It has two different set of conditions, that both can be satisfied: One is only available to Nejd, and the other is available to all countries with an Arabic Culture.
Condition 1: Formation as Nejd
Condition 2: All other nations
The second condition requires that the forming nation have an Arabic culture as primary culture.
The cultures, which can form Arabia are Bedouin, Berber, Maghrebi, Mashriqi and Misri. Despite the fact, that Turkish and Azerbaijani is technically in the same culture group, The Ottoman Empire or Azerbaijan cannot form Arabia.
Then one have to live up to a list of requirements:
- sphere at least one other neighbouring Arabic nation, and
- have a relation of at least 100 with said nation.
- to be at peace.
If one owns another Arabic nation and is a great power, then one can release it. It will start in the sphere of the releasing nation and have a relation of 200, which satisfies all the conditions.
The decision changes the country to Arabia and adds all Arabian cultures as accepted. It also gives 20 prestige. The forming nation will lose all owned cores and will be unable to exist unless they have lost cores before the formation.