Three Sectors Open to South Korean Investments in Saudi Arabia
Saudi Arabia opens energy, smart city, and manufacturing sectors to South Korean investors under Vision 2030’s diversification push.
Back in 2023, during the official visit of former South Korean president Yoon Suk Yeol to Saudi Arabia, the two countries signed several agreements and exchanged trade delegations.
A few months earlier, Korea's MSS and the Saudi Small and Medium Business Bank (SME Bank) established a joint fund worth $160 million to invest in and support Korean SMEs expanding in saudi Arabia.
The bilateral relations between the two countries have been going from strength to strength. As a result, South Korean companies are increasingly turning their gaze to Saudi Arabia, drawn by the proliferation of opportunities in manufacturing, IT, renewable energy and more.
With active government support, rising bilateral trade, and tangible projects already underway, now is the ideal time for Korean firms to set up a business in Saudi Arabia.
Clean Energy is at the Heart of Saudi-Korean Cooperation
As the global shift to clean energy accelerates, green hydrogen is becoming central to decarbonizing industries, transport, and power generation. Saudi has positioned itself as a future leader in this space, announcing some of the world’s largest projects, including NEOM’s $8.4 billion green hydrogen facility.
South Korean companies are actively engaging in this value chain: POSCO is collaborating with ACWA Power on hydrogen and derivatives, Hyundai is advancing hydrogen mobility partnerships, and firms like Doosan are developing turbine and electrolyzer technologies for Saudi projects.
Backed by abundant solar and wind resources, supportive policies, and growing industrial demand, Saudi Arabia is on track to become a global hub for green hydrogen, with strong export potential to Europe and Asia.
South Korean firms are finding multiple entry points in renewable energy generation and distribution, significantly contributing to Saudi’s sustainable energy future.
Advanced Manufacturing Is Opening Up Through Joint Ventures
With localization at the heart of Saudi industrial policy, Korean companies in shipbuilding, automotive, and semiconductor equipment are well-positioned to support Saudi Arabia’s push to build domestic manufacturing capacity.
Saudi is accelerating efforts to build up its manufacturing base under Vision 2030, opening the door for Korean firms to establish joint ventures and long-term contracts with Saudi counterparts.
One of the most significant South Korean investments in Saudi manufacturing is the joint venture between Hyundai Motor Company and the Public Investment Fund (PIF).
In October 2023, they signed an agreement to establish a vehicle manufacturing plant located in King Abdullah Economic City (KAEC), within the King Salman Automotive Cluster.
It is designed to produce 50,000 vehicles per year (both internal combustion engine and electric vehicles), with full production expected by late 2026. This project signals the Korean role in localizing component manufacturing, boosting the automotive ecosystem, and supplying jobs, training, and transfer of industrial know-how. The plant is Hyundai’s first facility in the Middle East.
Additionally, Samsung C&T Corporation has teamed up with NEOM to invest in construction automation technology, including robotics for rebar cage assembly, aiming to modernize and scale manufacturing techniques in Saudi Arabia.
This is a smaller-scale but technologically strategic investment in manufacturing processes rather than end goods.
South Korean Firms Ramp Up Presence in Digital Sector
Vision 2030 projects require advanced technologies in AI, IoT, cybersecurity, and mobility solutions. Korean enterprises and startups can provide expertise in robotics, automation, and smart systems for the Kingdom’s rapidly growing cities.
Saudi Arabia’s information technology (IT) industry is growing rapidly owing to rising digital demand and strong government policies under Vision 2030. This creates very attractive opportunities for Korean investors who want exposure to revenue growth, workforce expansion, and innovation.
South Korean firms are increasingly present in this landscape and are positioning themselves as key players.
For example, Naver Corporation is establishing its Middle Eastern regional headquarters (“Naver Arabia”) in Saudi Arabia to lead smart city, cloud, and robotics projects. One of Naver’s major contracts is a $100 million digital twin platform JV with Saudi entities, including the National Housing Company and the Ministry of Municipal Rural Affairs & Housing, to build digital twin systems across Riyadh, Jeddah, Mecca, Medina, and Dammam. In that project, Naver will also establish cloud regions locally.
South Korean companies are directly investing in digital infrastructure. A prime example is the signing of an MoU between South Korean telecom company KT, Hyundai Engineering & Construction (Hyundai E&C), and Saudi Arabia’s stc Group.
This partnership, covering a 50-year horizon, aims to build Internet Data Centers (IDCs) and smart city platforms and strengthen foundational digital networks in line with Saudi Vision 2030.
These South Korean investments underscore that IT sector opportunities in Saudi exist in emerging spaces like cloud infrastructure, digital twin platforms, smart city tech, R&D presence, robotics, and workforce development, which are all in play.
Business Setup in Saudi Arabia from South Korea: Overview of Necessary Steps
Entering the Saudi market requires navigating a structured legal and administrative process. South Korean companies typically follow these steps:
Phase 1: Establish Your Legal Entity (1 Month)
The journey begins with creating a strong legal framework to support future operations.
- Obtain a MISA Investor License
- Name Reservation
- Draft Local Articles of Association (AoA)
- Secure Commercial Registration (CR)
- Obtain the Chamber of Commerce (CoC) Registration
Phase 2: Authorize Operations and Build Your Team (2 Months)
Once the entity is established, the next step is preparing for operations and workforce onboarding.
- Obtain a company seal
- Register with the Ministry of Labor
- Register with the General Organization for Social Insurance (GOSI)
- Register a National Address
- Issue a GM Visa
- Registration with the General Authority of Zakat and Tax (GAZT) and VAT Registration
Phase 3: Finalize Residency and Banking Setup (3 Months)
The last stage ensures the business becomes a fully functional commercial entity.
- Activate the Chamber of Commerce (CoC) account
- Obtain Health Insurance
- Get a Medical Check-up
- Issuing the GM's Iqama
- Register with the Muqeem portal
- Register with the Absher portal
- Register with the Qiwa portal
- Register with the Mudad Portal
- Open a bank account
Frequently Asked Questions
Can a foreigner set up a company in Saudi Arabia?
Yes, but only under certain conditions. Foreign investors can set up a fully foreign-owned company (such as an LLC) if they either obtain a support letter from a government entity (such as MISA, PIF, CODE, KAUST, or TDF) or possess a registered patent.
How to set up a business in Saudi Arabia?
In the initial stages of expansion to Saudi Arabia, Asian companies, including those from South Korea, typically focus on setting up the core foundations of their business. This involves securing the right licenses, establishing a legal entity, opening a corporate bank account, and putting in place essential compliance measures such as VAT registration and payroll management.
Can a foreigner own 100% of a business in Saudi Arabia?
Yes, in many sectors, foreigners can own 100% of a company. But conditions and restrictions depend on the sector.
How much does it cost to set up a business in Saudi Arabia?
The first‐year operational costs (license, registration, compliance, etc.) for a foreign business can be around SAR 550,000 for many setups.
Is Iqama free in Saudi Arabia?
No, fees are required to issue and renew the Iqama.
How long does it take to get an Iqama in Saudi Arabia?
Your Iqama can be issued within 1-2 working days.
How much does an Iqama cost?
The fee for issuing or renewing the one-year Iqama is SAR 650. The three-month Iqama renewal fee is SAR 163, while the six-month Iqama renewal fee is SAR 325.
Can non-Saudis do business in Saudi Arabia?
Yes—non-Saudis can do business. Foreign companies and individuals may establish businesses in Saudi Arabia under specific rules, often via a license from the Ministry of Investment (MISA).
