Top 7 Cities for Starting a Small Business in Saudi Arabia

Saudi Arabia business setup If you want to start a small business in Saudi Arabia, it is highly rewarding because of the business-friendly government policies. However, your business success also depends on the city you choose.

Whether you want to shift your business operations to Saudi Arabia or want to set up your startup, having extensive knowledge about these cities will help you a lot. There are many thriving cities in Saudi Arabia that support small businesses and entrepreneurs extensively.

Through this article, we will take a look at them to guide you on your small business in Saudi Arabia, the business environment in Saudi Arabia, and list the top cities in Saudi Arabia for your business.

Market Demand in Saudi Arabia: An Overview

Saudi Arabia’s business market is thriving particularly in Riyadh and it is all due to various business-friendly initiatives by the Saudi Arabia government. Programs like ‘Program HQ,’ are offering lucrative opportunities for several renowned international companies as well as entrepreneurs and small businesses in Saudi Arabia. Not only does it generate Saudi Arabia’s economic growth but also creates market demand in Saudi Arabia for jobs for millions of people.

Currently, there is a high demand for Grade A offices in big cities like Riyadh and Jeddah, however, the retail industry in Saudi Arabia is stagnant due to the people’s habits for digital shopping post-pandemic. However, the e-commerce sector is promising with massive growth. Also, the hospitality sector in Saudi Arabia is also rapidly growing due to international events, cultural promotion, and tourism of course. Saudi Arabia is aiming to increase its tourist visits by 150 million by 2030.

Business Environment and Regulation in KSA

Saudi Arabia is one of the countries in the Middle East region with 17% of the world’s oil reserves and that is why it is the largest economy in the region. Also, the government of Saudi Arabia with Vision 2030 is committed to encouraging investments from all over the world to grow the private sector.

Business Environment in Saudi Arabia has noticeably boomed in recent years with lucrative business opportunities on local and international level. Especially, small businesses in Saudi Arabia are thriving due to increased tourism, investments, and lenient tax policies. Tayseer, i.e., Executive Committee for Improving Private Sector Businesses Led by Ministry of Commerce and Investment is formed with the aim to enhance the performance of small businesses in Saudi Arabia that aligns with Saudi Vision 2030. There are over 300 initiatives planned by the regulatory to boost business in the Kingdom.

Also, through MERAS Platform, the facilitation of starting a business within a day is provided. Also, the regulatory authorities create policies to expedite Visa Processing to provide business visa Saudi Arabia and commercial activities within 24 hours.

With this kind of thriving business environment, you can grow your business easily in top cities in Saudi Arabia and get success as early as possible.

Top Cities That Are Ideal For Small Business In Saudi Arabia

top cities of saudi arabia

Saudi Arabia is all set to become a hot spot for business and commercial activities due to several structural and legal reforms under the Saudi Vision 2030. The government is providing lucrative tax benefits, letting various foreign companies move their headquarters in Saudi Arabia, offering specialized incentives, and whatnot; Saudi Arabia is steadily emerging as the prominent choice for corporations and businesses in the Middle East region. Here are the top cities in Saudi Arabia for you to consider for investing your capital:


Riyadh is the capital of the Kingdom of Saudi Arabia and it has become the favorite spot for various international corporations, MNCs, and foreign investors to set up headquarters or offices in it. As the capital city of Saudi Arabia, Riyadh is arguably the fastest-growing metropolis in the world and is home to over 6 million populations which is expected to reach 8 million by 2030.

According to a UK-based card payment startup Dojo, Riyadh is the 14th most ambitious place for entrepreneurs in the world. There are five facts that support this research:

  • The increase in new business registrations
  • The establishing cost of a company is too low
  • The GDP per capita is really high
  • A large percentage of the population has access to quality education
  • Massive increase in Google searches for small business in Riyadh, Saudi Arabia

If you want to start your small business in Saudi Arabia, Riyadh is the top suggestion for our side.


Jeddah is Saudi Arabia’s second-most populous city after Riyadh with around 4 million of population. The largest port of the Red Sea is in Jeddah, which makes it a focal location for businesses in the KSA.

Jeddah is the go-to city for all pilgrims who want to travel to the holy cities of Makkah and Medina in Saudi Arabia for Hajj (the annual Islamic Pilgrimage). Jeddah is currently going through a massive transformation when it comes to infrastructure development and related work.

As Saudi Arabia has proposed Vision 2030, the King Abdul Aziz International Airport of Jeddah is also going through renovation to facilitate the tourism and hospitality industry in Jeddah.

As the population is rapidly increasing in Jeddah, it is a lucrative opportunity for real estate businesses to invest in this cosmopolitan. Also, foreign investors find Jeddah as their land because of the existence of a large number of foreigners in the city.

That is why it is one of the most crucial cities for starting small businesses and flourishing with time as reforms under Vision 2030 are extremely supportive for startups and businesses in the long run.


Dammam is famous due to it being the world’s largest oil reserves and that is why businesses related to oil are settling there rapidly as it is very convenient for oil industries to set their administrative headquarters there. Additionally, small business in Saudi Arabia for pallet racking can grow really well in Dammam.

Although Dammam is an oil-rich province, its location is really ideal as it is located near Kind Abdul Aziz Port. This is why it is best for businesses related to manufacturing and exporting. Keep in mind that the job opportunities in Dammam are fewer, however business opportunities are immensely growing.


The constant inflow of Muslim pilgrims from all around the world in Makkah makes this Holy City best for small business in Saudi Arabia. There are so many year-round business opportunities here. From hospitality, and accommodation to food and retail businesses, Makkah is highly rewarding if you want to establish your small business.

Although the foreign investors, foreigners, and common tourism here are less, businesses can still thrive really well by providing services to millions of visitors that this Holy city annually hosts. This whole situation makes Makkah one of the top cities in Saudi Arabia to start your small business.


Medina is a city with a combination of old and new cultures. Businesses related to tourism, hospitality, food, transportation, and retail can succeed here effortlessly. It is the city’s historical importance and geography that make it ideal for starting a business in Medina because pilgrims from all over the world pour in here in millions.

Medina is also a Holy City and pilgrims here buy gifts and related items extensively. You may find a plethora of ideas for small businesses in Saudi Arabia, especially in Medina, and start your journey with 100% success potential.


With pleasant weather conditions and natural beauty, Taif is a favorite location for people in Saudi Arabia for a little escape from the daily routine. Taif is famous as the City of Roses and is known for its rose farming and perfumeries.

With cultural festivals like the Souq Okaz and the Crown Prince Camel Festival in August, Taif is also ideal for small businesses related to tourism, hospitality, and related services. Also, Taif is suitable for farming and agriculture. One can invest in fertilized land to start agribusiness there.


Jubail is the industrial hub of Saudi Arabia and industries related to heavy-duty manufacturing, and petrochemicals are situated there. Also, it is a port city on the shores of the Arabian Gulf. As an industrial city, Jubail has top-notch infrastructure for companies and is also included in the zones where the government provides incentives.

Although there are many heavy industries there in Jubail, you can start small industries there to support the already thriving industry zone of Saudi Arabia.


As the world is eyeing Saudi Arabia as the hub of business and commercial activities, the structural and legal reforms supporting the Saudi Vision 2030 are attracting more investors to the country. If you want to start a small business in Saudi Arabia, the tax benefits are lucrative, specialized incentives will be provided, and you will succeed without any doubt.

We have listed the top cities in Saudi Arabia for you to consider starting your small business and we hope you got an idea where to start from. So what city you are choosing for your next venture? Do let us know. For more updated blog post related to businesses and more, visit our insightful blogs section.

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