GenAI in Saudi Arabia and UAE is rising.

The technology landscape is quickly evolving, and the cost of entry is rising just as rapidly. In this environment, understanding the full Generative AI landscape will be critical.

Generative AI (GenAI) is transforming industries and reshaping global dynamics, becoming a critical factor in innovation and geopolitics. As “GenAI superpowers” like the US and China dominate, businesses must adapt to navigate shifting regulations and competition. This article explores how organizations can thrive in this evolving landscape.

We see that the US and China are currently at pace with controlling the supply of Generative AI. But while all eyes are on the US-China rivalry, something is happening in parallel. A small group of countries—the “middle powers”—is emerging. Each of them has its own distinct strengths that may enable it to compete on a regional and even global scale as a supplier of the technology.

“Two Superpowers” Narrative

The superpowers in GenAI are the US and China, and these two countries control sizeable portions of the whole GenAI value chain. Just to show what we mean by superpower, we’re going to give some details about the US and China’s GenAI ecosystems.

Nearly 70% of the world’s outstanding AI models have been developed by or in partnership with US-based companies or academic institutions since 1950. US-based GenAI startups have received a total of $65 billion in investment since 2019. In addition, giant firms like Alphabet, Amazon, Meta, and Microsoft are expected to exceed $200 billion in their capital expenditures for AI technologies.

Two Chinese companies, Alibaba and the GenAI startup 01.AI, contribute over one-quarter of the world’s top open-source models. China filed more than 76,000 AI patents with the World Intellectual Property Organization between 2019 and 2023. This number is about four times as many as the US.

China also has ample data center infrastructure. And its public R&D budget has averaged $50 billion/per annum between 2016 and 2023. Government VCs have invested nearly a quarter of their total funds in AI firms. This means more than $180 billion in total since 2000.

Middle Powers in Generative AI

There is momentum in other parts of the world. The European Union, Saudi Arabia, the United Arab Emirates, South Korea, and Japan are the powers on the rise in this sector.

The EU has a combined GDP OF $18 trillion and this advantage makes it a massive market. The EU has an extensive and growing pool of AI specialists. While European AI companies are modest in size and funding compared to their US and Chinese counterparts, they have a strong foundation of talent. Compared with the US, GenAI startups in the EU have only received $3.5 billion in investments since 2019.

But the challenge is to balance innovation with safety where regulation takes much longer to catch up with actual innovation. The EU is grappling with regulation as artificial intelligence becomes a cornerstone of economic and social development. We often hear that “the US Invents and the EU Regulates” In fact, its regulations such as the General Data Protection Regulation (GDPR) and the EU AI Act will create demand for EU-developed and -hosted intelligence. This way may be viewed as more trustworthy and protective of European user data.

South Korea and Japan have capabilities across critical GenAI enablers but lack scale. For these two countries investing to achieve this scale can create greater competitiveness. South Korea and Japan also have sizeable capital pools to provide the investment required for the technology.

The annual R&D spending of South Korea and Japan’s tech companies is greater than that of other GenAI middle powers. South Korea spent $28 while Japan spent $26 billion. South Korea and Japan have ranked first and third among GenAI middle powers in AI patents since 2013. Ease of access to the chip is another key enabler. In this context, South Korea and Japan also benefit from their important positions along the hardware value chain.

GenAI in Saudi Arabia and UAE

GenAI in Saudi Arabia and UAE is rising. Saudi Arabia and the UAE are positioning themselves as regional leaders in generative AI (GenAI), leveraging their strategic investments, regulatory agility, and tech-driven ambitions to attract global players. Saudi Arabia and the UAE have abundant land, straightforward approval procedures, pools of capital, and exceptionally low-cost renewables. These factors make these two countries an excellent place to build electricity-gobbling data centers that use AI’s thinking. UAE and Saudi Arabia, have been aggressively investing in advanced AI capabilities.

While Saudi Arabia focuses on integrating AI into its Vision 2030 transformation goals, the UAE emphasizes flexibility and public-private partnerships to foster innovation. Both countries aim to capitalize on AI’s potential to transform industries and strengthen their global influence.

GenAI in the UAE

The UAE has committed $10 billion to its AI venture capital fund, significantly outpacing funding for comparable initiatives globally. This aligns with its broader goal of accelerating technological advancement and diversifying its economy. Its sovereign wealth funds, managing nearly $2 trillion in assets, provide a solid financial backbone for such initiatives.

The UAE has made remarkable progress in AI model development. Notable achievements include the Falcon LLMs by the Technology Innovation Institute and the Jais model family by G42, both recognized for their high performance and focus on Arabic-language capabilities. Additionally, the UAE’s G42 is targeting global markets with models like Nanda LLM, catering to India’s Hindi-speaking population.

The UAE’s AI talent pool has grown by 36% since 2022, with around 7,000 AI specialists now residing in the country. While small compared to Western nations, this growth is complemented by advancements in data center capacity, bolstered by low energy costs and eased chip export restrictions. These developments are essential for building a self-sustaining GenAI ecosystem.

GenAI Regulations in the UAE

The UAE has adopted a flexible and agile regulatory framework to establish itself as a global hub for artificial intelligence (AI). By emphasizing a pro-business approach, the country aims to foster rapid innovation and position itself at the forefront of AI advancements. Its policies focus on encouraging public-private partnerships and facilitating the swift deployment of cutting-edge technologies. Instead of enacting a singular, overarching AI law, the UAE employs a “patchwork of decrees and guidelines” developed over time, reflecting its commitment to becoming a leader in the AI space. This strategy enables the UAE to adapt quickly to technological advancements while creating an environment conducive to innovation, according to a report by law firm White & Case.

In the free zones, no specific AI regulations have been introduced, but updates to existing laws, such as data protection rules, have been implemented to address the evolving challenges brought by AI. This approach seeks to balance innovation with risk mitigation by relying on industry-led guidelines rather than broad regulatory measures. By prioritizing flexibility and collaboration, the UAE positions itself as a dynamic center for technological progress while ensuring that ethical and security considerations are addressed through tailored adjustments to its regulatory landscape.

GenAI in Saudi Arabia

Saudi Arabia is channeling unprecedented funds into AI, with plans to invest $40 billion in AI development and an additional $100 billion in data center expansion under Project Transcendence. The Kingdom’s earlier $100 billion tech fund (Project Alat) underscores its commitment to becoming a GenAI leader. These investments are part of a broader strategy to diversify its economy in line with Vision 2030.

Saudi Arabia is making strides in Arabic-language AI. Aramco developed the world’s largest industrial GenAI model, while the Saudi Data and AI Authority released ALLaM, a leading Arabic large language model (LLM) family. These advancements demonstrate Saudi Arabia’s focus on leveraging its linguistic and cultural strengths in the AI domain.

Despite notable growth in its AI talent pool—up 17% since 2022—Saudi Arabia’s 5,000 AI specialists are still far fewer than in Western nations like Germany. Additionally, the Kingdom needs to expand its technology export markets to sustain the high costs of GenAI model development and secure long-term profitability.

In conclusion, both Saudi Arabia and the UAE are making significant strides in establishing themselves as key players in the global generative AI landscape. With strategic investments in AI research, infrastructure, and talent, these Gulf nations are laying the foundation for a future powered by cutting-edge technology. However, sustaining growth in talent and expanding into profitable international markets will be crucial for their long-term success. As both countries continue to leverage their financial resources and regional advantages, their efforts will undoubtedly shape the future of AI development in the Middle East and beyond.

This article is based on data and insights from Boston Consulting Group’s (BCG) research. The report highlights how generative AI is transforming industries globally and becoming a pivotal factor in geopolitics, requiring governments and businesses to stay agile and adapt to rapidly evolving dynamics.

In a rapidly evolving global business landscape, companies are rethinking their strategies to remain competitive. Challenges like cost pressures, sustainability demands, and market shifts are pushing businesses, particularly in the technology sector, to explore new opportunities. Among the options, Saudi Arabia stands out as a compelling choice, offering a vibrant ecosystem for growth and innovation backed by a rapidly diversifying economy.

A Transformative Technology Ecosystem

Saudi Arabia has become a magnet for technology leaders and innovators, cementing its global reputation by hosting landmark events like LEAP 2025. The event, hailed as the world’s largest technology gathering, is set to attract over 172,000 attendees and showcase innovations from more than 1,800 global tech companies, including industry giants such as Microsoft, Oracle, and Google. Investments during LEAP are expected to soar to $11.9 billion, further solidifying the Kingdom’s position as a global tech hub.

Recent success stories highlight Saudi Arabia’s appeal. Tech giant Apple has announced a further expansion into the country, combining retail operations, developer training, and digital payment infrastructure investments. Apple will launch its first online retail store in Saudi Arabia in the summer of 2025, as the company aims to strengthen its presence in the Middle East’s technology sector.

These milestones underscore the Kingdom’s ability to attract diverse players, from global firms to homegrown startups.

Vision 2030: A Roadmap for Growth

At the core of Saudi Arabia’s transformation is Vision 2030. This ambitious plan aims to diversify the economy and increase SME contributions to GDP from 20% to 35%. Additionally, it seeks to boost foreign direct investment from 3.8% to 5.7%.

The digital economy plays a pivotal role in this vision. Currently contributing 14% of GDP, it is on track to reach the 19.2% target by 2030. Continued investment in technology and innovation is driving this growth.

Deep Technology: Leading the Way

Saudi Arabia is emerging as a hub for deep technologies. Half of the nation’s deep tech startups focus on AI and IoT. Collectively, they have attracted nearly $1 billion in funding. These startups support the National Strategy for Data and AI, which aims to position Saudi Arabia as a leader in this field.

The strategy focuses on attracting investment and strengthening research. Since 2015, the number of researchers has increased by 75%. By 2030, the researcher base is expected to grow sevenfold, creating a robust foundation for innovation.

Growing Venture Capital Activity

The Kingdom is experiencing a surge in venture capital (VC) funding. In 2023, startups raised $1.8 billion, representing over half of MENA’s total funding. Fintech led the way, attracting 51% of total investment. Companies like Tamara and Tabby achieved unicorn status, while e-commerce platforms also secured significant funding.

