Saudi Arabia leaves a personal share portfolio untaxed, so for residents the main costs of owning US companies are set in Washington: 30% withholding on dividends, with no treaty to reduce it, and US estate tax on larger holdings. Two questions specific to the Kingdom sit alongside those, namely who is allowed to sell you the shares and how zakat applies to them, and many investors add a third, whether the companies pass a Sharia screen. This page answers each with figures as of November 2026. Rules that apply in every country are in the guide to investing in US stocks from abroad. Saudi law and, for expatriates, home-country law decide the details, so take advice from a qualified tax professional before committing large sums.
Who may sell you US shares in Saudi Arabia?
Only Authorised Persons licensed by the Capital Market Authority, or exempt persons under its Securities Business Regulations, may carry on securities business in the Kingdom.
That covers more than dealing. The CMA lists managing portfolios with discretion, introducing clients, advising on the merits of a security and arranging deals, and says unauthorised persons may not collect money for any of them. It treats contracts that result from unlicensed securities business in the Kingdom as void, and asks investors to deal only with firms on its list of Authorised Persons. Some Authorised Persons give clients access to US exchanges, so the first check for any platform is that list, found on the CMA's own website rather than through a link from the firm.
A second route stays entirely in riyals. The Saudi Exchange's report for November 1, 2026 lists 14 exchange-traded funds, two of which hold US companies, one of them tracking a Sharia-screened MSCI index of US large and mid caps. Together the two held about SAR 42 million, so they are small: check the gap between the market price and net asset value, and the trading volume, before buying.
Opening an account with a firm abroad is the third route. The CMA's warnings are aimed at firms doing business in the Kingdom, but an account abroad leaves you outside CMA protection and under another country's regulator. Opening a US brokerage account as a nonresident covers what US brokers ask for.
How much US tax comes off Saudi dividends?
The full 30%: Saudi Arabia has no income tax treaty with the United States, so nothing reduces the default rate.
| Country | Tax treaty | Dividends (most investors) | Dividends (10%+ corporate owners) | Interest |
|---|---|---|---|---|
| Saudi Arabia | No | 30% | 30% | 30% |
The IRS default is 30% on US-source dividends, unless a tax treaty sets a lower rate. You still file Form W-8BEN so the broker records you as a non-US person, as the W-8BEN guide explains. Withholding applies to dividends from US-listed ETFs too, and a riyal-traded fund that owns US shares generally suffers it inside the fund, where it lowers returns without appearing on your statement. US tax normally leaves a nonresident's share gains alone, so low-yield holdings lose less of their return than high-yield ones. The withholding also settles the US side: Form 1040-NR is required from a nonresident with no US business only when some of the tax owed was not withheld, so a Saudi resident whose broker took the full 30% normally files nothing in the US. Ireland-domiciled funds face 15% instead, under the US-Ireland treaty, which is why many Gulf investors hold US indexes that way; US vs Irish-domiciled ETFs compares the two, and withholding by country shows where 30% sits among treaty rates.
On the Saudi side there is nothing further to pay. The Income Tax Law reaches a resident non-Saudi only on income from activity with its source in the Kingdom, and dividends from US companies and gains on their shares are sourced abroad. Saudi nationals fall under the zakat rules instead, covered in the next section.
Worked example: SAR 75,000 in a US-listed S&P 500 ETF
- SAR 75,000 converts to $20,000 at the official 3.75 riyals per dollar, before any bank margin.
- A 1.3% dividend yield pays $260 a year. The US withholds 30%, or $78, and $182 arrives.
- Saudi income tax on the $182: none for a personal portfolio.
- Through an Irish-domiciled fund on the same index, the US tax inside the fund would be about $39, leaving $221.
- At $20,000 the holding is below the $60,000 estate tax threshold, so no US estate tax would be due on it alone.
Is zakat due on US shares?
For a Muslim investor holding shares personally, zakat is a religious obligation rather than a state levy, because ZATCA collects it only from individuals with a licensed business activity.
Under the Implementing Regulation for Zakat Collection, which applies to financial years starting on or after January 1, 2024, a resident Saudi, or a GCC national treated as one, is a zakat payer only when practising an activity under a licence issued in the Kingdom. ZATCA's guideline says this makes a licensed activity a precondition for collection from a natural person. Shares held in your own name, outside any business, are therefore not part of what ZATCA collects, while a sole establishment owned by a Saudi and set up in the Kingdom is subject to the regulation in its own right.
The duty itself remains. ZATCA's Zakaty service lets individuals calculate and pay voluntarily: its detailed calculator covers cash, gold, silver and shares, and ZATCA says it handles Saudi and foreign stocks and investment funds, using daily closing prices. Zakat is generally a fortieth, or 2.5%, of zakatable wealth once it reaches the nisab, which ZATCA's guide for individuals sets at 85 grams of pure gold or 595 grams of silver. Scholars differ on how to value shares held for the long term rather than for trading, so the result can vary with the method; settle that with a scholar you trust, then let the calculator do the arithmetic. As an illustration only, if the full market value of a SAR 75,000 holding were treated as zakatable on your zakat date, a fortieth would be SAR 1,875, and methods that count only each company's zakatable assets can give a different figure.
