{"id":14256,"date":"2023-10-18T15:09:41","date_gmt":"2023-10-18T15:09:41","guid":{"rendered":"https:\/\/www.creationbc.com\/?p=14256"},"modified":"2025-12-21T19:53:16","modified_gmt":"2025-12-21T19:53:16","slug":"strategic-expansion-how-to-establish-a-regional-headquarter-in-saudi-arabia","status":"publish","type":"post","link":"https:\/\/www.creationbc.com\/en-sa\/news\/strategic-expansion-how-to-establish-a-regional-headquarter-in-saudi-arabia\/","title":{"rendered":"STRATEGIC EXPANSION: HOW TO ESTABLISH A REGIONAL HEADQUARTER IN SAUDI ARABIA"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 ez-toc-wrap-left counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.creationbc.com\/en-sa\/news\/strategic-expansion-how-to-establish-a-regional-headquarter-in-saudi-arabia\/#REQUIREMENTS_FOR_ESTABLISHING_AN_RHQ\" >REQUIREMENTS FOR ESTABLISHING AN RHQ<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.creationbc.com\/en-sa\/news\/strategic-expansion-how-to-establish-a-regional-headquarter-in-saudi-arabia\/#CORPORATE_SHAREHOLDER_REQUIREMENTS\" >CORPORATE SHAREHOLDER REQUIREMENTS:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.creationbc.com\/en-sa\/news\/strategic-expansion-how-to-establish-a-regional-headquarter-in-saudi-arabia\/#OPERATIONAL_ACTIVITIES\" >OPERATIONAL ACTIVITIES:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.creationbc.com\/en-sa\/news\/strategic-expansion-how-to-establish-a-regional-headquarter-in-saudi-arabia\/#EMPLOYMENT\" >EMPLOYMENT:<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.creationbc.com\/en-sa\/news\/strategic-expansion-how-to-establish-a-regional-headquarter-in-saudi-arabia\/#WHAT_ARE_THE_ACTIVITIES_MANAGED_UNDER_THE_KSA_REGIONAL_HEADQUARTERS\" >WHAT ARE THE ACTIVITIES MANAGED UNDER THE KSA REGIONAL HEADQUARTERS?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.creationbc.com\/en-sa\/news\/strategic-expansion-how-to-establish-a-regional-headquarter-in-saudi-arabia\/#HOW_TO_SET_UP_A_REGIONAL_HEADQUARTERS_IN_SAUDI_ARABIA\" >HOW TO SET UP A REGIONAL HEADQUARTERS IN SAUDI ARABIA?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.creationbc.com\/en-sa\/news\/strategic-expansion-how-to-establish-a-regional-headquarter-in-saudi-arabia\/#WHAT_ARE_THE_REQUIREMENTS_TO_REGISTER_A_REGIONAL_HEADQUARTER_IN_SAUDI_ARABIA\" >WHAT ARE THE REQUIREMENTS TO REGISTER A REGIONAL HEADQUARTER IN SAUDI ARABIA?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.creationbc.com\/en-sa\/news\/strategic-expansion-how-to-establish-a-regional-headquarter-in-saudi-arabia\/#BENEFITS_OF_ESTABLISHING_AN_RHQ_IN_SAUDI_ARABIA\" >BENEFITS OF ESTABLISHING AN RHQ IN SAUDI ARABIA<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.creationbc.com\/en-sa\/news\/strategic-expansion-how-to-establish-a-regional-headquarter-in-saudi-arabia\/#TAX_BENEFITS_AND_INCENTIVES\" >TAX BENEFITS AND INCENTIVES<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.creationbc.com\/en-sa\/news\/strategic-expansion-how-to-establish-a-regional-headquarter-in-saudi-arabia\/#COMPLIANCE_WITH_ZAKAT_TAX_AND_CUSTOMS_AUTHORITY_ZATCA_TAX_REGULATIONS\" >COMPLIANCE WITH ZAKAT, TAX AND CUSTOMS AUTHORITY (ZATCA) TAX REGULATIONS\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.creationbc.com\/en-sa\/news\/strategic-expansion-how-to-establish-a-regional-headquarter-in-saudi-arabia\/#TRANSFER_PRICING_CONSIDERATIONS\" >TRANSFER PRICING CONSIDERATIONS<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.creationbc.com\/en-sa\/news\/strategic-expansion-how-to-establish-a-regional-headquarter-in-saudi-arabia\/#SELECTING_THE_TRANSFER_PRICING_METHOD\" >SELECTING