How to Set Up a Foreign Business From Asia in Saudi Arabia: Benefits and Essentials

Expanding and setting up a foreign business from Asia in Saudi Arabia is largely viewed as a strategic advantage, unlocking immense opportunities and preferential access to regional and global markets.

The powerful economic corridor between Saudi Arabia and Asian counterparts such as China and Japan has fueled a consistent growth in Asian company formation and incorporation in Saudi Arabia.

In this article, we shed light on the benefits of operating in the Kingdom and the must-have essentials to achieve a successful Asian commercial registration in Saudi Arabia.

Chinese Investors Accelerate Business Setup in Saudi Arabia’s Most Strategic Sectors

Saudi Arabia has long solidified its position as China’s largest trading partner in the Middle East, with bilateral trade reaching $107.23 billion in 2023.

This relationship has paved the way for Chinese firms and investors to make significant investments in infrastructure, energy, and IT in the Kingdom. 

In fact, China’s total investment in infrastructure projects in Saudi totalled $31.45 billion between 2016 and 2024.

Giga projects are one notable area that attracts Chinese companies expanding to Saudi Arabia. Among these is the China State Construction Engineering Corporation (CSCEC), the world’s largest construction firm, which secured a contract of over $2 billion to develop a mixed-use district north of the $62.2 billion Diriyah Gate Giga project. The Chinese giant was one of the global construction firms that recently won the contract award for the Diriyah Royal Opera House.

Meanwhile, CSEC’s compatriot, China Harbour Engineering Co., was also awarded a $202 million contract for bulk excavation in the second phase of Diriyah. 

Moreover, CSEC is set to build 20,000 new homes across the Kingdom, as part of its partnership with the National Housing Company (NHC). This directly aligns with the Kingdom’s $67 billion housing development initiative that aims to deliver 300,000 residential units by 2025.

In the financial sector, the PIF has deepened its ties with key Chinese institutions, signing six MoUs worth up to $50 billion. The agreements, conducted back in August, aim to encourage two-way capital flows through both debt and equity. 

China’s presence in the IT sector is expanding rapidly. During LEAP 2025, Lenovo announced a partnership with PIF-owned Alat to establish an advanced manufacturing hub, alongside plans to set up its regional headquarters (RHQ) in the Kingdom. Chinese tech giant Tencent announced during LEAP that Tencent Cloud would begin operations in Saudi Arabia this year with an initial investment of $150 million.

Markedly, Chinese energy companies JinkoSolar, TCL Zhonghuan, and Sungrow found an open field for their operations in the Kingdom, actively contributing to the procurement, manufacturing and production of renewable energy.

Company Formation of Japanese Firms Surging in Saudi Arabia

Over the past decade, the number of Japanese firms that set up in Saudi Arabia has more than doubled. As of mid-2023, over 110 Japanese firms operate in Saudi, with 50 establishments currently headquartered in the Kingdom.

These figures signal deepening cooperation and expanding investment opportunities for Japanese firms in Saudi’s most strategic sectors, namely IT, energy and construction.

Major among these is Marubeni, which is cementing its footprint in Saudi Arabia’s energy sector, through a deal with the Saudi Power Procurement Company to establish two major wind energy projects. 

The marked uptick in Japanese investments in Saudi is largely facilitated through initiatives like the Saudi-Japanese Vision 2030. In fact, the number of projects signed under this vision has increased from 31 to 81 between 2017 and 2020. 

The forum continues to expand its reach and impact as a crucial catalyst for more strategic partnerships. In May of last year, over 30 MoUs were signed during the Saudi-Japan Vision 2030 business forum, reflecting a significant increase in collaborative ventures.

Fast forward to January 2025, during a high-level roundtable meeting, Saudi and Japan have formalized 13 MOUs. These span diverse areas such as healthcare, infrastructure, logistics, clean energy, financial services, critical minerals, and e-sports.

One of these notable MOUs was signed between the Saudi Investment Promotion Authority (SIPA) and Japan’s Mizuho Bank. This expanding collaboration aims to support Japanese companies seeking to expand and invest in Saudi Arabia, facilitating their entry to the market.

Guide to Company Formation in Saudi Arabia: Overview of Necessary Steps

To start a business in Saudi Arabia, companies must first collect the necessary foundational documents, such as a certificate of incorporation, the memorandum of association (MoA), and articles of association (AoA), as well as an audited financial statement.

Following this, it is mandatory to register with more than 10 ministries and governmental entities, marking the completion of the second stage of the market entry roadmap. Getting a national address and picking a suitable office space is considered crucial at this stage.

In the soft landing phase, businesses must issue the general manager’s Iqama and complete registrations on key government portals, including Muqeem, Absher, Qiwa, and Mudad. To finalize this process, companies must have an active bank account. 

The last steps include hiring staff in adherence with the Saudization (Nitaqat) quota, issuing visas for non-Saudi employees, and implementing their legal due diligence as part of the post-setup stage. 

Companies might need assistance from third-party service providers who can significantly support companies’ critical business functions, such as accounting, HR and payroll management.

Frequently Asked Questions About Setting Up a Foreign Business from Asia in Saudi Arabia

1. What industries offer the best opportunities for Asian companies to set up in Saudi Arabia?

The most sought-after sectors for Asian businesses looking to set up and expand to Saudi Arabia include IT, renewable energy, construction, tourism and financial services.

2. Are there government incentives for Asian investors in Saudi Arabia?

Saudi Arabia offers 100% foreign ownership across multiple sectors.

Besides, the Saudi government offers tax exemptions on new projects in sectors such as petrochemicals, technology, research and development, and tourism, as well as those that target less developed regions. 

Foreign companies with RHQs benefit from tax breaks stretching over 30 years as well as relaxed Saudization regulations. 

3. What are the key regulatory considerations for setting up a business from Asia to Saudi?

Foreign companies must first obtain a MISA license to establish their legal entity. Then, they must acquire commercial registration (CR) to validate the business’s operating status. Registrations with governmental portals will be mandatory for a foreign company to get fully operational. Teaming up with AstroLabs can significantly make the entry process streamlined and more seamless. AstroLabs’ clients can get operational in a span of 3 months. 

The market entry process of a foreign company formation in Saudi ends with issuing a GM iqama and opening a corporate bank account. A full breakdown of the entire process can be accessed here.

4. Which Asian countries have the strongest economic ties with Saudi Arabia?

China leads with $107 billion in trade, followed by India, Japan, and South Korea, Singapore and Hong Kong.

5. How does Saudi Arabia compare to other expansion markets in the Gulf?

Saudi Arabia is the region’s largest economy ($1.1 trillion GDP). It has a substantial consumer market of 36 million people, making it the largest consumer market in the Gulf. Saudi Arabia continuously offers tax exemptions and incentives to attract foreign investors, making it an ideal expansion destination for high-growth corporations.

The Kingdom has so far hosted 600 multinational corporations (MNCs) with RHQs, indicating robust market conditions driven by domestic flows and private sector growth.