Over the years, the number of firms expanding their business from Europe to Saudi Arabia has markedly increased. With a market value exceeding $1 trillion, Saudi Arabia has long been a sought-after expansion destination for high-impact European enterprises in countries like Germany, France, Italy, and Spain.
Combining a strategic location with a pro-business environment and attractive corporate taxes, Saudi Arabia presents a wealth of opportunities for European businesses, with Vision 2030 supporting the narrative of why the Kingdom remains one of the best places to do business globally.
Businesses Setting up from Germany in Saudi Targeting Energy and IT Sector
Saudi Arabia remains one of the most attractive hubs for German firms and investors, with many increasingly eyeing Riyadh as the prime location for their regional headquarters (RHQs).
Earlier this year, the leading healthcare and medical device company, B.Braun announced the establishment of its RHQ in Riyadh, joining compatriots like Wilo Group, a global leader in pump systems, and TÜV Rheinland, a leading provider of testing and inspection services.
These companies went for this strategic move as a means to strengthen their market position, secure governmental contracts, and gain access to generous incentives.
Saudi Arabia’s diversification push and industrial localization strategy have served as a key draw for German investors.
Take Siemens as an example. Siemens is considered among the top German investors in Saudi Arabia and a leading provider of advanced technologies in energy.
In March 2025, Siemens Energy secured a $1.6 billion contract to supply gas-fired power technology, contributing to energy transformation with new plants in the western and central regions of Saudi Arabia.
This project builds on Siemens’ track record of delivering transformative projects supporting the country’s energy transition and local manufacturing and production of renewable energy.
Moreover, German electrolyzer manufacturer Thyssenkrupp is one of the key participants in the 2.2 GW Neom green hydrogen and ammonia project, significantly contributing to economic growth and environmental sustainability.
Meanwhile, in automotive, BMW has been ramping up investments and expanding its service network and dealership in Saudi Arabia, ensuring comprehensive coverage and nationwide distribution. It has recently been licensed as the technology provider of Ceer, Saudi Arabia’s first electric vehicle (EV) brand.
Other emerging areas, such as water and waste management, are also attracting partnerships and increased investments from German businesses.
French Companies Expand RHQs to Capitalize on Renewable Energy and Construction
Market reports indicate that over 160 French companies are currently operating in Saudi Arabia, creating more than 13,500 jobs. And, it is believed that up to 30 French firms have successfully established their RHQs in Saudi Arabia.
In fact, the ratio of French firms in Saudi Arabia has grown by a staggering 43% since 2020. Notable among these include Air Liquide, Airbus, Alstom, Crédit Agricole, L’Oréal, Sanofi Aventis, Thales, Total and Veolia.
Total Energies and EDF Renewables are leading the charge in Saudi’s solar energy revolution. It recently secured a contract to build a 0.3 GW solar park in Rabigh Industrial City. EDF Renewables, in partnership with China’s State Power Investment Corporation, will develop two more solar parks totaling 1.4 GW.
These projects align with the country’s broader goal to achieve 130 GW of renewable energy capacity by 2030.
Beyond energy, French companies are taking on crucial roles in reshaping Saudi Arabia’s urban landscape, participating in key large-scale projects such as AlUla.
The Giga Project is spearheaded by the Royal Commission for AlUla (RCU) and the French Agency for the Development of AlUla (AFALULA). Ideally, AlUla stands out as a global hub for French IT companies, including Thales Group, which specializes in cybersecurity solutions.
Once completed, AlUla is expected to significantly contribute $32 billion to the national GDP and create over 38,000 jobs.
Chiefly, construction is one key industry where firms are making significant strides.
Hoffmann Green Cement Technologies signed a 22-year exclusive licensing agreement with Shurfah Group back in 2024. This move subsequently aims to support the Kingdom’s objectives to decarbonize the construction sector.
Aiming to capitalize on the momentum, up to 18 French companies specializing in green buildings have unveiled plans to establish a presence in Saudi Arabia, be it through joint partnerships or RHQs.
A Rise in Italian Company Registrations in Saudi Across Infrastructure and Finance
Business expansion from Europe in Saudi Arabia represents a compelling endeavor for Italian enterprises, whose presence in the Kingdom has significantly expanded in recent years.
This sentiment was evident during the Saudi-Italian Business Forum held in 2024, when the Italian business federation representing 7,000 companies unveiled ambitious plans to increase investments in and subsequently expand to Saudi Arabia.
Italian financial institutions have increasingly shown interest in doing business in Saudi Arabia. A few months ago, SACE, Italy’s state insurance and financial group, provided a substantial $3 billion loan guarantee to support the Neom megacity project.
Additionally, the group has recently signed an MoU with the PIF to accelerate cooperation on sharing information and business expertise.
The collaboration includes the provision of SACE support for up to an additional $3 billion for the financing of projects led by PIF and PIF portfolio companies.
Consequently, this partnership will serve as a catalyst for bringing in more Italian investors to the Saudi shores, potentially leading to increased business setup and company formation in Saudi Arabia.
