How to setup a Regional Headquarters in Saudi Arabia
Saudi Arabia’s rapidly growing economy, the largest in the MENA region and the 18th largest in the world, presents an ideal destination for businesses looking to expand in the Middle East. The Kingdom's robust economic growth, fuelled by various sectors and ambitious national development plans, has created numerous opportunities for foreign investors. With strategic trading opportunities, a favourable business environment, and a strong commitment to economic diversification, Saudi Arabia offers a compelling landscape for companies looking to establish their RHQ and leverage the Kingdom's dynamic market for regional expansion and success.
Why invest in a Regional Headquarters in Saudi Arabia?
Saudi Arabia is currently undergoing a rapid economic transformation. Through the creation and implementation of an ambitious economic transformation plan known as Vision 2030, the Kingdom is diversifying its economy, reducing dependence on oil revenues, and creating a thriving and sustainable non-oil sector. The implementation of various initiatives and reforms has attracted investments in sectors such as technology, renewable energy, tourism, entertainment, healthcare, manufacturing, and logistics, driving significant economic growth and opening up new opportunities for both local and foreign businesses.
Under the Vision 2030 project, Saudi has over $3 trillion worth of investments planned, with groundbreaking megaprojects including Neom, a zero-carbon, fully automated smart city and The Line, a 500m tall, mirrored city, run by artificial intelligence, set to transform the Kingdom and generate a multitude of investment opportunities.
Now the Kingdom is looking to attract multinational enterprises to relocate their regional headquarters and use the country as a base for their operations through its RHQ programme.
The RHQ programme in Saudi Arabia
The RHQ programme was established in 2021as a joint initiative between the Ministry of Investment (MISA) and the Royal Commission for Riyadh City (RCRC) and participation in it is now a prerequisite for companies that want to participate in government contracts.
The programme dictates that any foreign entities wanting to do business with Saudi Arabian authorities and government bodies must have their regional headquarters in the Kingdom. The RHQ policy is expected to be passed into law by 1 January 2024, meaning that any multinational corporations that wish to be eligible for government procurement must act quickly to ensure compliance with RHQ policy.
Why set up a RHQ in KSA?
In addition to being able to bid for government contracts, it is anticipated that registering a RHQ in Saudi Arabia may provide a number of other financial, taxation and immigration benefits, expected to include:
- Exemption from Saudisation requirements for a period of 10 years
- Eligibility for work visas for professions normally restricted only to Saudi nationals
- Eligibility to obtain unlimited work visas for employees under the RHQ entity.
- Exemption from professional accreditation requirements normally applied in the Kingdom.
- Allowance of spousal work permits and age of male dependants increased to 25 years old.
- Waiver of MISA subscription fees
- Access to MISA ‘end-to-end services
Saudi Arabia has announced they will be providing companies establishing an RHQ a 30-year corporate tax ‘holiday’.
What are the requirements to register a RHQ in Saudi Arabia?
A Regional Heaquarters (RHQ) represents a division of a multinational entity, which is properly established in accordance with legal regulations within Saudi Arabia, with the primary objective of providing support, management, and strategic guidance to its branches, subsidiaries, and affiliates operating within the Middle East North Africa (MENA) region.
In order to qualify and apply for a RHQ licence, the investor and company will be required to submit the following documents:
- The investor should possess a minimum of two subsidiaries or branches of the multinational group situated in two different countries other than Saudi Arabia and the country where the group is incorporated.
- The RHQ must have its distinct legal identity and operate as a registered foreign company within the jurisdiction of the Kingdom of Saudi Arabia.
- The RHQ may not conduct any commercial operations in KSA but must have a physical presence in the country which functions as a central administrative authority in the region.
- Completed RHQ licence application form.
- A business development plan.
- Attested commercial registration of the applicant company.
- Annual audited financial statements for the fiscal year preceding the application date.
- Commence RHQ operations within 6 months from the issuance date of the license and establish 3 optional licensed activities chosen during the initial year of operation.
- Employ a minimum of 15 employees of which 3 are C-Suite level.
Other documents may be required depending on the specific tier of the RHQ licence being applied for.
How can PRO Partner Group help?
Any RHQ relocation requires in depth planning and preparation as well as an understanding of its implications on long-term business objectives and outcomes.
In order for your business to be best positioned to benefit from participation in any current or future government contracts, it’s advisable to engage a reputable corporate services provider with a local presence in KSA and access to key contacts and authorities.
PRO Partner Group has decades of experience in the Middle East market and connections with key authorities and government departments. We can guide your company through the legal and regulatory requirements of establishing a RHQ in Saudi Arabia, assisting with company registration, obtaining necessary licences and permits, compliance with labour laws and immigration regulations, and ensuring adherence to local corporate governance practices.
We can also advise on the optimal legal structure for the RHQ, taking into account factors such as taxation, liability, ownership, and operational flexibility and can assist with drafting legal documents, submitting applications, and managing the entire setup process.
If you need assistance with registering a RHQ in Saudi Arabia or any other related onshore or offshore company setup, restructuring, local partner or PRO support matter in Abu Dhabi, Dubai, the wider UAE, Oman, Qatar or KSA, then please do get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at email@example.com or complete the contact form below and we will be delighted to assist you.