.
The Foreign Earned Income Exclusion generally does not cover dividends, interest or capital gains, meaning Saudi Arabia’s lack of personal income tax does not remove the potential US tax liability on investment returns.
Separate reporting requirements may also apply to Saudi accounts and assets:
- Foreign account reporting: Certain foreign financial accounts must be reported through the FBAR when their combined value exceeds $10,000 at any point during the year. The FBAR is filed separately from the federal income tax return.
- Foreign asset reporting: Form 8938 may also apply once specified foreign financial assets exceed applicable thresholds.
Why Saudi mutual funds and ETFs can be problematic for US citizens
A Saudi-domiciled mutual fund or ETF can create PFIC exposure for a US citizen, potentially resulting in more complex US tax treatment and additional reporting.
Under US tax rules, a foreign corporation can be classified as a Passive Foreign Investment Company (PFIC) if it meets either the passive income or passive asset test.
A US person holding a PFIC may have to file Form 8621 in certain circumstances, including when receiving certain distributions, selling the investment at a gain, making certain elections or meeting the annual reporting requirement under Section 1298(f).
This is particularly relevant to Saudi-based investors because a fund's availability through a Saudi bank or investment platform does not determine its US tax treatment.
PFIC treatment can also produce less favorable tax consequences than those associated with comparable US-domiciled investments.
The rules can be particularly complex when no QEF or mark-to-market election is available or appropriate, potentially bringing the investment under the Section 1291 regime.
For this reason, US citizens should check the US tax classification and PFIC status of a Saudi-domiciled fund before investing.
Why some US brokerages restrict expats living in Saudi Arabia
US brokerages do restrict some accounts when customers move to Saudi Arabia, with restrictions typically arising when residency changes or when the brokerage does not offer the same services to residents abroad.
These restrictions reflect the additional regulatory, licensing, tax reporting and compliance requirements involved in servicing customers who reside outside the US.
FATCA, customer-identification and anti-money-laundering requirements can add to the compliance burden, although there is no blanket US rule requiring every brokerage to close an account when a US citizen moves overseas.
Fidelity states that customers who reside outside the US cannot open new Fidelity accounts and that existing customers who move abroad cannot purchase mutual funds.
It also notes that additional restrictions may apply depending on the country of residence.
Other firms take a different approach.
Charles Schwab, for example, has dedicated services for US expatriates and offers eligible clients living abroad access to US stocks, ETFs, bonds and other investments through its international brokerage platform.
Available accounts, products and services can vary according to the client’s country of residence.
Does Saudi Arabia have a tax treaty with the US?
Saudi Arabia does not have a comprehensive US income tax treaty of the type the US has with countries such as the UK or Canada.
This matters because a tax treaty can provide mechanisms for reducing or coordinating taxation between two countries.
Without a comprehensive treaty, Americans generally continue to deal with US taxation under domestic rules while also complying with Saudi regulations.
Because Saudi Arabia generally does not impose personal income tax on individuals, an American investor may also have limited Saudi tax available to claim as a foreign tax credit against the corresponding US liability.
Is investing in Saudi Arabia a good idea?
For US expats in Saudi Arabia, investing locally can make sense for gaining exposure to the Saudi economy and investing in the currency in which they earn and spend.
Saudi Arabia's lack of a general personal income tax can make the local investment environment appear attractive, but US citizens remain subject to US taxation on worldwide income.
The choice of investment also matters.
Direct holdings of Saudi securities, sukuk or qualifying real estate can have different US tax implications from Saudi-domiciled mutual funds or ETFs, which may create PFIC issues for US taxpayers.
For a US expat, the more relevant question is whether a particular Saudi investment provides suitable returns after considering US taxes, reporting requirements, fees, currency exposure and any restrictions imposed by the investment provider.
What are the best investment routes for US expats in Saudi Arabia?
US expats in Saudi Arabia can invest through US brokerage accounts, internationally available platforms, Saudi investment accounts or direct ownership of local assets.
The appropriate route is shaped not only by the investment itself, but also by whether the provider accepts US persons and whether the account can remain open after another international move.
- US brokerage accounts: An existing US or international expat brokerage account may provide access to individual shares, US-domiciled ETFs, US Treasury securities and corporate bonds. This route can reduce PFIC exposure, but the brokerage must permit clients resident in Saudi Arabia, and some firms restrict particular products or new purchases.
- FATCA-compatible international platforms: Certain international investment platforms accept US citizens and provide multi-currency or cross-border account access. Acceptance of US persons does not make every underlying investment US-tax-efficient, so the domicile and classification of each fund still need to be checked.
- Saudi brokerage accounts: A local account can provide direct access to eligible Saudi-listed shares, REITs, and other Tadawul-listed securities. Direct ownership of shares is different from investing through a Saudi-domiciled fund, although the US tax classification of the specific company and account reporting requirements still need review.
- Cash and fixed-term deposits: Saudi bank deposits can be useful for emergency funds, near-term spending or liabilities denominated in Saudi riyals. Interest or other returns may remain reportable and taxable in the US, and the account may count towards FBAR and Form 8938 thresholds.
- Sukuk and conventional fixed-income investments: These can provide income-oriented exposure to Saudi, regional or international issuers. US tax treatment can vary according to the sukuk’s legal structure, so it should not automatically be treated in the same way as a conventional bond.
- Direct real estate or business ownership: Eligible expats may obtain exposure outside public markets through qualifying Saudi property or private business interests. These routes involve separate ownership, valuation, tax and reporting considerations and are generally less liquid than listed investments.
Bottom Line
Investing in Saudi Arabia is not necessarily difficult for a US expat; investing efficiently across two regulatory systems is the harder part.
An investment that looks simple from a Saudi perspective can carry very different tax, reporting or administrative consequences once US rules are applied.
A product tied closely to local residency, banking access or Saudi-specific rules may become difficult to manage after departure.
Expats should therefore assess investments not only by expected returns, but also by how easily they can be transferred, liquidated, reported and integrated into a broader cross-border financial strategy.
FAQs
Can a US citizen live permanently in Saudi Arabia?
A US citizen can pursue long-term residence in Saudi Arabia through the Premium Residency system, but a US passport alone does not grant permanent residence rights.
Can a US citizen buy a home in Saudi Arabia?
Yes. US citizens can buy property in Saudi Arabia under the non-Saudi property ownership framework that took effect on January 22, 2026, subject to geographic and regulatory restrictions.
In which currency should Saudi investments be reported on a US tax return?
Saudi investment income and asset values generally need to be converted from Saudi riyals into US dollars for US tax and reporting purposes. The appropriate exchange rate can vary according to the form and transaction being reported.
Can a US expat hold Saudi investments through a non-US spouse?
A non-US spouse can generally own investments independently, but joint ownership, transfers between spouses and control over the assets may create separate US tax or reporting considerations.
Spousal ownership should not be used solely to bypass PFIC or disclosure rules without specialist advice.
Can US retirement accounts invest in Saudi assets?
Certain self-directed US retirement accounts may hold eligible foreign assets, but custodian restrictions, prohibited-transaction rules and valuation requirements can limit what is practical.
Holding an asset through a retirement account does not automatically make an otherwise restricted investment suitable.
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