Meanwhile, emerging sectors like health tech, renewable energy, and climate technology are gaining traction. These align with Vision 2030’s focus on sustainability and innovation.

Government Support for Entrepreneurs

Saudi Arabia’s government is committed to fostering entrepreneurship. Programs like the Saudi Unicorns initiative and the National Technology Development Program (NTDP) provide critical support. Over 100 startup investors were active in 2023—a 41% increase from 2018.

Public funding and simplified regulations further encourage startups to thrive. Accelerators and funding initiatives also support high-growth businesses. These efforts create a vibrant ecosystem for innovation.

A Promising Future for Technology

Saudi Arabia is transforming into a global technology leader. Through Vision 2030, the Kingdom is building a knowledge-based economy. By investing in deep tech, supporting entrepreneurs, and fostering venture capital, it offers unmatched opportunities for growth.

For businesses seeking innovation and expansion, Saudi Arabia is the place to be.

Injaz Company is proud to support technology companies entering the Saudi market. We provide tailored services, including market entry strategies, local partnerships, and on-ground support. By leveraging our expertise and network, we help businesses thrive in this dynamic and fast-growing economy.

The 2034 FIFA World Cup and investment go hand in hand, as the event will act as a catalyst for economic growth across Saudi Arabia.

Saudi Arabia is gearing up to host the FIFA World Cup in 2034, a milestone event that is reshaping its economic and development landscape. This global sporting event is not just about football—it’s a gateway to lucrative investment opportunities across multiple sectors. With Vision 2030 as a guiding framework, the Kingdom is aligning its ambitious infrastructure and urban development projects to create a lasting legacy for investors.

The 2034 FIFA World Cup and investment go hand in hand, as the event will act as a catalyst for economic growth across Saudi Arabia. Preparations are driving investments into real estate, tourism, transportation, and entertainment. Businesses worldwide are eyeing the Kingdom as a hub of opportunity, with billions being poured into projects that will serve visitors and locals alike. The synergy between the World Cup and investment ensures benefits long after the final whistle, setting the stage for sustained development.

The World Cup and Investment in Real Estate

The real estate sector is at the forefront of this transformation. Preparations for the World Cup include the construction of eight state-of-the-art stadiums and upgrades to iconic venues like King Fahd International Stadium. Cities such as Riyadh, NEOM, and Jeddah are experiencing unprecedented growth, with new mixed-use developments combining residential, commercial, and recreational spaces.

These projects not only support the tournament but also pave the way for sustainable urban expansion. Investors can tap into high-demand areas, especially near venues, where property values are surging. Short-term rentals, luxury residences, and hospitality ventures are becoming prime opportunities for global and local stakeholders alike.

World-Class Infrastructure for FIFA World Cup

Saudi Arabia is investing heavily in transportation networks to enhance connectivity. High-speed rail systems, metro expansions, and upgraded airports are key highlights. These projects make travel seamless for millions of expected visitors while boosting economic activity in surrounding regions. For businesses, this translates into long-term benefits, including improved logistics and access to new markets.

World Cup and Investment Hospitality and Tourism

2034 FIFA World Cup and Investment Opportunities in Saudi Arabia

Saudi Arabia is emerging as a global leader in tourism, driven by innovative strategies and significant investments that present unmatched opportunities for investors. Saudi Arabia has embarked on a transformative journey under its Vision 2030 framework. The Kingdom’s approach to tourism is multifaceted, focusing on both immediate recovery and long-term sustainability. Tourism is set to thrive, with landmark destinations like AlUla, The Red Sea Project, and Diriyah Gate attracting millions. During and after the World Cup, demand for hotels, restaurants, and entertainment facilities will skyrocket. Investors can explore opportunities in building world-class accommodations or developing vibrant cultural hubs to cater to this growing influx.

Green and Smart Innovations

The World Cup is also fueling the rise of green and smart cities. NEOM, a futuristic city powered by renewable energy, embodies sustainability and innovation. Stadiums designed with eco-friendly features, such as solar power and water conservation systems, will set new benchmarks for environmental responsibility. These projects align with Vision 2030, which prioritizes sustainability and smart solutions across industries.

How Injaz Company Can Support You

As Saudi Arabia unlocks vast investment opportunities in Saudi Arabia, Injaz Company helps businesses enter this dynamic market. We specialize in connecting construction companies with key stakeholders, guiding them through regulatory frameworks, and identifying strategic projects. Whether you’re looking to establish a presence or expand operations, Injaz ensures a smooth, informed, and successful market entry.

Iraq has faced longstanding challenges in attracting foreign direct investment (FDI). Persistent security issues, weak institutions, and governance gaps have kept FDI inflows negative since 2013. In 2022, UNCTAD’s World Investment Report recorded a -USD 2 billion inflow, slightly improved from -USD 2.6 billion in 2021. Yet, recent data from fDi Markets reveals a potential turning point. During the first nine months of this year, Iraq attracted an unprecedented USD 24 billion in FDI. This figure more than doubles the previous record set in 2008, highlighting renewed investor interest.

Hydrocarbons remain a key driver of foreign investment in Iraq, with most FDI directed toward the oil sector. Oil exports serve as the foundation of Iraq’s GDP. Beyond oil, Iraq’s cement production and construction sectors present promising opportunities. According to the World Bank, Iraq needs around USD 57 billion for reconstruction. To meet this demand, authorities are working to attract international oil companies while also promoting investment in non-oil sectors. Key areas include construction, renewables, clean energy, and banking, all of which offer growing potential for foreign investors.

In Iraq, much of the non-state, non-oil economy is informal, cash-based, and vibrant. Iraq remains one of the most under-banked countries in the Middle East, cash transactions are prevalent, and much of the economy is dollarized. The Iraqi government is aware of the challenges this imposes for business and is taking some initial corrective actions.

Investors will find opportunities from one extreme to the other: massive energy deals with ministries and importing brands to Iraqi kitchens.

Foreign Direct Investment in Iraq

Iraq administers foreign direct investments under its National Investment Law. Under Iraqi law, foreign investors are granted the same investment terms as Iraqi investors, with no cap on foreign ownership. However, Iraq’s National Investment Law restricts foreign ownership in natural resources, specifically in extraction and processing. Additional limits apply to foreign ownership in banks and insurance companies. The government also retains the right to screen foreign direct investments. Although Iraq is working to enact the necessary laws and build institutions, progress remains slow in establishing the frameworks needed for effective economic policy implementation.

Under the Iraqi Investment Law, foreign investors can enjoy various exemptions for qualified investments. These include a 10-year tax exemption, exemptions from import duties on essential equipment and materials, and waivers for taxes and fees on primary materials. Additionally, investors are permitted to repatriate capital and profits generated in Iraq. Foreign investors can also trade on the Iraqi Stock Exchange.

Hotels, tourist facilities, hospitals, educational institutions, and colleges benefit from extra exemptions on duties and taxes for importing furniture, tools, equipment, machinery, and transportation means. However, foreign companies selling goods or services in Iraq may still be subject to Iraqi taxes.

Generally, companies are taxed at 15% on profits, while those engaged in “petroleum activities,” which can be open to interpretation, face a 35% tax on profits.

Investing in Kurdistan

The Iraqi constitution grants semi-autonomous rights to the Kurdistan Region (IKR), making it a popular entry point for foreign businesses in Iraq. The Kurdistan Region operates under a distinct 2006 investment law that offers foreign investors several incentives, including full property ownership, capital repatriation, and 10-year tax holidays.

The Kurdistan Board of Investment (KBOI) oversees licensing and promotes investment in key sectors like agriculture, manufacturing, and tourism. Additionally, the KBOI’s Foreign Direct Investment Unit supports foreign investors in navigating the Kurdistan Regional Government’s (KRG) bureaucracy and resolving any challenges that arise.

A key advantage in Kurdistan is that foreign companies can maintain 100% ownership, unlike in federal Iraq, where foreign ownership is capped at 49%. This autonomy and ownership freedom make the Kurdistan Region an attractive destination for foreign investment.

The Kurdistan government actively seeks to attract further investment, providing dedicated support to facilitate the investment process.

Challenges in Iraqi Investment Landscape

Investing in Iraq comes with a range of challenges. Common issues for both local and foreign companies include corruption, complicated business registration, customs and tax hurdles, selective regulation enforcement, dispute resolution difficulties, electricity shortages, and limited financing options. Iraq has slowly worked on enacting laws and developing institutions, but progress remains limited. Furthermore, political reforms are needed to help ease investor concerns about Iraq’s uncertain business environment.

Investors in Iraq should conduct thorough due diligence on local partners before making commitments. In Iraq’s honor-based culture, relationships are crucial, yet courts are often ill-equipped to handle commercial disputes that may arise. In a positive step forward, Iraq signed the UN Singapore Convention on commercial mediation in 2024.

The government is eager to attract more foreign direct investment in Iraq, yet persistent issues in security and political stability continue to deter investors. Security risks, including the potential resurgence of extremist groups, still disrupt business operations and trade routes, hindering economic growth. Despite Iraq’s abundant oil resources, energy shortages remain severe, with many regions facing blackouts up to 12 hours daily. Heavy reliance on oil—99% of exports and 85% of the national budget—leaves Iraq highly vulnerable to energy price fluctuations, according to the World Bank.

Key factors hindering FDI in Iraq include:

Heavy dependence on the oil sector, leading to vulnerability in energy markets
Slow, complex processes for resolving commercial disputes and securing timely payments
An opaque regulatory environment that complicates operations
Widespread issues in government contracts, licensing, and tendering processes
Limited, underdeveloped banking sector and financing constraints
Persistent security concerns, violence, and instability across various regions

Company Registration in Iraq

Foreign investors interested in establishing an office in Iraq or bidding on a public tender are required to register as foreign businesses with the Ministry of Trade.

For foreign investors looking to enter the Iraqi market, three main vehicles can be used:

Private limited liability company (LLC);
Branch office of a foreign entity; and
Representative office of a foreign entity.

