The Kingdom of Saudi Arabia is open for business.

As one of the world's most-restricted stock markets becomes open to foreigners, investors are clamoring .

The Tadawul stock exchange – valued at $585 billion with 170 companies listed – is the biggest in the Arab world, worth more than all the bourses in the GCC combined.

Many believe the ban on direct investments by foreigners is being softened as KSA moves to reduce its reliance on oil income, which accounts for 90 percent of government revenue. The UAE has sought to make foreign direct investment easier earlier this year as well.

Prior to this move, foreign investors could only access Saudi Arabia's market through exchange-traded funds, which was costly and complicated. The kingdom hopes that companies will now be able to raise money directly from foreign investors more easily.

However, there are still many limitations to how foreign investors can enter KSA. In an effort to reduce the volatility of the market, only institutional investors who have been in operation for over 5 years and manage over $5 billion in assets can enter the market. Which means that the kingdom is only interested in big, big investors.

There are additional restrictions including that qualified foreign investors cannot own more than 5 percent of the shares of any company. All foreign investors are capped at owning 20 percent of the shares in the entire stock exchange as well.

Foreign investors are allowed to vote in general assembly meetings and nominate representatives to boards of directors, a move that the kingdom's stock market regulator, the Capital Markets Authority, says will improve corporate governance. However, with small investment caps, it remains to be seen how much influence foreign investors can have on corporate governance.

Six companies will be completely off limits to foreign investors, five of which have real estate in Mecca and/or Medina. Non-Muslims are barred from entering those cities.

How this will affect the stock markets of the other GCC countries remains to be seen, as some analysts think that foreign investors will re-allocate investments from oil-rich countries such as Kuwait, UAE or Oman into Saudi Arabia's Tadawul.