On Monday, Saudi Arabia announced that foreign investors can now invest in Saudi-listed companies that own property in Mecca and Medina, the two holiest cities in Islam.

The decision, according to the Saudi Capital Market Authority, is aimed at stimulating investment, increasing the capital market's attractiveness and efficiency, and enhancing the kingdom’s regional and global competitiveness, all while supporting the local economy.

Under this new policy, foreign investment will be limited to shares in Saudi companies listed on the Saudi stock market, as well as convertible debt instruments. However, non-Saudi ownership in these companies will be capped at 49 percent.

As the largest economy in the Middle East and the world’s leading crude oil exporter, Saudi Arabia has long sought to diversify its economy. The kingdom has implemented numerous reforms focused on boosting tourism and attracting investment.

Mecca, which already hosts millions of Muslim pilgrims annually, is undergoing significant development aimed at accommodating 30 million visitors by 2030. One of the major initiatives, the Masar project funded by the Public Investment Fund, will add 40,000 new hotel rooms in the city.

The Hajj and Umrah pilgrimages brought in an estimated $12 billion in 2019.

While the move opens new investment opportunities, non-Muslims are still not permitted to enter the holy cities.

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