There are also mixed and joint stock companies, but the above corporate structures are most appropriate for establishing a corporate presence in Iraq for foreign investors.

In conclusion, the commercial opportunities are huge in Iraq. Because the country rebuilds its infrastructure and main institutions. This brings unique investment opportunities for foreign investors. Moreover, the Iraqi Investment Law offers significant tax exemptions, including a 10-year tax holiday and import duty waivers on essential materials. In addition, the Kurdistan Region provides favorable conditions such as full property ownership and capital repatriation. However, investors should remain aware of challenges, including regulatory complexities and the security environment.

At Injaz Company, we specialize in company formation in Kurdistan and Iraq. We guide foreign investors through each step of the process—ensuring smooth market entry into the Iraqi and Kurdish markets.

Company establishment in Iraq presents unique opportunities, especially for foreign investors.

Iraq is the fourth most populous country in the Middle East and has the world’s fifth largest proven oil reserves. Iraq, widely known with its rich heritage as the “Cradle of Civilisation”, is predominantly a desert. This desert is made fertile by the Euphrates and Tigris rivers. The official languages of Iraq are Kurdish and Arabic.

Iraq is highly dependent on oil and gas sectors. Oil accounted for 43% of the GDP, 92% of the government budget revenues, and 96% of the country’s exports in 2019. Iraq is highly dependent on oil. In 2021, this constituted 37% of Iraq’s GDP, 84% of government revenue and 96% of exports.

The political and security situation remains fragile in Iraq. Despite this, commercial opportunities are huge as the country rebuilds its infrastructure and main institutions.

Furthermore, company establishment in Iraq presents unique opportunities, especially for foreign investors. Our article is intended to provide an introduction to company establishment and legal aspects of doing business in Iraq, particularly from the perspective of the items an inbound investor will have in mind.

Types of Companies Available for Foreign Investors

Iraq’s company law, as outlined in Law No. 21 of 1997, amended by Law No. 17 of 2019, governs the formation of legal entities. Foreign companies may establish a presence in Iraq in the following forms:

1. Limited Liability Company (LLC) – Foreign ownership restrictions apply.
2. Branch Office of a Foreign Company – No foreign ownership restrictions.
3. Joint Stock Company (JSC) – Foreign ownership restrictions apply.
4. Holding Companies – Foreign ownership restrictions apply.

It’s important to note that joint ventures are not recognized as separate legal entities under Iraqi company law.

In practice, the most common form of entities for foreign investors are the limited liability company (LLC) and branch office. A limited liability company (LLC) can be established with a minimum capital of $860 and just one director and shareholder, both of whom can be foreign nationals. The entire process can take up to eight months. However, branches are the preferred entity type for most foreign firms, and they can be registered within five months or as quickly as three months with expedited fees.

Limited Liability Company Establishment in Iraq

Amendment No. 17 of 2019 to Iraq’s company law removed the previous allowance for foreigners to own 100% of shares in Iraqi companies. Now, it is mandatory to have at least 51% of shares owned by an Iraqi shareholder. This shift often necessitates a corporate restructuring to address management rights, signing authorities, and other governance matters. Foreign shareholders are strongly advised to consult a local law firm to ensure that their interests are protected. This will also help them to properly navigate the restructuring process.

An LLC in Iraq can be formed with up to 25 shareholders and requires a minimum share capital deposit of IQD 1,000,000 in an Iraqi bank before registration. It can have one director, who may be a non-resident foreign national. Foreign shareholders must undergo security clearance from the Ministry of Interior. This process typically lasts about six weeks but potentially longer. Required documents for registration include the company name, intended business activities, founder details, share capital, office address, memorandum of association, and the appointment of both an auditor and a manager.

Branch Office Establishment in Iraq

Foreign companies are allowed to open branch offices in Iraq. Although a branch office’s activities are restricted to the scope defined by the parent company, it can still perform essential business functions like invoicing local customers, signing sales contracts, and receiving income within Iraq, providing significant operational flexibility.

Further to the issue of new foreign branches regulation No.2 of 2017, it is now possible for entities that do not have contracts with the government to register a branch in Iraq. It is difficult to predict the time taken to register a legal entity in Iraq, but a time frame of 6 to 12 months would be typical. It is generally faster and more straightforward to register a branch of a foreign company than an LLC in Iraq.

General Manager Appointment

Each entity must appoint a manager or director who is resident in Iraq. If required, and until our Client has secured a work and residence permit in Iraq, Injaz Company will be happy to supply our Client with a professional, passive nominee Iraqi branch manager for 12 months.

Company Registration in Kurdistan Region of Iraq

In the Kurdistan Region of Iraq (KRI), the Federal Companies Law No. 21 of 1997, as amended, applies. Additionally, Regulation No. 5 of 1985 governs the registration of branches and representation offices of foreign companies. The registration process begins at the General Directorate of Company Registration under the Ministry of Trade, with branches located in Erbil, Dohuk, or Sulaymaniyah, depending on the area of operation. If a company operates in multiple governorates, registration must be completed in each relevant location. Moreover, we will provide more detailed information about company registration in Kurdistan in a separate article.

Advantages of Company Establishment in Iraq

Taxes

There is no VAT, withholding tax on dividends or royalties, and corporate tax exemptions for dividends between Iraqi companies. Free zone companies benefit from 100% tax exemptions and unrestricted currency transfers. Moreover, Iraq has bilateral investment agreements with countries such as the USA, UK, and Japan. Also it has free trade agreements with countries including Egypt, Lebanon, Qatar, and UAE.
National Investment Commission (NIC) Benefits
- NIC projects with investments over $250,000 benefit from a 10-year tax exemption, which can be extended for 15 more years if Iraqi participation increases to 50%.
- NIC projects are exempt from customs duties for asset imports, and foreign workers can be directly hired without advertising for local labor first.
These incentives, combined with Iraq’s export-oriented economy, make Iraq an attractive destination for businesses in sectors such as petroleum, gold, agriculture, and more. However, legal and procedural complexities require careful planning and expert consultation.
At Injaz Company, we specialize in helping businesses establish themselves in Kurdistan and Iraq. With our comprehensive company formation services, we guide you through each step of the process—ensuring smooth, hassle-free entry into the Iraqi and Kurdish markets. Injaz Company is here to make your expansion a success. Let us help you unlock the full potential of Iraq’s growing economy.

Establishing a company in Saudi Arabia offers immense business opportunities, driven by the country’s ambitious economic transformation under Saudi Vision 2030. This initiative aims to diversify the economy beyond oil, opening up sectors such as technology, healthcare, infrastructure, and tourism to foreign investors. With its strategic location, growing infrastructure, and government-backed incentives, Saudi Arabia is becoming a global business hub. However, understanding the local business landscape, regulations, and licensing requirements is crucial for success in this rapidly evolving market. By setting up a business in Saudi Arabia, companies can tap into the region’s dynamic growth and play a part in its bold future vision.

Establishing a Company in Saudi arabia: A Step-by-Step Guide

When forming a business in Saudi Arabia, it’s essential to follow a few key steps, from obtaining the necessary licences to officially incorporating the company. This process can be complicated, especially for those unfamiliar with the Saudi market. Even local businesspeople sometimes struggle with the details, and one mistake can be costly. That’s why we recommend working with a knowledgeable lawyer or setup partner to guide you through the process. Below, we break down the key steps foreign investors need to take to successfully set up a business in Saudi Arabia.

Part 1: The Investment Licence (MISA Licence)

What is the Investment/MISA Licence?

The first and most crucial step for any foreign investor looking to start a business in Saudi Arabia is obtaining an investment licence, commonly known as the MISA licence. This licence is mandatory for any business where the shareholders are non-GCC nationals. However, if all owners of the company are GCC nationals, this step is not required.

Once you have your investment licence, you are officially allowed to conduct business in Saudi Arabia. Keep in mind, however, that there are different types of investment licences depending on the nature of your business. It’s vital to understand which licence applies to your specific industry.

What are Business Activities?

As part of the company formation process, you’ll need to select your business activities. Saudi Arabia follows the International Standard Industrial Classification (ISIC 4) for business activities, which is a global standard. It’s important to ensure that your selected activities align with your chosen licence type. You can search the full list of business activities here.

Be aware that not all business activities are allowed for foreign investors. Some industries, such as healthcare and FinTech, require special licences. These licences may come with additional costs and bureaucratic steps, so it’s advisable to consult a lawyer to navigate the complexities. For further details, visit the MISA website.

Part 2: Choosing a Trade Name

What is a Trade Name?

A trade name is the official legal name of your company. It’s important to differentiate between a trade name and a trademark. While the trade name is used for legal identification, the trademark is how your business is recognized commercially.

Guidelines for Saudi Trade Names

When selecting a trade name, you must follow certain guidelines:

Shariah Compliance: Your trade name must adhere to Islamic principles.
Appropriateness: Inappropriate or offensive names are prohibited.
Uniqueness: The name cannot be identical to any existing business. For instance, names like “Aramco” or “NEOM” would be rejected.
Language: You may use either Arabic or English, and you can retain your company’s original name if it is in English.

Banned Trade Names

It’s also crucial to be aware that certain words are banned from use in trade names. These include religious terms like “Quran” or “Allah,” historical landmarks such as “Hira,” and city names like “Riyadh” or “Jeddah.”

Part 3: Establishing a Company in Saudi arabia and General Manager Authorities

Once your investment licence and trade name have been approved, you can move on to the actual company incorporation process. While most of the process is done online, you or your lawyer will need to visit a Saudi authority once to verify the identities of the business owners. This physical visit ensures that all submitted documents are legitimate.

What is the Articles of Association (AoA)?

To legally operate your business, you need to submit your company’s Articles of Association (AoA). This document outlines the key structures and governance of your business. The AoA contains information such as:

Company owners’ names and details
Passport information
Stakeholder percentages
Capital amount (as predefined in your MISA licence)
Headquarters location
Customised articles based on specific authorities

Authorities of the General Manager (GM)

One of the most important parts of the AoA is defining the authorities of your General Manager (GM). This section outlines the GM’s roles and responsibilities, including governance, representation, and decision-making powers. There are more than 300 GM authorities to choose from, ranging from assigning shareholders to signing contracts on behalf of the company.

