WHAT ARE THE MISA LAWS & REQUIREMENTS ON THE KSA REGIONAL HEADQUARTERS?
- The MNCs must have a minimum presence in two different countries, excluding Saudi Arabia and the country in which the headquarters of the Multinational Group is located, either through Subsidiaries or Branches.
- The RHQ is established as a separate legal personality in Saudi Arabia either as an LLC company or as a registered branch of a foreign company.
- Within a year after receiving the RHQ License, RHQ must deploy at least 15 full-time employees, including senior-level executives, during its business.
- Employees of RHQs who engage in required RHQ License activities must possess the necessary knowledge and abilities that were acquired at the Group’s corporate or other Regional Headquarters, where at least three employees must be at the Vice-President and Executive Director levels.
WHAT ARE THE ACTIVITIES MANAGED UNDER THE KSA REGIONAL HEADQUARTERS?
The mandatory RHQ activities are the provision of strategic direction and management functions. RHQ’s strategic direction functions include:
- Formulate and monitor the regional strategy.
- Coordinate strategic alignment.
- Use of local products and/or services.
- Support acquisitions, mergers, and divestments.
- Review financial performance.
RHQ management functions include:
- Business planning.
- Budgeting.
- Business coordination.
- Identification of new market opportunities.
- Monitoring of the regional market, competitors, and operations.
- Marketing plan for the region.
- Operational and financial reporting.
The RHQ must commence the mandatory activities within six months of issuing the License.
The optional RHQ activities are:
- Sales and Marketing Support
- Human Resources, and Personnel Management
- Training Services
- Financial Management, Foreign Exchange, and Treasury Centre Services
- Compliance and Internal Control
- Accounting
- Legal
- Auditing
- Research and Analysis
- Advisory Services
- Operations Control
- Logistics and Supply chain management
- International Trading
- Technical Support or Engineering Assistance
- Network Operations for IT System
- Research and Development
- Intellectual Property Rights Management
- Production Management, and Sourcing of Raw Materials and Parts
The RHQ must commence at least three optional activities within one year of issuing the RHQ License.
HOW TO SET UP A REGIONAL HEADQUARTERS IN SAUDI ARABIA?
WHAT ARE THE REQUIREMENTS TO REGISTER A REGIONAL HEADQUARTER IN SAUDI ARABIA?
- Applicant’s corporate documents, attested at the level of the Saudi embassy in the country of origin.
- Applicant’s certificate of registration or commercial license issued in two different countries, excluding Saudi Arabia and the country in which the headquarters of the Multinational Group is located, attested at the level of the Saudi Embassy in the respective countries.
- The annual audited consolidated financial statements of the last financial year of the applicant, attested at the level of the Saudi Embassy in the respective country.
WHY SETUP A REGIONAL HEADQUARTER IN SAUDI ARABIA?
Setting up a Regional Headquarter in Saudi Arabia has numerous benefits, some of them are as listed below:
- A 10-year exemption from the Saudisation requirements.
- There is no restriction on the number of work visa applications for RHQ employees.
- Tax exemption (which is 20% otherwise).
- The “Ajeer” program, which enables RHQ employees’ dependents to work and apply for jobs.
- If they have received the proper accreditation in their country of origin, RHQ staff are exempt from the Kingdom’s criteria for professional certification.
- An exemption from paying the MISA subscription fees for the following year.
HOW CAN WE HELP?
As of January 2024, businesses that do not establish a Regional Headquarters (RHQ) presence in Saudi Arabia will become ineligible to participate in government contract opportunities or submit bids for government projects, Therefore, it is crucial for investors to diligently assess their options and seek professional guidance to ensure full compliance with all relevant laws and regulations.
Creation Business Consultants will keep you well informed about the latest regulations that may affect your business in Saudi Arabia. Our team of experts will leverage our extensive experience to help you navigate recent changes while providing comprehensive guidance on managing your company in Saudi Arabia. Contact a member of our team to learn more about setting up a company in the UAE and Saudi Arabia, email us on [email protected] or call Saudi Arabia +966 54 995 2676 or UAE +971 4 878 6240.