In fact, the energy sector is a particularly key area of interest. A strategic collaboration between ACWA Power and Italy’s A2A is positioned to revolutionize the green hydrogen sector both in the Kingdom and globally.
Shifting the focus to the industrial sphere, an innovative partnership between Continuus-Properzi and Bahra Electric will localize aluminum and copper rod manufacturing within the Kingdom, effectively strengthening local supply chains.
Moreover, construction giant Salini Impregilo (WeBuild) has repeatedly emerged as the winner of a series of contracts for major infrastructure developments in Neom. That includes a 57-kilometer railway system connecting Neom’s two key cities, Oxagon and The Line.
Real Estate Allures Spanish Investors to Commence the Process of Company Formation in Saudi Arabia
Europe’s company formation in Saudi Arabia continues to gain momentum, with Spanish enterprises making significant inroads into the Kingdom’s strategic sectors, most notably construction and real estate.
Spanish investments now exceed $3 billion, out of which 40% is channeled into the real estate sector.
A standout highlight is the partnership between Saudi Arabia’s National Housing Co. and Spain’s Urbas Middle East Real Estate Co.
This joint venture is set to develop nearly 600 housing units in the Al-Fursan suburb, directly contributing to Saudi’s broader urban development initiatives and addressing the growing demand for diverse housing options.
Playing a key role in attracting French businesses to Saudi Arabia is the Saudi-Spanish Business Forum.
The Forum served as a pivotal platform for showcasing key investment opportunities for Spanish companies looking to secure the first-mover advantage in Saudi’s ever-evolving economic growth saga
With Spanish expertise remaining high in demand for construction, engineering, and consulting, Saudi Arabia continues to cement its place as a key expansion target for Spanish firms aiming to establish a foothold in the region and beyond.
Saudi Arabia Remains a Hotspot for Polish Firms in the Digital Sector
Up to 30 Polish firms have chosen Saudi Arabia as their permanent destination for their branches, HQs and other structures to explore competitive business opportunities.
Polish businesses expanding to Saudi Arabia are largely supported by deepening relationships in areas of mutual interest between the two parties, particularly in IT, data centers, communications, and food security. Leading the next wave of innovation in the customer experience (CX) space is Flying Bisons, a global digital consulting and full-service design agency that recently ventured into Saudi via AstroLabs.
The Saudi-Polish Business Council, established in 2024, serves as a promising avenue for attracting more Polish firms to KSA. Presently, the Council is developing a joint action plan with authorities from both countries, playing a crucial role in streamlining market entry for Polish companies seeking to set up a business in Saudi and establish a first-mover advantage in their respective niches.
Expanding a Business from Europe in Saudi Arabia: Overview of the Key Steps
Starting a business from Europe in Saudi Arabia involves several clear steps. The preliminary step typically requires gathering the essential paperwork. This includes a certificate of incorporation, the memorandum of association (MoA), and articles of association (AoA), as well as an audited financial statement.
Moving on to the next part, European companies have to finalize registrations with more than 10 ministries and governmental entities, as outlined in the three-stage market entry roadmap. Choosing a pertinent office space is one of the key components of this stage.
In the soft landing phase, European businesses must issue the general manager’s Iqama and finalize registrations on key government portals, including Muqeem, Absher, Qiwa, and Mudad. The next critical task is to set up a corporate bank account, marking the conclusion of a successful foreign business setup in Saudi Arabia.
Following successful registration, businesses will need to hire Saudi employees to remain compliant with the Saudization (Nitaqat) quota as well as issue visas for non-Saudi employees. Appointing third-party service providers has proven to be indispensable for managing key business functions such as payroll, HR and accounting.
FAQs About the Business Setup Process from Europe in Saudi Arabia
1. What are the best investment opportunities for European investors in Saudi Arabia?
Saudi Arabia currently permits 100% foreign ownership across many sectors, making it an ideal destination for doing business among European investors and firms. Markedly, incentives are provided to foreign investors in special economic zones, including access to expanding industrial sectors and relaxed Saudization policies.
2. How can European investors start a business in Saudi Arabia?
Incorporating a business in Saudi Arabia requires obtaining a foreign investment license from the Ministry of Investment (MISA), which is part of the first stage of a compliant business setup process. The next stage is typically securing a commercial registration (CR) and completing registrations with ministries and governmental portals. The process ends with securing the GM iqama and opening a corporate bank account. Here is a simplified yet more detailed overview of the Saudi market entry.
3. What are the tax benefits for European investors in Saudi Arabia?
The rate of corporate tax applicable to foreign companies is 20%. Additionally, VAT is imposed at 15%. And, depending on the company’s activities, businesses can be subject to excise tax. Above all, Saudi Arabia offers a very competitive tax landscape, including tax incentive schemes. It ranges from exemptions and/or deductions to promote a thriving industrial and commercial base as well as a diversified and private sector-led economy.
4. Which sectors are growing fastest in Saudi Arabia for foreign investors?
In fact, the government’s push toward economic diversification opens up significant investment opportunities across various non-oil sectors. The fastest-growing sectors attracting European investors include renewable energy, tourism, entertainment technology, and logistics.