Final Thoughts on Establishing a Company in Saudi Arabia

Successfully navigating the process of starting a business in Saudi Arabia requires careful attention to detail. From obtaining the right licenses, selecting the appropriate business activities, and choosing a compliant trade name, to completing the incorporation process, each step is critical to your company’s success. To avoid costly mistakes, partnering with experienced professionals is key.

At Injaz Company, we specialize in helping businesses establish themselves in Saudi Arabia. With our comprehensive company formation services, we guide you through each step of the process—ensuring smooth, hassle-free entry into the Saudi market. Whether it’s handling complex regulatory requirements or providing expert advice on local business practices, Injaz is here to make your expansion a success. Let us help you unlock the full potential of Saudi Arabia’s growing economy.

Saudi Arabia Property Investment is getting more attention. As Saudi Arabia attracts more international investment, the property sector is becoming increasingly important. Related industries like construction and building materials are also growing. Real estate investment in Saudi Arabia is a promising opportunity for investors. The country has a growing economy and a stable political atmosphere, making it an attractive area for real estate investment. With the expanding real estate market, foreign investors must understand their legal rights and obligations.

Land ownership in Saudi Arabia has a rich historical context influenced by various factors such as Sharia, Royal Decrees, and legal residency status. In general, the regulations in the Kingdom clarify the terms of property ownership and investment for non-Saudis, along with the permits and documents that must be submitted to complete transactions.

Saudi property transfer regulations have also ensured that these transactions, for both Saudis and non-Saudis, take place in a modern and technologically advanced way, thus saving time without sacrificing quality or efficiency.

Foreign investors who wish to own land in Saudi Arabia must adhere to certain regulations and obtain the necessary licenses Non-Saudis can own property for private residence under the Real Estate Ownership Law. However, this requires approval from the Ministry of Interior. The following subsections provide more information on the regulations for foreign investors.

Who can own a Property in Saudi Arabia?

Premium Residency and Saudi Arabia Property Investment

The Premium Residency Center was founded in January 2019, per the Council of Ministers’ resolution, to draw in highly skilled individuals and investors to contribute to Saudi progress by offering them flexible options for housing, settlement, and work. The center’s mission is to cater to the needs of the premium residency holders and focus on retaining them while continuously striving to develop premium residency products that attract distinguished individuals and encourage more investments in Saudi.

General Benefits of the Premium Residency

Reside in Saudi with family members, including parents, spouses, and children under 25.
Flexibility to move from one establishment to another.
Exemption from the fees imposed on expats and their dependents and companions.
Exit and return to Saudi for the premium residency holder and their family members without requiring a visa.
The entitlement to obtain visit visas for relatives.
Use tracks dedicated to citizens and GCC nationals at airports.
The entitlement to work in the private sector and move between establishments applies to the husband, wife, and dependents.
Conducting business under the guidelines of The Investment Law.
Own and Usufruct real estate.

Special Economic Zones

A Special Economic Zone is a geographically delimited area that facilitates specific economic activities. It provides competitive advantages and legislative frameworks that differ from the base economy, while complying with the Kingdom’s obligations under international treaties.

Saudi Arabia is taking a bold step forward in its pursuit of becoming a global investment destination with the announcement of the establishment of four new special economic zones (SEZs) in 2023. The SEZs will be located in Riyadh, Jazan, Ras Al-Khair, and King Abdullah Economic City.

ECZA is the umbrella regulator and trusted national reference for Economic Cities and Special Economic Zones with global standards. As the enabler and umbrella regulator, ECZA creates the regulatory framework and facilitates the Relevant Entity to build and operate the SEZs. Regulations have been issued by the Economic Cities Authority for the registration of all foreign companies established in the economic cities. Also, the Authority is responsible of the registration of all land title deeds in the name of foreign entities established in the economic cities and the issuance of licences. Moreover, other approvals to service providers such as district cooling, warehousing, logistics, etc in the economic cities are regulate the Economic Cities Authority.

Property Lease in Holy Sites: Makkah and Madinah

The Privatization Law, approved by the Council of Ministers in 2021, allows foreign investors to rent real estate within the borders of the holy cities of Makkah and Madinah.

These leases are tied to the duration of the contract between the investor and an executive authority and are specifically for implementing privatization projects. The law emphasizes that the property must be used solely for this purpose, with all instructions outlined in the contract being followed. If the investor fails to comply with any conditions, the executive authority will notify them, giving time to correct the violation. If no action is taken, the lease contract will be terminated.

Additionally, the law prohibits private establishments that have signed a privatization contract from transferring or assigning their partnership contract to another party without written approval from the executive authority. Subcontracting for certain aspects of the public-private partnership (PPP) project is allowed, as long as the obligations of the main contract are upheld. Importantly, private sector activities under the contract are not classified as monopolistic, even if they restrict competition, as long as they fulfill the terms of the agreement.

Historically, non-Saudis could not own real estate in Makkah and Madinah, and leases were limited to six years. However, since late 2019, Premium Residency holders can lease household property in these cities for up to 99 years, marking a significant shift in property laws.

The Real Estate General Authority

The Real Estate General Authority was established by Council of Ministers Decision No. 239 on 25/4/1438. Its main goals are to increase transparency, promote investment, and ensure consumer protection in the real estate industry.

To boost transparency, the Authority has developed price indicators for both selling and rental markets. It has also introduced indicators for monitoring construction progress. Additionally, the Authority is working on improving regulations to reduce property disputes and shorten processing times.

In its efforts to attract investment, the Authority has conducted local and international comparisons. It aims to implement best practices from countries like Australia, the United States, Hong Kong, Singapore, and the UAE. Moreover, the Authority plans to organize training programs and accredited courses to enhance skills and improve the quality of real estate stakeholders.

Conclusion

In summary, the Vision 2030 is set to create numerous opportunities in the real estate sector, driving the development of new regulations and guidelines. These efforts aim to adopt international best practices and position Saudi Arabia as a preferred global real estate destination.

The purpose of this article was to provide developers, investors and other stakeholders with an overview of the main laws and regulations affecting the real estate practice in the Kingdom of Saudi Arabia, as well as the practical issues to consider. Overall, the regulations for foreign land ownership in Saudi Arabia are complex and subject to change. Foreign investors should consult with legal experts and obtain the necessary licenses and approvals before investing in real estate in the Kingdom.

In recent years, Saudi Arabia’s fintech sector has emerged as a key player in the Middle East, signaling a profound shift in the financial services landscape. With the sector’s assets projected to exceed $64 billion in 2024, it is clear that the Kingdom is becoming a hub for financial innovation. This growth is fueled by several factors, including government initiatives, venture capital investment, and an increasingly tech-savvy population. As fintech companies continue to expand, their impact on Saudi Arabia’s economy, regulatory framework, and financial inclusivity cannot be overstated.

Rapid Growth in Saudi Arabia’s Fintech Sector

The pace of growth in the fintech sector has been remarkable. In 2023, venture capital investments surged sixfold, with Saudi fintech firms raising $666 million across 10 funding rounds. This exponential increase highlights the sector’s growing importance in the national economy. The rise of innovative business models has not only captured the attention of local investors but also attracted international players. Regulatory bodies, like the Capital Market Authority (CMA) and the Saudi Central Bank (SAMA), have played pivotal roles in nurturing this environment by balancing innovation and market stability.

Since the launch of the regulatory sandbox in 2018, SAMA has fostered a testing ground for fintech innovation. More than 500 companies have applied to participate in the sandbox, which allows firms to experiment in a controlled setting. This initiative has encouraged the growth of emerging models such as robo-advisory services, social trading, and equity crowdfunding, all of which contribute to the expanding financial ecosystem in Saudi Arabia.

Khaled Al-Dhaher, vice governor for supervision and technology at the Saudi Central Bank. Saudi Arabia’s Fintech Sector.

Government Initiatives and Vision 2030

Saudi Arabia’s fintech development is closely aligned with the nation’s broader economic goals under Vision 2030. This strategic framework, launched by the government, emphasizes diversification away from oil and positions fintech as a key enabler of economic transformation. The Financial Sector Development Program and the National Fintech Strategy have been instrumental in shaping a clear roadmap for the sector’s future. Both initiatives are designed to increase financial inclusion, boost job creation, and attract foreign investment.

By the end of 2023, the number of fintech companies in Saudi Arabia had grown to more than 230, far surpassing initial targets. Fintech is not just transforming the financial services industry but is also leading to significant job creation. Over 6,500 jobs have been generated by the sector, and this number is expected to rise as the number of fintech companies is projected to grow to 525 by 2030.

Saudi Arabia’s Fintech and Collaboration with Traditional Financial Institutions

An interesting aspect of Saudi Arabia’s fintech growth is the collaboration between fintech companies and traditional financial institutions. Instead of viewing fintech as a threat, many banks and financial entities have embraced these innovations to enhance their own services. Partnerships are flourishing as established institutions work with fintech firms to deliver more efficient, user-friendly digital solutions. This collaborative approach is transforming the financial landscape, accelerating digitalization, and making financial services more accessible to the Saudi population.

For instance, the adoption of Buy Now, Pay Later (BNPL) services and Open Banking solutions is growing. These innovations have created more convenient payment methods, increasing customer satisfaction and loyalty. The fintech sector’s momentum shows no signs of slowing down, especially given the Kingdom’s young, digitally literate population. As more citizens embrace mobile banking and digital financial products, fintech companies are increasingly catering to their needs.

Regulatory Support and Challenges for Saudi Arabia’s Fintech

While the future of Saudi Arabia’s fintech sector looks promising, there are still challenges to overcome. One of the primary challenges lies in ensuring that the sector remains diversified and competitive. Initially, fintech innovation in Saudi Arabia was focused predominantly on payment services, which led to the country achieving a 70% electronic transaction ratio, well ahead of its target. However, as fintech continues to evolve, there is a growing need for diversification into areas like crowdfunding, robo-advisory, and insurtech.

