In February 2021, the Kingdom of Saudi Arabia introduced the Regional Headquarters Program (RHQ) to attract multinational corporations (MNCs) to establish their regional bases in the country. The RHQ program is formed to support, manage and offer strategic direction to its branches, affiliates and subsidiaries operating in the Middle East and North Africa (MENA) region. It is a collaborative effort between the Ministry of Investment (MISA) and the Royal Commission for Riyadh City (RCRC).
On 1 January 2024, the program took effect. In case you missed it, here’s what the RHQ program is:
Understanding the RHQ Program
The KSA government encourages companies associated with it to relocate their headquarters in Saudi Arabia, so they can capitalise on several opportunities and developments. Under the RHQ Program, foreign companies may be unable to enter into contracts with KSA government agencies and semi-government institutions or receive Saudi government funding if they do not have a regional headquarters established in Saudi Arabia starting January 2024.
The initiative signals a significant shift in policy as only MNCs with regional headquarters located in the Kingdom will be allowed to do business with Saudi government agencies. Moreover, this action supports Saudi Arabia’s strategic objective of becoming a major global commercial hub. It promotes MNC investment in the Kingdom, supporting the goals of economic diversification outlined in Vision 2030. As they anticipate future regional market trends, MNCs have the opportunity to build long-term strategic alliances and get access to a growing market.
The key benefits under the RHQ program
The RHQ Program offers multinational companies the opportunity to build a significant presence in the Kingdom. One of the key benefits of the RHQ program is the tax incentives it offers. Under the program, companies are eligible for a renewable thirty-year period of zero percent corporate income tax, to attract significant foreign investments. Another benefit is the zero percent withholding tax on eligible activities, enhancing profitability. In addition, a 10-year exemption offers greater flexibility when hiring international talents. The benefit of unrestricted work visas also enables global talent mobilisation.
How to qualify for the program
How to set up RHQ
There are two main steps involved in establishing an RHQ in KSA. A company (a) may apply for the MISA licence and (b) incorporate the RHQ entity in KSA as a branch office or a limited liability company. MISA waived the attestation requirements that apply to documents coming from outside KSA in order to streamline the licensing procedure and make it easier for investors.
Why partner with Bolder Group
With the largest economy in the MENA region and the 18th largest globally, Saudi Arabia is progressively establishing itself as an international economic hub. As a reliable partner, Bolder Group is equipped to help multinational companies capitalise on the opportunities offered in the Kingdom.
Through our partnership with law firm Levari Law, we can assist clients in understanding and taking advantage of the benefits of the RHQ program and entering the Middle Eastern market, specifically Riyadh, Dubai and Cairo. Partnering with Bolder and Levari Law will give you access to our personalised solutions, helping you navigate the legal framework and uncover opportunities to establish or relocate your regional headquarters in the KSA.
Get in touch with us to learn how you can grow your business in one of the most progressive regions in the world.
To learn more about Levari Law, visit www.levarilaw.com.
Bolder Group does not provide financial, tax or legal advice and the information contained herein is meant for general information purposes only. We strongly recommend that before acting on any of the information contained herein, readers should consult with their professional advisers. The Bolder Group accepts no liability for any errors or omissions in the information, or the consequences resulting from any action taken by a reader based on the information provided herein.
Bolder Group refers to the global network of independent subsidiaries of Bolder Group Holding BV. Bolder Group Holding BV provides no client services. Such services are provided solely by the independent companies within the Bolder Group which are each legally distinct and separate entities and have no authority (actual, apparent, implied or otherwise) to obligate or bind Bolder Group Holding BV in any manner whatsoever. The operations of the Bolder Group are conducted independently and have no affiliation with third party financial, tax or legal advisory firms or corporations.