THE TRANSFER PRICING METHOD<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.creationbc.com\/en-sa\/news\/strategic-expansion-how-to-establish-a-regional-headquarter-in-saudi-arabia\/#COST-PLUS_METHOD\" >COST-PLUS METHOD:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.creationbc.com\/en-sa\/news\/strategic-expansion-how-to-establish-a-regional-headquarter-in-saudi-arabia\/#OTHER_METHODS\" >OTHER METHODS:<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.creationbc.com\/en-sa\/news\/strategic-expansion-how-to-establish-a-regional-headquarter-in-saudi-arabia\/#TRANSFER_PRICING_TP_DOCUMENTATION_AND_COMPLIANCE\" >TRANSFER PRICING (TP) DOCUMENTATION AND COMPLIANCE<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.creationbc.com\/en-sa\/news\/strategic-expansion-how-to-establish-a-regional-headquarter-in-saudi-arabia\/#STRATEGIC_SIGNIFICANCE\" >STRATEGIC SIGNIFICANCE<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/www.creationbc.com\/en-sa\/news\/strategic-expansion-how-to-establish-a-regional-headquarter-in-saudi-arabia\/#Some_of_the_major_multinational_corporations_which_already_established_their_RHQs_in_Saudi_Arabia_or_obtained_licenses_include\" >Some of the major multinational corporations which already established their RHQs in Saudi Arabia or obtained licenses include:\u00a0<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/www.creationbc.com\/en-sa\/news\/strategic-expansion-how-to-establish-a-regional-headquarter-in-saudi-arabia\/#EXEMPTIONS_TO_THE_REGIONAL_HEADQUARTER_RHQ_MANDATE\" >EXEMPTIONS TO THE REGIONAL HEADQUARTER (RHQ) MANDATE<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/www.creationbc.com\/en-sa\/news\/strategic-expansion-how-to-establish-a-regional-headquarter-in-saudi-arabia\/#HOW_CAN_WE_HELP\" >HOW CAN WE HELP?<\/a><\/li><\/ul><\/nav><\/div>\n<p>[vc_row][vc_column][vc_column_text]This article was updated on June 13, 2024.<\/p>\n<p>&nbsp;<\/p>\n<p><strong><em><span class=\"s1\">This article has been researched and written by the Business Development &amp; Compliance Team at Creation Business Consultants. AI has not been used in generating this article.<\/span><\/em><\/strong><\/p>\n<p>&nbsp;<\/p>\n<p>In February 2021, the Saudi government declared its intention to restrict contracts with foreign firms that do not have Regional Headquarters (RHQ) in the Kingdom of Saudi Arabia (KSA). It was a drive to encourage Multinational Companies (MNCs) to move their RHQ to the Kingdom. The Ministry of Investment Saudi Arabia (MISA) came up with regulations regarding incentives for the RHQ program in February 2022. Earlier this year, MISA revealed tax incentives for RHQs; however, more clarity on this subject is awaited and more recently, premium residences for the RHQ executives. The blog details more on the MISA laws, activities managed under RHQ, the benefits and the requirements for RHQ in Saudi Arabia, etc.[\/vc_column_text][\/vc_column][\/vc_row][vc_row title=&#8221;BOOK A FREE CONSULTATION&#8221; style=&#8221;3d&#8221; gradient_color_1=&#8221;turquoise&#8221; gradient_color_2=&#8221;blue&#8221; gradient_custom_color_1=&#8221;#dd3333&#8243; gradient_custom_color_2=&#8221;#eeee22&#8243; gradient_text_color=&#8221;#ffffff&#8221; custom_background=&#8221;#ededed&#8221; custom_text=&#8221;#666666&#8243; outline_custom_color=&#8221;#666666&#8243; outline_custom_hover_background=&#8221;#666666&#8243; outline_custom_hover_text=&#8221;#ffffff&#8221; shape=&#8221;rounded&#8221; color=&#8221;grey&#8221; size=&#8221;md&#8221; align=&#8221;center&#8221; button_block=&#8221;&#8221; add_icon=&#8221;true&#8221; i_align=&#8221;right&#8221; i_type=&#8221;typicons&#8221; i_icon_fontawesome=&#8221;fas