Regulators such as SAMA and the CMA are keenly aware of these challenges. SAMA has made clear that its goal is not to create a risk-free environment for fintech but rather to enable innovation in a controlled and safe manner. By fostering a regulatory environment that encourages responsible growth, SAMA ensures that fintech firms can coexist with traditional financial institutions without disrupting the broader financial system. Moreover, initiatives like the Makken Program, launched by Fintech Saudi in collaboration with SAMA, provide fintech entrepreneurs with critical support in areas like cloud computing, cybersecurity, and technology infrastructure.

Saudi Arabia’s Fintech Sector. Jean Pesme, global director of finance at the World Bank. Speaks at the 24 Fintech Conference

Financial Inclusivity and Global Recognition

Saudi Arabia’s fintech sector is not only contributing to economic diversification but is also driving financial inclusion across the Kingdom. With millions of customers now accessing digital financial services, the sector is improving access to banking, particularly for underserved populations. Fintech has the potential to play a crucial role in addressing inequalities and promoting financial access, especially for women and small businesses.

The Kingdom’s fintech ambitions extend beyond its borders. Saudi Arabia is increasingly seen as a leading fintech hub in the Middle East, and it has begun to carve out a prominent role in the global fintech landscape. With its advanced digital infrastructure, strong regulatory framework, and government support, the Kingdom is well-positioned to attract even more international fintech players. As these companies enter the Saudi market, they will bring with them additional expertise, investment, and innovation, further strengthening the sector.

Injaz Role at the Saudi Arabia’s Fintech

For international fintech companies looking to expand into Saudi Arabia, Injaz Company plays a crucial role in navigating the complexities of market entry. With extensive experience in the Saudi business landscape, Injaz Company assists foreign fintech firms by providing market insights, helping them comply with regulatory requirements, and connecting them with local distributors and partners. By offering tailored business expansion strategies, Injaz enables foreign fintech companies to tap into the growing Saudi market. Furthermore, Injaz Company enables them to take advantage of the Kingdom’s thriving fintech ecosystem.

A Bright Future for Saudi Arabia’s Fintech

The future of Saudi Arabia’s fintech sector is bright. With strong government support, increasing venture capital investment, and a rapidly growing number of innovative companies, the Kingdom is poised to lead the fintech revolution in the Middle East. Furthermore, the sector’s contribution to economic diversification, job creation, and financial inclusion aligns perfectly with Saudi Arabia’s Vision 2030 goals. However, maintaining momentum will require continued focus on regulatory support, market diversification, and collaboration between fintech companies and traditional financial institutions.

In the years to come, fintech will not only reshape the financial landscape of Saudi Arabia but also position the Kingdom as a global fintech leader.

The logistics sector in Saudi Arabia is booming. Global logistics companies are increasingly focusing on Saudi Arabia. The country’s socio-economic transformation is boosting demand for industrial and e-commerce facilities.

Previously, regional and local players, like Aramex and SMSA, dominated the market. However, Crown Prince Mohammed bin Salman’s Vision 2030 has reshaped the landscape. Chinese logistics firms have also entered the market through joint ventures, such as J&T Express and AJEX. This has increased competition and lowered prices.

Currently, traditional players, new Chinese entrants, and local startups like Salasa and CloudShelf are all competing for market share. Overseas powerhouses are also joining the fray. Abhishek Mittal, head of industrial advisory at JLL, noted significant investment from PIF-backed assets and other regional players, such as Agility from Kuwait. Gulf Islamic Investments, based in Dubai, recently partnered with LogiPoint to establish Grade A facilities in Riyadh and Jeddah.

Furthermore, more international players from Europe and the US are eyeing the market. Industrial rents in Riyadh, Jeddah, and Dammam have surged in recent months. CBRE reported an 8 percent increase in Riyadh, 3 percent in Jeddah, and 4.6 percent in Dammam during the first quarter of this year. Occupancy rates have hit record highs.

Logistic Sector in Saudi Arabia

Aramex’s general manager in Saudi Arabia, Al Nowaiser, projects 6 percent annual growth in logistics sector in Saudi Arabia over the next five years. Aramex plans to expand its domestic services, focusing on freight, warehousing, and express delivery. He noted a rising demand for dangerous goods warehousing and temperature-controlled storage, especially for perfumes and cosmetics. However, the market is oversaturated with general cargo dry warehouses that only meet basic requirements. There’s a clear lack of specialized warehouses, particularly those with pharmaceutical or cold chain capabilities.

As Saudi consumers increasingly shop online, especially for groceries, the demand for Grade A logistics buildings is rising. New investments in the logistics sector in Saudi Arabia are focused on expanding the supply of these high-quality facilities. Al Nowaiser pointed out that incremental rental costs are significantly impacting logistics service providers, becoming a growing concern. While Amazon is increasing its warehouse space in Saudi Arabia, Aramex relies on build-to-suit warehouses tailored to specific client needs.

Expansion of Ports and Logistics Business

In December 2023, the Saudi Ports Authority (Mawani) signed four contracts with private companies for maritime services at eight ports, with investments exceeding SAR1 billion ($267 million).

The contracts were signed with Zamil Marine Services and Naghi Marine Company. Zamil Marine Services will provide services at the Jeddah Islamic Port, Jazan Port, Ras Al Khair Port, King Fahd Industrial Port in Jubail, and Jubail Commercial Port. Naghi Marine will offer services at King Abdulaziz Port in Dammam, Yanbu Commercial Port and King Fahd Industrial Port in Yanbu.

These contracts will expand the partnership with the private sector, improve the operational efficiency of maritime services in ports, and renew the fleet through investment in 44 new maritime units,

Last May, Dubai logistics company DP World commenced work on a SAR900 million ($250 million) logistics park in Saudi Arabia’s Jeddah Islamic Port.

The new storage and distribution facilities, being developed along with state-backed Saudi Ports Authority (Mawani), will boost trade in the kingdom and the wider region.

The 415,000 sq m “greenfield” facility will provide 185,000 sq m of warehousing space and a multi-purpose storage yard, making it the “largest integrated logistics park in the kingdom.

Port Capacity of Saudi Arabia

In 2022, King Fahad Industrial Port (Yanbu) in Saudi Arabia had the highest capacity, valuing to 210 million tons. The total capacity of ports across the country had a capacity of 681 million tons, as of 2022.

The development of the maritime transport and logistics sector is a crucial pillar of Saudi Arabia’s transport strategy within the country’s development plan, Saudi Vision 2030. This is why Saudi Arabia is planning to increase port capacity to more than 40 million standard containers and its share of the trans-shipment market to 45 percent as part of its economic development plans. Investment in port facilities and new liner services contributed to a solid increase in seaport throughput.

The Red Sea coastal region features heavily in the giga-projects at the heart of the plan to diversify the Saudi economy, including Neom in north-west Saudi Arabia, luxury resort Amaala, Jeddah Central, and entertainment and tourism centers in Jizan and Abha.

Furthermore, improvements to date are reflected in the steady rise in Saudi Arabia’s score in the quarterly Liner Shipping Connectivity Index (LSCI). The LSCI index is produced by the UN Conference on Trade and Development. The kingdom has closed the connectivity gap with the UAE. The UAE was the top performer among Gulf Arab states in the LSCI, since the first quarter of 2019.

In conclusion, Saudi Arabia’s transformation is driving demand across various sectors. The logistics sector, in particular, is seeing rapid growth as international and regional players invest in high-quality real estate. This demand extends beyond logistics, affecting the residential and office markets, especially in Riyadh.

Investment Opportunities in Iraq? For several decades Iraq had an economic framework based mainly on oil production and export. During the last few years, there has been an increase in the oil price of production and export followed by an increase in the GDP of the State. Iraq is recognizing the need for broader economic development to ease the State’s economic dependence on oil production.

Iraq is a strategically located nation with an educated and enterprising population and vast natural wealth. Iraq aims to boost the country’s economic performance through enhancing political stability and security, building and improving infrastructure, promoting investment in non-oil sectors, and supporting the development of the financial sectors.

The Iraqi government has undertaken steps to develop greater investments in the public and private sectors, thus contributing to the economic development that has characterized Iraq in recent years. This promises to further increase thanks to the incentives and strengthening projects planned for all the less developed sectors.

Foreign Direct Investment and Investment Opportunities in Iraq

In the global economy, foreign direct investment (FDI) is a key component in national strategies to achieve sustainable economic and social development. This has long been recognized by OECD countries, which are both the largest providers and largest beneficiaries of FDI worldwide. The experience of OECD countries suggests that there are, broadly speaking, two requirements for attracting high levels of FDI:

Building a stable environment conducive to business and investment through progressive macro-economic and structural policies, and legal frameworks; and
having the capacity to compete effectively on world markets for mobile FDI

After decades of war, sanctions, and destruction, Iraq needs significant investment inflows to rebuild its infrastructure, create employment, foster growth, and – in the case of FDI – transfer modern technology and know-how.

With improvements in Iraq’s security and economic stability, the Iraqi government now is to attract and build technical and scientific expertise, develop human resources, create job opportunities, and remove red tape.

Foreign investment is surging. Strategic and financial investors from around the world are seeking ways to invest in Iraq with reliable, experienced, well-connected partners. The Iraq reconstruction opportunity is singular in scale and scope. Iraq possesses what could prove to be the largest oil reserves in the world and it is the only important oil and gas producer in the world. Iraq has the potential and the intention to increase production by a factor of four or more times over the coming decade.

Business Establishment in Iraq

The steps to establish a company in Iraq do not last more than 30 days. First of all, the investor must choose a valid business name to be reserved later at the Baghdad Chamber of Commerce.

The company name must also be reserved for the Federation of Chambers of Commerce. In order to establish business in Iraq it is necessary to obtain, through a specific application, the certificate showing the regular registration of the company at the Companies Registry. For the eventual issuance of the certificate 15 days are required and counted from the day of taking charge of the request.

The investor will then have to create a seal that will be used to certify and protect the company’s most sensitive documents, guaranteeing their inviolability. This is a delicate phase that is completed in 48 hours.The establishment of a company process ends with the regular registration of all employees to the social security systems.

