Top Cities for Business Setup in Saudi Arabia in 2025

KSA has become a global business and investment hub since last couple of years. It has opened new door of opportunities for foreign investors with reduced legal hurdles, business friendly policies, tax relaxation and incentives. This makes the Kingdom top choice for entrepreneurs from around the globe, facilitated by the ability to retain 100% of foreign ownership. The country is projected to be the world’s second-fastest growing economy, surpassed only by India.

If you are also looking for business setup in Saudi Arabia, choosing the right city is mandatory. By carefully picking the optimal commercial region and capitalizing on its unique strengths, companies can tap into significant opportunities and drive Saudi Arabia’s growth in 2025 and beyond. Each city comes with its own unique and remarkable benefits, serving different industries and business needs.

This blog will explore the top cities in Saudi Arabia for business setup in 2025 and what makes them a noteworthy location for entrepreneurs and investors.

1.   Riyadh: The Economic Powerhouse

Riyadh is the capital and one of the fastest growing cities of Saudi Arabia. It is an economic and financial center and home to major government institutions, multinational corporations, and financial hubs, making a top-notch choice for entrepreneurs. The city hosts numerous multinational companies and offers outstanding infrastructure for both domestic and global business setup. From finance to technology and real estate, Riyadh got it all. Technology and FinTech, real state, Retail and E-commerce, healthcare and financial services are some of the widely chosen business options in Riyadh.

Major Benefits:

• Riyadh has the Saudi Stock Exchange (Tadawul) with many international banks making it a perfect choice for financial businesses and technology startups
• Real estate businesses can also gain the benefits because of the highly advanced infrastructure of Riyadh with many prime locations such as King Salman Park, Riyadh Metro, and the Diriyah Gate Project.
• Initiatives like Riyadh Tech Valley makes it an attractive location for investments for tech business.

2.   Jeddah: The Gateway to International Trade

Jeddah being situated at the shore of the Red Sea is considered as a commercial hub of KSA. It plays a central role in international trade businesses because one of the most advanced ports in the world. Top choices for business in Jeddah are Supply Chain Management, hospitality, retail and manufacturing business.

Major Benefits:

• Since it is interconnected to Makkah and Medina it attracts millions of visitors from around the globe which lifts the tourism, retail and hospitality industry.
• A thriving startup ecosystem with various incubators and accelerators, including King Abdullah Economic City (KAEC).
• This mega project includes the Jeddah Tower, set to be the world’s tallest building, makes it a prime attraction for global investors.

3.   Dammam: The Industrial and Energy Hub

Dammam is situated in the Arabian Gulf Region makes it a leading region in energy related businesses. It is the heart of Saudi Arabia’s oil and gas industry and a major industrial hub. Best industries for Business setup in Dammam include Oil and gas, manufacturing of industrial materials, construction and renewable Energy Solutions.

Major Benefits:

• The world’s largest oil company Aramco is located in Dammam which gives major opportunities in energy sector.
• Dammam encourages imports and exports businesses facilitated by King Abdulaziz Port.
• Its connection to Bahrain, UAE, and other Gulf markets, making it a primary location for regional businesses.

4.   Makkah: The Religious Tourism Capital

Being the holiest city in Islam, it brings in millions of pilgrims annually, this makes a superior location for religious tourism and hospitality. However, only Muslims can conduct businesses in Makkah. Top choice of businesses in Makkah are hospitality, tourism, real estate, transportation and travel services.

Major Benefits:

• Due to high surge of Umrah and Hajj Pilgrims, transport, hotels and restaurants services are highly demanded in Makkah
• The increasing number of visitors each years makes it a top-tier location for commercial and residential properties.
• The Saudi government is investing in AI and digital solutions to improve the pilgrimage experience. Which makes it a key location for investment in technology.

5.   Madinah: The Emerging Investment Destination

Madinah is the top second religious center in the KSA, like Makkah it also attracts investments in tourism, infrastructure, and technology. Religious Tourism, retail, ecommerce and health care are some major chosen options for Business setup in Saudi Arabia.

Major Benefits:

• Millions of pilgrims visit the Prophet’s Mosque each year, positioning it as a preferred choice for hospitality industry and tourism sector.
• The government initiative Madinah Knowledge Economic City (KEC) encourages education and technology sectors.
• The industrial sector is also diversifying and new industrial zones support SMEs and startups in various areas.

6.   Al-Khobar: The Business and Commercial Hub

Al-Khobar being part of Dammam metropolitan area, is a flourishing business and commercial center. Al Khobar boasts a scenic coastline, provides a strong potential for hospitality, real estate, and retail enterprises.

Major Benefits:

• Accommodating Many multinational companies, and commercial centers makes Al-Khobar a corporate hub.
• Al-Khobar is the central region for energy investments such as oil and gas. Many prime power sectors are already operating in the region.
• The rapidly growing population creates a thriving investment opportunity in the retail and hospitality sector.

7.   NEOM: The Futuristic Smart City

The under development NEOM city in Saudi Arab is a groundbreaking endeavor. It’s a modern-day project which aims to build a tech-savvy and innovative land. The most promising industries to put money in NEOM are AI, Technology, Renewable Energy, Biotechnology, Smart Infrastructure and IoT.

Major Benefits:

• The goal of NEOM is to be a pioneer in AI, robotics, and biotech industries.
• NEOM city will be completely dependent on renewable energy sources, offering opportunities in clean energy businesses.
• NEOM is expected to have its separate regulatory framework, increasing its desirability for investors.

Legal Considerations for Businesses Setup in Saudi Arab

Business setup in Saudi Arabia demands a thorough understanding of legal and regulatory frameworks to seamlessly align the enterprise creation process. Each city comes with its own assortment of legal laws that businesses must adhere to avoid any legal actions. These sets of rules highly impact the process of business registration, business operations and management. From covering necessary licenses and permits to ensuring full compliance with local laws these legal structures cannot be overlooked.

To productively navigate this process, it is highly preferred to gain a local professional help. Such as many tax compliance companies offer tax related help and several legal consultants help with the specific regulations in your chosen city. Furthermore, Government resources and official channels offer valuable information on available incentives, tax policies, and support programs tailored for small businesses. With a structured planning and emphasize on compliance, businesses can avoid unnecessary obstacles, protect investments, and get the offered benefits and support from authorities. With an in-depth research, comprehensive understanding of legal laws and hiring local consultants, enterprises can build a resilient base for sustained success.

SS&CO KSA has been expertly working as a leading local firm to help local and foreign entrepreneurs for business setup in Saudi Arabia. We offer tailored services and compliance with the city-specific rules and regulations. We further communicate with entrepreneurs about the pros and cons of each city and help them wisely choose the most rewarding business destination. This accelerates their expansion with the Kingdom’s rapid growth, strong government support, and expanding global influence.