fa-adjust&#8221; i_icon_openiconic=&#8221;vc-oi vc-oi-dial&#8221; i_icon_typicons=&#8221;typcn typcn-chevron-right&#8221; i_icon_entypo=&#8221;entypo-icon entypo-icon-note&#8221; i_icon_linecons=&#8221;vc_li vc_li-heart&#8221; i_icon_monosocial=&#8221;vc-mono vc-mono-fivehundredpx&#8221; i_icon_material=&#8221;vc-material vc-material-cake&#8221; i_icon_pixelicons=&#8221;vc_pixel_icon vc_pixel_icon-alert&#8221; custom_onclick=&#8221;&#8221; link=&#8221;url:%2Fcontact-us%2F&#8221; custom_onclick_code=&#8221;&#8221;][vc_column][vc_btn title=&#8221;BOOK A FREE CONSULTATION&#8221; style=&#8221;3d&#8221; align=&#8221;center&#8221; i_align=&#8221;right&#8221; i_type=&#8221;typicons&#8221; i_icon_typicons=&#8221;typcn typcn-chevron-right&#8221; add_icon=&#8221;true&#8221; link=&#8221;url:%2Fen-sa%2Fcontact-us%2F&#8221;][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n<h2><span class=\"ez-toc-section\" id=\"REQUIREMENTS_FOR_ESTABLISHING_AN_RHQ\"><\/span><span style=\"color: #039c7f;\"><b>REQUIREMENTS FOR ESTABLISHING AN RHQ<\/b><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><a href=\"https:\/\/www.creationbc.com\/en-sa\/company-formation-saudi-arabia\/\">Setting up a Regional Headquarters (RHQ) in Saudi Arabia<\/a>\u00a0involves meeting specific requirements set by the Ministry of Investment (MISA). These include:<\/p>\n<h3><span class=\"ez-toc-section\" id=\"CORPORATE_SHAREHOLDER_REQUIREMENTS\"><\/span><b>CORPORATE SHAREHOLDER REQUIREMENTS:<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\">The multinational must have at least two subsidiaries located in two different countries other than Saudi Arabia and the country of incorporation.<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">The multinational company must provide 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.<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">The RHQ must maintain a physical office in Saudi Arabia.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"OPERATIONAL_ACTIVITIES\"><\/span><b>OPERATIONAL ACTIVITIES:<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\">Within six months of license issuance, the RHQ must start three mandatory activities, which could include administrative support, strategic planning, and regional coordination.<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">Within the first year, the RHQ must initiate three optional activities, including marketing, training, and IT support.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"EMPLOYMENT\"><\/span><b>EMPLOYMENT:<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\">The RHQ must employ 15 full-time staff within the first year of its incorporation, three of whom are at the executive level.<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">At least three employees must be at the Corporate Executive level, such as CEO, CFO, or Vice President.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2 class=\"p1\"><span class=\"ez-toc-section\" id=\"WHAT_ARE_THE_ACTIVITIES_MANAGED_UNDER_THE_KSA_REGIONAL_HEADQUARTERS\"><\/span><span style=\"color: #039c7f;\">WHAT ARE THE ACTIVITIES MANAGED UNDER THE KSA REGIONAL HEADQUARTERS?<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p class=\"p3\"><strong>The mandatory RHQ activities are the provision of strategic direction and management functions. RHQ\u2019s strategic direction functions include:<\/strong><\/p>\n<ul class=\"ul1\">\n<li class=\"li3\">Formulate and monitor the regional strategy.