Possible Business Entities to Establish in Iraq

Limited Liability Company is the most common and widespread business entity in Iraq. LLC must be composed of at least two members, a shareholder and a director. At least 51% of the ownership of the company LLC must be Iraqi (the percentage value may vary in relation to the type of sector in which the company intends to operate)

A foreign investor can establish a Joint Stock Company in Iraq with at least four other members and five directors.
In Iraq it is possible to establish Branch Offices of Foreign Corporations in cases where these are necessary to support certain government functions or if they intervene to collaborate with companies that support government functions. A foreign investor who decides to establish a branch office in Iraq has the possibility to own it 100%.

One or more foreign companies may decide to join for a limited period in order to carry out a common project, thus establishing a Joint Venture (JV).In Iraq it is possible to establish a Joint Venture (JV) only if it is composed of at least an LLC or a JSC.

Sectors with Investment Opportunities in Iraq

Oil and gas sector
Infrastructure and construction sector
Healthcare
Agricultural sector
The sector of alternative and renewable energies

Oil and Gas

With the cost of oil and gas production in Iraq being among the lowest in the world, and having one of the largest oil reserves in the world, the opportunity in this sector is huge.

Infrastructure and Construction

There are plenty of investment opportunities in Iraq for those looking to invest in construction and infrastructure. The construction and engineering sectors are key to the reconstruction of houses, facilities, and infrastructure in Iraq. Iraq’s National Investment commission is also heavily seeking private investments in various infrastructure and housing projects, creating many opportunities for foreign investment.

Much of Iraq’s transportation infrastructure, constructed during the 1970s and 1980s, is now in dire need of substantial rehabilitation and replacement. Enhancing this infrastructure is crucial for integrating Iraq with other markets across the Middle East and Europe.

The Iraqi Government has initiated plans to develop new railway systems and port facilities, as well as to upgrade existing roads and aviation infrastructure. These initiatives have resulted in increased investment opportunities, facilitating the transfer of knowledge and expertise in areas such as technical infrastructure, operations and management, security, and concessions for various modes of air, land, and sea transportation.

Healthcare

Despite great measure to improve a health sector that provides universal free care, it has yet to recover from decades of conflict and neglect. To improve this situation the country needs tens of thousands of new doctors and more than 100,000 new hospital beds. A number of new contracts have been signed recently with international companies.

Agriculture

The agricultural sector is one of the main economic activities that contribute to a country’s national economy. However, this sector’s growth in Iraq is facing difficulties considering the decline of agricultural capital stock and its reliance on government investment, which is insufficient. Therefore, the government is actively looking for foreign direct investment in the agricultural sector.

Investing in this sector and implementing policies and programs to foster its growth and development would help fight the poverty in rural areas which is 30% twice of that in urban areas, it would also increase food security, meet domestic needs, and contribute to the exports.

Recently the agricultural sector in Iraq has been receiving growing attention led to initiate few projects for the cultivation of cereal crops, fruits, vegetables, and dates.in addition to raising livestock.

Alternative and Renewable Energies

It is not surprise to see investment opportunities in Iraq for the energy sector. Iraq, which has a population of 43 million, is sitting on 17 percent of the Middle East’s proven oil reserves and generates 80 percent of its power using fossil fuels.

At 1.43, the power score of Iraq is lower than the regional average of 1.74 in the Middle East region. Investment in clean energy in Iraq was around $1.8 million in 2022, a decrease of 10% from 2020 ($2 million). Between 2019 and 2022, the highest investment in clean energy was in 2019 at $184 million, while the lowest was in 2022 with $1.8 million.

Now, Iraq is planning to build solar plants and its first green hydrogen project as part of a strategy to tackle power shortages and reduce its carbon footprint. The country’s cabinet has approved a proposal to install 12 gigawatts (GW) of solar power by 2030.

How are we helping?

At Injaz Company we are supporting businesses to invest in Iraq, aligning with the interest from both the private and governmental sectors in Iraq.

Iraq is ranked fourth among 14 countries in the Arab real estate market for 2024. The real estate market in Iraq is experiencing a significant transformation, driven by increased foreign investment and a growing population. In 2024, the Real Estate market in Iraq is expected to reach a projected value of US$1.11tn. The real estate sector presents lucrative opportunities for investors.

Among the various segments within this market, Residential Real Estate is anticipated to dominate with a projected market volume of US$0.84tn in the same year. According to statistics issued by Statista, a German online platform that specializes in data gathering and visualization, it is projected that the market will experience a steady annual growth rate of 4.43% from 2024 to 2028 (CAGR 2024-2028). This is resulting in a market volume of US$1.32tn by 2028. This growth is fueled by an increasing population, with 57% under the age of 25 and a driving demand for housing.

Trend in Iraq’s Real Estate Market

In a trend observed among many Iraqis, people are increasingly opting to invest in land and real estate as their primary avenue for guaranteed returns, given the current landscape devoid of viable alternatives.

The real estate market presents itself as a flourishing sector with minimal risk of loss. This sentiment is largely attributed to Iraq’s substantial demand for over three million housing units, a figure that continues to surge amidst the rapid population growth.

Moreover, the real estate market in Iraq adheres to an open market policy, where prices are dictated by supply and demand, with minimal government intervention.With substantial demand within urban areas, prices have steadily climbed over the past four years, reaching unprecedented heights.

Challenges in Iraq’s Real Estate Market

Despite the promising growth, the Iraqi real estate sector faces several challenges:

The process of obtaining necessary permits and approvals for real estate transactions and developments can be cumbersome and time-consuming.
The real estate market in Iraq suffers from a lack of reliable information and data, making it difficult for investors to make informed decisions.
Infrastructure development is uneven across the country, with some areas lacking basic amenities such as roads, water supply, and electricity.
The market operates on a 100% cash-based system. Using this system can be difficult for international buyers with large transactions. In the case of international bank transfers, this can be costly in bank fees and cause delays.
Real Estate agents often charge fees to both sellers and buyers. This increases the cost of transactions.

The construction sector in Saudi Arabia is experiencing unprecedented growth. The numerous cranes decorating the Kingdom’s cities’ skylines make this clear. Skilled talent, strategic investments, and innovative companies are driving this surge. These elements create a robust foundation for the sector’s expansion.

Saudi Arabia to Become the World’s Largest Construction Sector by 2028

Saudi Arabia’s ambitious mega and giga projects lie at the heart of this boom. Projects like Qiddiya, Red Sea, and Amaala are transforming the country’s infrastructure. They generate millions of jobs and attract global attention. The Kingdom is also preparing for major events like Riyadh Expo 2030 and FIFA World Cup 2034. These preparations further fuel construction and open doors for new market entrants.

Key Highlights

– Saudi Arabia boasts the largest project pipeline in the region, valued at approximately $1.5 trillion.
– The construction sector is projected to reach $181.5 billion by 2028.
– In 2023 alone, Riyadh secured the majority of $140 billion in construction contracts.
– Between 2021 and 2025, the total value of awarded projects is expected to hit $569 billion.

A Growing Business Appetite and Urgency in the Construction Sector in Saudi Arabia

The construction sector in Saudi Arabia has an optimistic outlook. It is on track to become the world’s largest by 2028, ahead of the Vision 2030 timeline. This growth enhances economic opportunities and lays the groundwork for sustained prosperity.

Global companies like Grankraft, Waagner Brio Steel and Glass, and WBG lead this expansion. They bring diverse expertise and capabilities to the Saudi market. Supported by local teams, these industry leaders drive innovation and growth. The market size is expected to grow by 30% from 2023 to 2028. This demonstrates the sector’s robust health and the need to foster an environment conducive to business innovation.

Expedited awarding of public project contracts sparks significant interest from international businesses. This interest is reflected in the $569 billion worth of projects awarded between 2021 and 2025. Rapid urbanization and population growth increase the demand for residential and commercial properties. This continues to attract new players to the market. The real estate sector contributed 12.2% to Saudi GDP in Q3 2023. Its GDP contribution is expected to rise from 6% to 10% by 2030.

Riyadh: The Epicenter of Saudi Arabia’s Construction Boom

Riyadh has emerged as the focal point of the construction boom. The government aims to boost the city’s population to 10 million by 2030. This ambition makes Riyadh a prime destination for international companies seeking construction contracts and participation in its transformation.

In 2023, Riyadh secured construction contracts worth over $140 billion. The city also serves as the base for international corporations that have recently established operations in Saudi Arabia through the “Regional Headquarters” program. This program offers significant incentives, including tax breaks and exemptions from Saudization requirements, to attract businesses to set up offices in the Kingdom.

Tourism: A Catalyst and Beneficiary of the Construction Surge

The construction sector’s economic impact extends beyond direct contributions. It fosters growth in key industries like tourism. The hospitality sector is expanding rapidly to meet increasing travel demand. By 2030, Saudi Arabia aims to welcome 150 million domestic and international tourists. The Kingdom plans to add 320,000 new hotel rooms to accommodate this influx. These rooms will cater to diverse visitor needs.

This growth necessitates a skilled workforce and global expertise. The development of the hotel construction space drives these efforts. The government’s goal of tourism contributing 10% to the economy by 2030 hinges on these developments.

The thriving economy and expanding business opportunities make the Saudi construction industry a magnet for international firms. Extensive and varied construction activities across Riyadh and other regions attract companies eager to contribute to the Kingdom’s sustainable development model. As the sector continues to grow, it becomes increasingly intertwined with Saudi Arabia’s economic prosperity and diversification goals outlined in Vision 2030.

In summary, the construction sector in Saudi Arabia drives the Kingdom’s march toward economic prosperity. Skilled talent, strategic investments, and forward-thinking companies propel its growth, positioning the sector for continued dynamism and expansion.

Expand Your Construction-Focused Company to Saudi Arabia

Investment in Kurdistan presents great opportunities. The region offers a favorable investment environment due to its distinct 2006 investment law, which provides foreign investors full property ownership, capital repatriation, and tax holidays.

