Saudi Arabia is experiencing an economic transformation at an unprecedented pace. As regulatory reforms and infrastructure developments continue to reshape the business landscape, international companies are increasingly exploring Saudi Arabia as a base for their regional and global operations.
If you’re considering business setup in Saudi Arabia in 2025, choosing the right city is one of the most strategic decisions you’ll make. Each region offers distinct advantages, be it offering access to logistics hubs, proximity to key industries, or the incentives provided by newly established Special Economic Zones (SEZs).
In this blog post, we explore the top cities for business setup in Saudi Arabia in 2025 and we also look at the specific advantages they offer to global businesses.
TOP CITIES FOR BUSINESS INCORPORATION IN THE KSA
1. Riyadh: The Economic and Administrative Capital
Riyadh is the undisputed economic powerhouse of Saudi Arabia. As the capital city, it houses key government institutions, financial regulators, and corporate headquarters.
With a rapidly growing population and strong urban infrastructure, Riyadh is also the epicenter of the Kingdom’s business, financial, and entertainment sectors.
The government’s Riyadh Headquarters Program, which mandates that multinational companies operating in the Kingdom must establish their regional headquarters in Riyadh by 2024 to qualify for public contracts, has driven a surge in corporate relocation.
As of 2024, 540 global companies had already moved their headquarters to Riyadh, surpassing the government’s target ahead of schedule. Key business districts in Riyadh include:
- King Abdullah Financial District (KAFD): Home to financial institutions and multinational firms such as Alstom, Roland Berger, and JLL, this high-tech business zone is central to Riyadh’s position as a regional financial hub.
- Olaya District: A blend of traditional and modern office environments, this district hosts firms like Ernst & Young and Huawei.
- Riyadh Business Gate: Features modern office space and high-end conference facilities, attracting major players like Pfizer.
In addition, Riyadh hosts two major SEZs: the Cloud Computing SEZ and the Riyadh Special Integrated Logistics Zone, both of which offer strategic advantages for companies in technology and logistics.
2. Jeddah: Saudi Arabia’s Commercial and Maritime Hub
Jeddah is a gateway to international trade. Located along the Red Sea, it is home to the country’s busiest port and is the primary logistics and shipping hub for imports and exports. Jeddah is particularly attractive for businesses in construction, logistics, trade, and tourism.
The city’s skyline is set to be transformed by the completion of Jeddah Tower, which will surpass one kilometer in height and become the tallest building in the world. This iconic project symbolizes the city’s ambition to compete on the global stage.
Jeddah also features the King Abdullah Economic City (KAEC), one of Saudi Arabia’s most advanced SEZs. It offers benefits such as low corporate tax, streamlined customs procedures, and logistics infrastructure designed to serve both local and global markets. Focus sectors in Jeddah and KAEC include:
- Advanced manufacturing
- Trade and logistics
- Construction and development
- Tourism and hospitality
KAEC alone has attracted SR18 billion in foreign investments and is home to firms such as Lucid Motors, which has established its manufacturing presence in the city.
3. Eastern Province: Energy and Industry at Scale
The Eastern Province includes key cities such as Dammam and Al Khobar. It is the heart of Saudi Arabia’s energy sector and the global base for Saudi Aramco, the world’s most valuable energy company. In addition to oil and gas, the region is also home to chemical, manufacturing, and maritime industries.
Dammam’s King Abdulaziz Port serves as the major seaport on the Arabian Gulf and is a logistics gateway for the region’s industrial exports. The area is also known for its strong network of industrial cities and specialized zones. Key SEZs in the Eastern Province include:
- Ras Al-Khair Special Economic Zone: A major center for shipbuilding and marine maintenance. It supports energy transport, rig manufacturing, and offshore services.
- Jazan Special Economic Zone (further south): Although not within Dammam, it serves the broader Eastern commercial corridor by enhancing trade with Africa and Asia.
The Eastern Province is ideal for energy-intensive industries and businesses that require access to both raw materials and export infrastructure.
Saudi Arabia’s Special Economic Zones (SEZs)
In 2023, Saudi Arabia introduced five major Special Economic Zones designed to attract multinational companies by offering highly competitive benefits. The five names are:
- King Abdullah Economic City (KAEC) – Jeddah
Focus: Manufacturing and logistics - Jazan SEZ – Jazan Province
Focus: Automotive, pharmaceuticals, consumer goods - Ras Al-Khair SEZ – Eastern Province
Focus: Shipbuilding, rig platforms - Cloud Computing SEZ – Riyadh
Focus: Data and AI services - Riyadh Special Integrated Logistics Zone (SILZ)
Focus: Warehousing, cold storage, global fulfillment
Across these SEZs, companies can benefit from:
- 5% corporate tax for up to 20 years
- 0% withholding tax on repatriated profits
- Full foreign ownership
- Exemption from customs duties on capital goods and raw materials
– Why go for Company Formation in Saudi Arabia in 2025?
Saudi Arabia is projected to be the second-fastest growing economy in the world by 2025, trailing only India. Its focus on innovation, private sector growth, and foreign investment has made it a global business magnet. Key reasons to invest in the Kingdom include:
- Transparent regulatory reforms
- A young, educated, and tech-savvy population
- Strong government backing for entrepreneurship and global investment
Choosing the right location is crucial for any business entering the Saudi Arabian market. Riyadh offers proximity to government and regulatory bodies and serves as a base for tech and finance. Jeddah is ideal for companies focused on trade, logistics, and tourism. The Eastern Province is unmatched in energy and industrial potential.
By aligning your business goals with the strengths of each city and leveraging the advantages of Saudi Arabia’s Special Economic Zones, your company can enjoy long-term success in one of the world’s most promising markets.