ABOUT SAUDI ARABIA

 Amongst all the countries in Western Asia, Saudi Arabia, officially the Kingdom of Saudi Arabia, is the largest country on the Arabian Peninsula and the birthplace of Islam, home to its two holiest cities, Mecca and Medina. It is the world’s largest oil exporter and holds some of the largest proven crude oil reserves. As an absolute monarchy, Saudi Arabia is undergoing a massive economic and social transformation under its ambitious “Vision 2030,” aiming to diversify its economy away from oil, develop new industries, and enhance its global competitiveness. Riyadh is the capital and largest city, serving as the Kingdom’s political, economic, and cultural powerhouse. Jeddah is a major port city and commercial hub on the Red Sea. According to the World Bank, Saudi Arabia is classified as a High-Income Economy.

The currency of Saudi Arabia is the Saudi Riyal (SAR). As of today’s exchange rates (June 2025), 1 Saudi Riyal is approximately 22.81 Indian Rupees. The population of Saudi Arabia is estimated at approximately 37.1 million in 2024, comprising both Saudi nationals and a large expatriate workforce. Saudi Arabia shares land borders with Jordan, Iraq, Kuwait, Qatar, the United Arab Emirates, Oman, and Yemen. It has maritime borders across the Persian Gulf with Bahrain and Iran, and across the Red Sea with Egypt, Sudan, Eritrea, and Djibouti. The official language is Arabic. English is widely understood and spoken, particularly in business, healthcare, and among the expatriate community. Islam is the official religion, and Saudi Arabia is the custodian of the two holy mosques. Major international airports include King Khalid International Airport (RUH) in Riyadh, King Abdulaziz International Airport (JED) in Jeddah, and King Fahd International Airport (DMM) in Dammam. Its key commercial seaports are Jeddah Islamic Port, King Abdullah Port, King Abdulaziz Port (Dammam), and Jubail Commercial Port, which are crucial for trade and logistics.

The standard corporate income tax rate for non-Saudi companies operating in Saudi Arabia is 20% on their adjusted net profits. Saudi companies, and the Saudi share of mixed-ownership companies, are generally subject to Zakat, an Islamic assessment, typically at 2.5% of the Zakat base. The Ministry of Investment of Saudi Arabia (MISA), formerly the Saudi Arabian General Investment Authority (SAGIA), is the main government body responsible for attracting and facilitating foreign investment. MISA offers a range of incentives to licensed investment entities, which may include:

• Tax Incentives: Potential tax holidays and exemptions in certain Special Economic Zones (SEZs) or specific mega-projects (e.g., NEOM).
• Duty Exemptions: Exemption from customs duties on imported machinery, equipment, and raw materials for industrial projects.
• Loans and Financial Support: Access to financing and loans from the Saudi Industrial Development Fund (SIDF) and other government funds.
• Land Allocation: Subsidized or competitive land lease rates in industrial cities managed by MODON (Saudi Authority for Industrial Cities and Technology Zones).
• Workforce Support: Programs to develop local talent and support for hiring Saudi nationals.
• Sector-specific incentives: Tailored benefits for investments in high-priority sectors under Vision 2030. Opesh Group of companies will be helping you in completing the Due Diligence process which includes financial planning, registration process, business options, and if required, even helping you find a Rental property for your office.

Establishing a business in Saudi Arabia has become significantly easier due to continuous reforms under Vision 2030, aimed at improving the business environment and attracting foreign direct investment. Foreign investors can typically establish a Limited Liability Company (LLC), a Joint Stock Company, or a Branch Office. The Foreign Investment Law generally allows for 100% foreign ownership in most sectors, removing previous requirements for local partners in many industries. This liberalization, coupled with robust infrastructure and a clear roadmap for economic diversification, makes Saudi Arabia an increasingly attractive destination for global investors.

In case an investor is planning to establish an LLC or a corporate business setup in Saudi Arabia, Opesh Group will be helping you in taking the right decision for setting up your business in Saudi Arabia and we will also guide you about how to follow the procedure while formulating your company in Saudi Arabia.

Types of Business which can be started in Saudi Arabia (aligned with Vision 2030):

• Tourism & Entertainment: Driven by giga-projects like NEOM, The Red Sea Project, and Qiddiya, there are vast opportunities in hospitality, resorts, theme parks, and entertainment venues.
• Manufacturing: Focus on advanced manufacturing in sectors such as automotive, defense, pharmaceuticals, food processing, machinery, and specialty chemicals.
• Technology & Digital Economy: Investment in IT, AI, FinTech, cybersecurity, e-commerce, data centers, and smart city solutions.
• Renewable Energy: Ambitious projects in solar, wind, and green hydrogen production to achieve energy transition goals.
• Mining & Metals: Exploration and extraction of untapped mineral resources beyond hydrocarbons (e.g., gold, copper, phosphate, bauxite).
• Healthcare & Education: Development of world-class hospitals, medical facilities, and educational institutions to meet growing demands.
• Logistics & Transportation: Leveraging its strategic location to develop logistics hubs, expand ports, airports, and build a modern railway network.