The Kurdistan Region of Iraq (KRI) is an autonomous territory in northern Iraq, strategically located at the intersection of Europe, Asia, and the Middle East. Governed by the Kurdistan Regional Government (KRG), the region has its own legislative authority. It is recognized for abundant oil and gas reserves, fertile lands, and an investor-friendly climate. Additionally, it presents numerous investment opportunities across various sectors, including agriculture, industry, tourism, infrastructure, and services. With a population of 6.2 million, KRI’s growth potential is substantial, bolstered by its natural and human resources. Moreover, the KRG focuses on economic growth, security, and political stability, further enhancing its appeal to investors eyeing Iraq and the broader MENA region.

Why Investment in the Kurdistan Region?

Several factors make the Kurdistan Region a prime investment location. These factors include stability, rich natural resources, favorable investment laws, and a skilled workforce. Additionally, its strategic positioning, diverse sectors, and burgeoning local and regional demand are vital. Over the past two decades, the region’s economy has expanded significantly, with a GDP per capita of around $7,038 in 2022. Since 2006, investments totaling over $66 billion have flowed into KRI from both local and international investors. Consequently, the Kurdistan government actively seeks to attract further investment, providing dedicated support to facilitate the investment process.

Investment in Kurdistan

Agrifood Sector

Kurdistan’s fertile lands, temperate climate, and ample water resources create ideal conditions for producing various food crops and livestock. The regional demand for food is booming, making KRI a prime location for agricultural and food processing investments. Notably, Iraq imports over $1 billion in dairy products, 600,000 tons of meat, 3 billion eggs, and $700 million in fresh and processed fruits annually, despite favorable conditions for domestic production. Thus, investors with efficient production techniques can secure strong market positions due to the high import dependency.

Key Agrifood Investment Opportunities

Livestock and Dairy: Iraq imports more than $2 billion in meat, eggs, and dairy products annually, with an 8% annual growth in demand. KRI is ideal for cattle, sheep, goat, poultry, and fish farming investments.
Crop Cultivation: Key crops include grains like wheat, barley, and corn, along with fruits and vegetables such as pomegranates, apples, grapes, olives, and tomatoes. The government encourages investments in modern farming techniques and large-scale cultivation.
Food Processing: With significant amounts of processed foods imported into Iraq, there are opportunities to establish local processing and packaging facilities for meat, dairy, and vegetables. Other opportunities include logistics, animal feed manufacturing, and seed production.

Industry Sector

Fueled by oil and gas revenues and rising household incomes, demand for manufactured goods in Iraq is rapidly increasing. With abundant energy sources, local raw materials, and a favorable business environment, KRI is ideal for manufacturing operations aimed at the regional market.

Key Industry Investment Opportunities

Petrochemicals and Fertilizers: With Iraq importing over $2.5 billion in chemicals annually, KRI’s oil and gas reserves make it a prime location for petrochemical production.
Manufacturing: High demand exists for construction materials, vehicles, electronics, and consumer goods. Additionally, post-war reconstruction requires significant investments in infrastructure, further boosting demand for construction and manufacturing materials.

Investment in Kurdistan Tourism Sector

The Kurdistan Region, with its natural beauty and rich cultural heritage, attracts millions of tourists annually. The KRG has developed a robust hospitality infrastructure, including hotels, restaurants, and heritage sites. Furthermore, it has identified numerous sites for resort development.

Key Tourism Investment Opportunities

Resort Development: The government has earmarked around 40 high-potential sites for tourism development, with land and project plans already in place.
Hospitality Infrastructure: Investments in hotels, restaurants, and other tourist facilities are encouraged to cater to the growing number of visitors.

Service Sector

Kurdistan’s services sector has flourished over the last 15 years, now representing the largest segment of economic activity. The region is home to numerous banks, universities, telecom providers, and retail chains, attracting significant investment.

Key Service Sector Investment Opportunities

ICT: The rapidly growing ICT sector, supported by government initiatives and a tech-savvy population, offers opportunities in infrastructure development, software companies, and tech hubs.
Financial Services and FinTech: With the region’s financial services still underdeveloped, there are opportunities in banking, digital payment services, insurance, mortgage lending, and wealth management.

Infrastructure Sector

The KRG is committed to developing industrial zones, special economic zones (SEZs), and renewable energy projects to support economic growth. With a growing gap between electricity demand and supply, there is significant potential for renewable energy investments.

Key Infrastructure Investment Opportunities

Industrial Zones and SEZs: The government is seeking investors to develop proposed industrial zones across the region.
Renewable Energy: Opportunities exist in solar, wind, hydro, geothermal, and waste-to-energy projects, with attractive returns due to high demand and government support.

Transportation Sector

Significant improvements in transportation infrastructure have been made, but there is still a need for expansion to meet the demands of a growing economy. Investment opportunities include public transport systems, roads, railways, and air services.

Key Transportation Investment Opportunities

Public Transport: Projects include tramways, bus networks, and modern transport terminals.
Roads and Railways: Construction of highways and railways to connect major cities and neighboring countries.

Water System

KRI’s abundant water resources offer investment opportunities in dams, irrigation systems, and water supply schemes. Despite these resources, inefficient usage necessitates new investments to meet growing demand.

Key Water System Investment Opportunities

Water Projects: The government has plans for numerous ponds, dams, and irrigation schemes. This is why, the government is actively seeking investors to develop these projects under Public-Private Partnerships.

In conclusion, the Kurdistan Region of Iraq offers a wealth of investment opportunities across various sectors, driven by its rich natural resources, strategic location, and supportive government policies. Whether in agrifood, industry, tourism, services, infrastructure, or water systems, KRI stands as a promising destination for investors seeking growth and expansion.

Investing in the Kurdistan Region offers numerous advantages. The region’s stability and strategic location are key benefits. The Kurdistan Regional Government provides strong support and incentives for investors. The potential for growth in various sectors is immense. The local workforce is skilled and ready to contribute. These factors make the Kurdistan Region a prime destination for investment.

Injaz Company provides comprehensive consulting services in business and investment in Kurdistan. With a deep understanding of the local market and regulatory landscape, Injaz Company assists investors in navigating the complexities of establishing and growing their businesses. Our expert team is dedicated to delivering tailored solutions that help clients capitalize on the unique opportunities in the Kurdistan Region.

While it is about foreign company registration in Saudi Arabia, staying on top of the country’s licensing process is crucial for smooth business expansion and establishing a legitimate and compliant business process.

Saudi Arabia is a powerhouse, delivering strong growth and enhanced investment opportunities in a challenging 2024. Global confidence in Saudi Arabia’s financial stability and reform program is borne out by attracting more foreign direct investment. Securing a commercial license unlocks significant benefits and incentives. Read more to find out how you can register and license your foreign company in Saudi.

Saudi Arabia’s economy has demonstrated its resilience over the course of 2022 and into 2023. Growth has been sustained in the midst of global economic pressures, geopolitical instability and the wake of the Covid-19 pandemic.

Whilst most global economies experienced a slowdown in economic growth, Saudi Arabia saw a steady growth in GDP year on year in 2022, supported by non-oil private sector activity. The Kingdom’s GDP growth rate was the fastest-growing among the G20 countries in 2022.

Saudi Arabia’s strong economic stance, strategic location and business-friendly reforms attract high-growth companies. Securing a commercial license unlocks significant benefits and incentives, read more to find out how you can register and license your foreign company in Saudi.

Saudi Arabia’s prime geographical location and progressive business reforms are drawing high-growth companies from around the globe. By securing a commercial license in the Kingdom, businesses can unlock numerous benefits and incentives. This is what makes it essential for foreign companies to understand the registration and licensing process.

First, Saudi Arabia’s strategic position, combined with targeted sector-specific reforms and a dynamic business environment, makes it an attractive destination for companies with international ambitions. Acquiring a one-year commercial license is a vital initial step for any business looking to enter the Saudi market. This license not only provides legal legitimacy for business operations but also grants access to a wide array of incentives and support offered by the Saudi government.

Moreover, navigating Saudi Arabia’s licensing process is critical for seamless business expansion. It ensures a compliant and effective business setup, paving the way for success.

Advantages of Obtaining a Commercial License

Acquiring the legal authority to engage in business activities within Saudi Arabia.
Gaining exceptional access to incentives, services, and protection for intellectual property.
Improved opportunities for securing contracts and participating in tenders.

Step by Step Foreign Company Registration in Saudi Arabia

Required Documents

Certificate of incorporation.
A financial statement, memorandum of association and article of association.
Notarizing a power of attorney (POA) document from a public notary.

Process for Setting Up a Company in Saudi Arabia

There are three main stages for setting up a company in the Kingdom of Saudi Arabia.

Foundations of the Legal Entity
Authorization to Hire Staff
Acquiring Residency and Opening a Bank Account

Stage 1: Foundations of the Legal Entity (Projected timeline: 1 month)

1. Obtain a MISA Investor License

2. Name Reservation

3. Draft Local Articles of Association (AoA)Insight: The Articles of Association template is set up by law and companies are only able to adjust their general manager’s powers.

4. Commercial Registration (CR)

5. Chamber of Commerce (CoC) Registration

Stage 2: Authorization to Hire Staff (Projected timeline: 2 months)

6. Obtain a Company seal

7. Register with The Ministry of Labor

8. Register with the General Organization for Social Issuance (GOSI)

9. Register a National Address

10. Issue a GM Visa

11. Registration with the General Authority of Zakat and Tax (GAZT) and VAT Registration

Stage 3: Acquiring Residency and Opening a Bank Account (Projected timeline: 3 months)

12. Activate the Chamber of Commerce (CoC) Account

13. Obtain Health Insurance

14. Get a Medical Check-up

15. Issuing the GM’s Iqama

16. Register with the Muqeem portal for streamlined visa and residency management

17. Register with the Absher portal for an array of e-government services

18. Register with the Qiwa portal for business services designed for SMEs

19. Register with the Mudad Portal to manage essential municipal services for your company

20. Open a Bank account

At Injaz Company, we specialize in helping businesses expand into Saudi Arabia. We understand that ensuring compliance with the country’s industry-specific norms and regulations is vital for establishing a strong foundation for long-term economic success in Saudi Arabia’s growing economy.