Saudi and US rules side by side
This table shows the rules that apply to an individual resident in the Kingdom.
| Topic | What a Saudi resident faces | Who sets it |
|---|---|---|
| Withholding on US dividends | 30%, with no treaty reduction | US tax law and IRS treaty tables |
| US tax on selling shares | Normally none for a nonresident | US rules for nonresident aliens |
| US estate tax | Above $60,000 of US assets, up to 40%, after a $13,000 credit | IRS, Form 706-NA |
| Saudi income tax | None on a personal portfolio; non-Saudis are taxed only on activity sourced in the Kingdom | Income Tax Law, ZATCA |
| Zakat | Collected only where there is a licensed activity; otherwise a personal religious duty | Zakat collection regulation, ZATCA |
| Reporting | Form W-8BEN to the broker and, once 30% is withheld, no US return; no Saudi tax or zakat return for a personal portfolio held outside a licensed activity | IRS; ZATCA |
| Who may sell you securities | CMA Authorised Persons; contracts from unlicensed business are void | Capital Market Authority |
| Currency | Riyal pegged at 3.75 per dollar | Saudi Central Bank (SAMA) |
Are Sharia-screened US funds a separate option?
Yes: index providers publish Sharia-screened versions of US indexes, and the funds that track them form a distinct category with their own rules.
The S&P 500 Shariah index is one example. Its methodology removes companies in excluded businesses, including alcohol, tobacco, pork, gambling, conventional financial services and some media, then applies accounting screens to the rest. At the September 21, 2026 rebalance, S&P Dow Jones Indices changed those screens in line with the opinion of its Shariah Supervisory Board: debt must now be below 30% of a company's average market value over 36 months, down from 33%, and a new test caps cash and interest-bearing securities at 30% of the same measure. Across its screened universe the share of compliant stocks fell from 54.7% to 46.1%.
Other providers, such as MSCI, draw the lines differently, so two Sharia funds on US shares can hold different companies. Before choosing one, read which index it follows, who sits on its Sharia board and how it handles purification, the portion of income from non-permissible sources that investors are expected to give away; S&P publishes a dividend purification ratio for that purpose. Screening also tilts a portfolio toward companies with little debt, which can change its sector mix compared with the full index.
What happens to US holdings when a Saudi investor dies?
US shares and US-domiciled funds above $60,000 of US-situated assets become subject to US estate tax, because Saudi Arabia has no estate tax treaty with the US.
Rates climb to 40%, and the only relief is a credit of $13,000, which offsets the tax on the first $60,000 of US assets. The executor files Form 706-NA with the IRS within nine months, and a US broker will usually release nothing until a transfer certificate arrives, so heirs can wait months for assets they may need to settle the rest of the estate. Interests in non-US funds, such as Irish-domiciled ETFs or riyal-traded funds on the Saudi Exchange, are generally outside the tax.
Worked example: Estate tax on $200,000 of US shares
- US-situated assets at death: $200,000, or SAR 750,000 at the official rate.
- Tentative tax: $38,800 on the first $150,000 plus 32% of the next $50,000, which comes to $54,800.
- After the $13,000 credit, $41,800 is due, about 21% of the holding.
- Had the same exposure been held through an Irish-domiciled fund, US estate tax would generally be nil.
The guide to US estate tax for nonresidents covers the filing and the transfer certificate.
Does the riyal peg remove currency risk?
Mostly, for money you will spend in riyals: the riyal has been pegged at 3.75 per US dollar since June 1986.
In May 2020 SAMA called the peg a strategic choice and said it remained committed to the official rate of 3.75 as an anchor of monetary and financial stability. Today's mid-market quote is 1 USD = 3.7500 SAR (Nov 2, 2026). Two costs remain. Banks and brokers set their own conversion rates, so compare the rate you are offered with 3.75. A quote of 3.76 sounds close, yet on SAR 75,000 it delivers about $19,947 instead of $20,000, a cost of roughly SAR 200; exchange rate markups shows how such margins add up. And many residents of the Kingdom will spend their savings in another currency, such as rupees, pesos or pounds, where the dollar's moves count in full. The currency converter has those pairs, and currency risk in US assets discusses the problem.
Risks that matter for investors in the Kingdom
The risks below are the ones most specific to investing from Saudi Arabia.
- Unlicensed platforms. A firm that isn't an Authorised Person can't legally carry on securities business in the Kingdom, and a contract with it may be void; money transfer scams lists the warning signs.
- Estate tax and frozen accounts. Above $60,000, US-domiciled holdings can lose a large share to US estate tax and stay locked until the IRS signs off.
- Thin local funds. The riyal-traded US ETFs are small, so their prices can drift from net asset value and spreads can be wide.
- Screening changes. Sharia screens are revised from time to time, as in September 2026, and a fund may have to sell holdings that no longer pass.
- Concentration. US large caps are a single-country position; types of investment risk explains why spreading risk matters.
- Broker protection. Customers of a US broker-dealer have SIPC cover whatever their residence, within the limits explained in FDIC vs SIPC; a Saudi firm's arrangements differ, so ask.
Expatriates should also check whether their home country still treats them as tax resident, or taxes its citizens wherever they live; the guides for India and Pakistan cover two common cases.
Saudi rules, your home country's rules if you are an expatriate, and your own religious obligations all shape the right setup. A licensed adviser and a tax professional familiar with the Kingdom can confirm how they apply to you.