Regional Headquarters (RHQ) in Saudi Arabia

The Saudi Program for Attracting Regional Headquarters of multinational corporations is a joint initiative of the Ministry of Investment (MISA) and the Royal Commission for Riyadh City. MISA issues the Regional Headquarters (RHQ) licence.

An RHQ is the Saudi entity a foreign multinational sets up to support, manage and strategically direct its branches and subsidiaries in the Middle East and North Africa. It is a headquarters, not a sales office: it may not run revenue-generating commercial operations beyond its licensed RHQ activities.

The program is for multinational groups. ZATCA's guideline asks that the group own at least two subsidiaries or branches in countries other than its home country and the Kingdom.

The RHQ must have its own legal personality in the Kingdom, either as a company or as a registered branch of a foreign company.

MISA's Investor Guide sets these commitments once the licence is issued:

• Start the mandatory RHQ activities within six months
• Start at least three of the optional activities within one year
• Employ at least 15 full-time staff within one year, including at least three at executive-director or vice-president level
• Carry out no revenue-generating commercial operations beyond the RHQ activities

To apply, MISA asks for commercial registrations from two different countries, attested by the Saudi embassy, and audited financial statements for the last financial year. The registration fee is set by MISA when it approves the application.

ZATCA's guideline for Regional Headquarters sets out a tax package for licensed RHQs, for 30 years and renewable:

• 0% income tax on eligible income from eligible activities
• 0% withholding tax on certain payments to non-residents: dividends, payments to related persons, and payments to unrelated persons for services the RHQ needs for its activities

The relief depends on economic substance in the Kingdom. ZATCA's conditions include a physical office in the Kingdom, board meetings held in the Kingdom, at least one director resident in the Kingdom, and income that comes from eligible activities.

The Saudi Press Agency has also reported support with access to international schools. Other benefits are sometimes mentioned, but we only list what an official source sets out in full; check with Mohla for the current position.

In 2021 the Kingdom announced that, from 1 January 2024, government agencies, institutions and funds would stop contracting with companies whose regional headquarters is outside the Kingdom. For many multinationals that work with the public sector, this is the reason to look at an RHQ. The detailed rules and exceptions are set by regulation, so check how they apply to your contracts.

Mohla Start handles a Regional Headquarters as one project with one team: we check your group's documents against MISA's conditions, prepare and file the application, set up the entity and its registrations, and prepare the files for your first employees. You follow each stage in your Mohla account.

Government fees are paid at cost. Mohla's own fee is in the written quote you receive before any work starts.