Advantages of Starting Business in Saudi Arabia:

• Massive Public Investment: Vision 2030 and Public Investment Fund (PIF) projects offer unprecedented investment opportunities.
• Large Domestic Market: A growing population with high purchasing power.
• Strategic Location: Gateway to the Middle East, Africa, and Asia, with access to major trade routes.
• Attractive Incentives: Comprehensive support and tax benefits from MISA and other entities.
• Improving Business Environment: Significant reforms to streamline procedures and enhance ease of doing business.
• Abundant Energy Resources: Low-cost energy for industrial operations.
• Developing Workforce: Investment in human capital development and skill enhancement.

Imports & Exports: Saudi Arabia’s economy is heavily export-oriented, with crude oil dominating its export profile. Its imports are diverse, supporting its industrial growth, infrastructure development, and consumer demands.

Major items which are exported from Saudi Arabia:

• Crude Petroleum
• Refined Petroleum Products
• Petrochemicals (polymers, organic chemicals)
• Plastics
• Fertilizers
• Aluminum
• Dates

Major items which are imported in Saudi Arabia:

• Machinery and Mechanical Appliances
• Electrical Equipment
• Vehicles and Parts
• Chemicals and Related Products
• Food Products (cereals, dairy, meat)
• Prepared Foodstuffs
• Pharmaceutical Products
• Base Metals and Articles thereof

Major items traded between Saudi Arabia and India (as of 2023-2025 data):

• Exports from Saudi Arabia to India: Primarily Mineral Fuels (crude oil, refined petroleum products), Plastics and Articles thereof, Fertilizers, and Organic Chemicals.
• Imports in Saudi Arabia from India: Diverse range including Mineral Fuels and Oils (refined petroleum products), Vehicles and Parts, Cereals (especially Basmati rice), Boilers, Machinery and Mechanical Appliances, Electrical Equipment, Organic Chemicals, and Pharmaceuticals. Indian companies are increasingly active in IT, construction, and O&M services.

Manufacturing: Saudi Arabia’s manufacturing sector is a key pillar of its economic diversification strategy, rapidly expanding beyond its traditional strength in oil and gas. While petrochemicals and refined petroleum products remain dominant, significant investments are pouring into other areas:

• Petrochemicals: A global leader in producing basic and specialty petrochemicals, leveraging abundant feedstock.
• Refined Petroleum Products: Extensive refining capacity to produce various fuels and industrial inputs.
• Chemicals & Plastics: Manufacturing of a wide range of chemical products and various plastic articles.
• Basic Metals: Production of aluminum, steel, and other metals.
• Automotive: Development of a domestic automotive manufacturing industry, including electric vehicles.
• Defense Industries: Localization of defense manufacturing capabilities.
• Food Processing: Growing sector to enhance food security and local production of processed foods.
• Pharmaceuticals: Aiming to increase domestic production of medicines and medical devices. The government offers strong incentives to foster high-value-added manufacturing and attract international players.

Mining: Saudi Arabia possesses vast mineral resources beyond its enormous hydrocarbon wealth. While oil and natural gas extraction remain the bedrock of its economy, the Kingdom is aggressively developing its non-hydrocarbon mining sector as part of Vision 2030. Key minerals include:

• Gold & Copper: Significant deposits, particularly in the Arabian Shield region, with ongoing exploration and production.

• Phosphate: Large reserves, making Saudi Arabia a significant producer of phosphate fertilizers.

• Bauxite: Used in aluminum production.

• Industrial Minerals: Including silica, limestone, gypsum, and magnesite, used in construction and various industries.

• Silver and Zinc: Also present in commercially viable quantities. The government has introduced a new mining law and is actively seeking foreign investment and partnerships to explore and exploit these untapped mineral resources, aiming to establish mining as the “third pillar” of its economy after oil and petrochemicals.

• GDP = $1.11 trillion (nominal, 2024 est. IMF)

• GDP Growth = 1.5% (2024 forecast, IMF); 3.0% (2025 forecast, IMF) Note: Growth figures are influenced by OPEC+ oil production cuts and non-oil sector diversification efforts.

• Ease of doing business rank = The World Bank’s ‘Doing Business’ report has been discontinued. In its last edition (2020), Saudi Arabia ranked 62nd globally out of 190 economies, having made significant improvements by implementing reforms in eight areas, notably in starting a business, getting electricity, and protecting minority investors. The Kingdom continues to pursue aggressive reforms to enhance its business environment under Vision 2030.

• GDP per Capita = $32,149 (nominal, 2024 est. World Economics)

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