By fostering local partnerships with setup specialists, we effectively guide businesses through the complexities of the market’s ever-evolving conditions. This strategic approach significantly enhances the growth prospects of companies choosing Saudi Arabia as their next business destination.

Ready to expand to Saudi? Contact Injaz Company today.

Your go-to-market insider in the Middle East

The topic of investing in Saudi Arabia has become a focal point of discussions within the business world. Saudi Arabia’s economy has demonstrated its resilience over the course of 2023 and into 2024. Growth has been sustained in the midst of global economic pressures, geopolitical instability, and the wake of the Covid-19 pandemic.

Saudi Arabia’s ongoing economic transformation, supported by commendable reforms under the Vision 2030 agenda and higher oil prices, has helped create high growth, record low unemployment, contained inflation, and strong external and fiscal buffers, while reducing reliance on oil.

The banking system remains on a strong footing. The aggregate capital adequacy ratio is strong, profitability—driven by net interest margins—is high and above pre-pandemic levels, and the NPL ratio is low and declining. While growth in mortgages has recently moderated, demand for project-related and consumer loans remains strong, helping offset the impact on profitability from rising funding costs linked to higher interest rates and a greater share of time and saving deposits in banks’ liabilities.

While higher oil prices and increased oil-driven exports account for much of the Kingdom’s growth, the nonoil economy has also demonstrated strength, buoyed by pro-business reforms that seek to diversify the economy and attract foreign private investment under the strategic roadmap of Vision 2030. Saudi Arabia is in the middle of an economic upswing, supported by higher non-oil activity, according to analysis by the Economist Intelligence Unit.

Saudi Arabia: Selected Economic Indicators, 2021–24

Population: 32.2 million (2022)

Quota: SDR 9,992.6 million (2.10% of total)

Main products and exports: Oil and oil products (79.5%)

Key export markets: Asia, the U.S., and Europe

9th

largest stock exchange by market capitalisation – Saudi Exchange

out of 64 – World Competitiveness Ranking (Overall) (IMD)

10.2 0%

growth in FDI inflows in Q1 2023 compared to Q1 2022

In this guide, we look at investing in Saudi Arabia, the Vision 2030 objectives, and recent business-friendly reforms that support the private sector. We also discuss key legal issues that foreign investors need to know about when considering investing in the Kingdom.

Key Facts About Vision 2030

Vision 2030 is an ambitious socio-economic reform program, with the purpose of creating an open Kingdom where business opportunities are diverse and abundant, education, employment, and career development opportunities are aligned, and economic growth is sustainable.
The three key themes of Vision 2030 are to foster an ambitious nation, a thriving economy, and a vibrant society. These broad themes are cascaded into 96 “Strategic Objectives” and 13 “Vision Realisation Programmes” (“VRPs”).

Vision Realisation Projects

Saudi Arabia’s large-scale “giga-projects” have been described by the Government as “the crown jewel of Vision 2030”. Designed to open new areas of economic activity, create jobs, and drive economic development, the projects span sectors, from energy to tourism.
Many giga-projects are large-scale infrastructure and construction projects, led by the PIF in partnership with the private sector.

The giga-projects are already stimulating the economy. The vast investment needed is driving both domestic and foreign investment. The human capability needed to bring the giga-projects to fruition is creating jobs and attracting international expertise, and it will serve to develop the skills and capabilities of Saudi nationals.

Looking ahead, the projects have the potential to re-cast the economic profile of Saudi Arabia and drive non-oil sector contribution to GDP for the long term.

The investment climate

Despite an uncertain global economic outlook in 2022, Saudi Arabia experienced a strong growth rebound. This contrasts with the stalling growth seen in the world’s three largest economies—the United States, China and the euro area.

Privatization and the growing private sector

The Privatisation Programme is one of the cornerstone programmes under Vision 2030. Privatisation initiatives are an important tool to enable the Government to realize several aims: to maximize revenues from state-owned assets, diversify the economy into new sectors, reduce historic dependence on oil, stimulate foreign investment and develop national capabilities.

Progressive legal reforms over the last few years have put in place some important pillars of the legislative framework to achieve these aims. Most recently, a new Companies Law introduced a modernized regime for local companies with effect from January 2023.

Privatization initiatives are typically carried out through public-private partnerships (“PPPs”) or the sale and lease of state-owned assets.

National Investment Strategy

A National Investment Strategy (Shareek) was launched in October 2021 to encourage investment in the Vision 2030 initiatives. Its aim is to accelerate the growth of the private sector by providing investment and broad based support across a number of pillars, ranging from financial to operational.

The goal is increasing contribution to GDP to 65 per cent by 2030. The program offers incentives and enable private investment of US$1.33trn (SAR 5trn) through until 2030.

As at April 2023, reports indicate that 28 companies have received SAR 192bn of investment the Shareek program. The Saudi Investment Promotion Authority (SIPA) was established by the Government of Saudi Arabia in August 2022, with a mandate to attract national and foreign investment as part of the National Investment Strategy.

Various drivers of continued growth include:

> elevated oil prices, which is providing additional liquidity for the government’s investment arms, such as the PIF;

> an increasingly sophisticated and diversified business environment, which is attracting foreign investment inflows (in particular from Asia);
> increased tax revenues following the tripling of the VAT rate to 15 per cent in 2020; and

> strong domestic demand, with steady population growth and the opening up of new sectors of the economy serving to stimulate spending.

Foreign Direct Investment

In driving private sector growth, foreign investment emerges as a fundamental force within Saudi Arabia’s economic framework. The Privatisation Programme, coupled with the liberalization of the Saudi Exchange and the establishment of Special Economic Zones, extends a compelling invitation to international investors. Inbound investment into Saudi Arabia has been affected by the slowdown of economic growth as a result of geopolitical tensions.

Despite a global downturn in FDI flows, Saudi Arabia defies the trend. The trend, investing in Saudi Arabia is witnessing a noteworthy surge during Q1 2023, signaling a promising trajectory of economic resilience and attractiveness to foreign capital.

While global FDI flows declined in Q1 2023 by 34.7 percent compared to Q1 2022 according to the OECD, FDI inflows into Saudi Arabia increased in the same period. Data published by the Ministry of Investment (“MISA”) in October 2023 shows that Saudi Arabia saw a growth rate in foreign direct investment (“FDI”) inflows of SAR 8.1bn in Q1 2023.

Saudi Arabia was the most targeted nation for M&A in the MENA region, with deal values of US$7bn, according to statistics published by MENA Investment Banking Review.

Investing in Saudi Arabia Special Economic Zones

When it comes to investing in Saudi Arabia, Special Economic Zones are one of the first questions that investors ask. The creation of SEZs, with bespoke regulations, is expected to boost investment further. Sector-based SEZs are a key tool to incentivize foreign investors to enter the local market. Moreover, SEZs have few or no restrictions on foreign investment and provide more favorable
regulatory and operating environments, including tax holidays.

The Kingdom’s first special economic zone, the Integrated Logistics Bonded Zone (ILBZ), focusses on providing integrated logistics. The ILBZ located adjacent to the King Khalid International Airport in Riyadh. Furthermore, four new SEZs, Ras Al-Khair Special Economic Zone, King Abdullah Economic City Special Economic Zone, Jazan Special Economic Zone and Cloud Computing Special Economic Zone were announced in April 2023.

Geographical Importance: Asia Investing Saudi Arabia

Saudi Arabia is a strategic location at the crossroads of three continents – Asia, Africa and Europe. This is why, the Kingdom is well placed to foster relationships across the globe.

It is clear that Saudi Arabia’s economic relationships are evolving closer to Asia. Whilst not displacing traditionally strong relationships with Western countries, deepening ties with the East are being driven by mutually beneficial trade and investment opportunities.

Inflows of investment and expertise from Asia are to a large extent attributable to economic diversification initiatives in Saudi Arabia and the Giga projects.

Outflows from goods trade to Asia are primarily in the oil and gas sector. For example, in 2021, the KSA was the largest supplier of oil to China. Moreover, renewable energy becoming increasingly significant as it contributes to Asia’s green agenda and plans for energy security in the future. Sovereign wealth funds are also looking East for investment opportunities.

Many opportunities for outbound investment are being led primarily by the PIF as well as companies such as Aramco and Dar Al Arkan. PIF has a focus on the infrastructure, energy, and renewables sectors. India, China and Malaysia are key destinations for investment in the Asia region.

China Investing Saudi Arabia

China is already one of Saudi Arabia’s largest trading partners. As at August 2023, China is the main destination for exports of Saudi Arabia, according to statistics released by the General Authority for Statistics.

In the first half of 2022, Saudi Arabia was the single largest recipient of investment from China at US$5.5bn. China was the top investor in Saudi Arabia by deal volume in Q2 2023, according to MISA.

More recently, Saudi Arabia signed 12 cooperation agreements worth in excess of US$1.3bn with Chinese companies and banks at an investment forum held in Beijing.

Saudi Arabia’s need for investment and expertise, in particular, in the technology, construction and infrastructure, logistics and renewables sectors, complements China’s Belt and Road Initiative (“BRI”) development strategy. China’s BRI aims to build connectivity and co-operation across the world. Since the launch of the BRI initiative, China’s foreign direct investment in Saudi Arabia has grown rapidly. In conclusion, closer coordination of the BRI and Vision 2030 is anticipated. This came in line with announcements following meetings between Crown Prince bin Salman and Chinese President Jinping in 2019.

"In a landscape of economic challenges, Saudi Arabia emerges as a formidable force, boasting robust growth and enticing investment prospects. With ongoing reforms driving momentum, the introduction of a new legal framework stands as a cornerstone of recent advancements in the local business sphere. Our commitment to understanding our clients' strategic objectives enables us to deliver unparalleled business development services."

Ugur Injaz

CEO

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Based in London, Injaz Company Consulting LTD is a trusted partner for companies seeking to establish a successful presence in the Middle East.