<\/li>\n<li class=\"li3\">Coordinate strategic alignment.<\/li>\n<li class=\"li3\">Use of local products and\/or services.<\/li>\n<li class=\"li3\">Support acquisitions, mergers, and divestments.<\/li>\n<li class=\"li3\">Review financial performance.<\/li>\n<\/ul>\n<p class=\"p3\"><strong>RHQ management functions include:<\/strong><\/p>\n<ul class=\"ul1\">\n<li class=\"li3\">Business planning.<\/li>\n<li class=\"li3\">Budgeting.<\/li>\n<li class=\"li3\">Business coordination.<\/li>\n<li class=\"li3\">Identification of new market opportunities.<\/li>\n<li class=\"li3\">Monitoring of the regional market, competitors, and operations.<\/li>\n<li class=\"li3\">Marketing plan for the region.<\/li>\n<li class=\"li3\">Operational and financial reporting.<\/li>\n<\/ul>\n<p class=\"p5\">The RHQ must commence the mandatory activities within six months of issuing the License.<\/p>\n<p class=\"p6\"><strong>The optional RHQ activities are:<\/strong><\/p>\n<ul class=\"ul1\">\n<li class=\"li3\">Sales and Marketing Support<\/li>\n<li class=\"li3\">Human Resources, and Personnel Management<\/li>\n<li class=\"li3\">Training Services<\/li>\n<li class=\"li3\">Financial Management, Foreign Exchange, and Treasury Centre Services<\/li>\n<li class=\"li3\">Compliance and Internal Control<\/li>\n<li class=\"li3\">Accounting<\/li>\n<li class=\"li3\">Legal<\/li>\n<li class=\"li3\">Auditing<\/li>\n<li class=\"li3\">Research and Analysis<\/li>\n<li class=\"li3\">Advisory Services<\/li>\n<li class=\"li3\">Operations Control<\/li>\n<li class=\"li3\">Logistics and Supply chain management<\/li>\n<li class=\"li3\">International Trading<\/li>\n<li class=\"li3\">Technical Support or Engineering Assistance<\/li>\n<li class=\"li3\">Network Operations for IT System<\/li>\n<li class=\"li3\">Research and Development<\/li>\n<li class=\"li3\">Intellectual Property Rights Management<\/li>\n<li class=\"li3\">Production Management, and Sourcing of Raw Materials and Parts<\/li>\n<\/ul>\n<p class=\"p5\">The RHQ must commence at least three optional activities within one year of issuing the RHQ License.<\/p>\n<p>&nbsp;<\/p>\n<h2 class=\"p1\"><span class=\"ez-toc-section\" id=\"HOW_TO_SET_UP_A_REGIONAL_HEADQUARTERS_IN_SAUDI_ARABIA\"><\/span><span style=\"color: #039c7f;\">HOW TO SET UP A REGIONAL HEADQUARTERS IN SAUDI ARABIA?<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul class=\"ul1\">\n<li aria-level=\"1\">Securing the initial investor license from the\u00a0<a href=\"https:\/\/misa.gov.sa\/\" target=\"_blank\" rel=\"noopener\">Ministry of Investment Saudi Arabia (MISA)<\/a>.<\/li>\n<li aria-level=\"1\">Name reservations according to the Commercial Companies\u2019 Law.<\/li>\n<li aria-level=\"1\">Commercial registration issuance from the\u00a0<a href=\"https:\/\/www.moci.gov.qa\/en\/\" target=\"_blank\" rel=\"noopener\">Ministry of Commerce and Industry (MOCI)<\/a>.<\/li>\n<li aria-level=\"1\">Registration with the\u00a0<a href=\"https:\/\/www.chamber.sa\/en\/Pages\/default.aspx\" target=\"_blank\" rel=\"noopener\">Chamber of Commerce<\/a>,\u00a0<a href=\"https:\/\/zatca.gov.sa\/en\/Pages\/default.aspx\" target=\"_blank\" rel=\"noopener\">Zakat, Tax and Customs Authority (ZATCA)<\/a>, etc.<\/li>\n<li aria-level=\"1\">Company bank account.<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">Ongoing compliance and reporting.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2 class=\"p1\"><span class=\"ez-toc-section\" id=\"WHAT_ARE_THE_REQUIREMENTS_TO_REGISTER_A_REGIONAL_HEADQUARTER_IN_SAUDI_ARABIA\"><\/span><span style=\"color: #039c7f;\">WHAT ARE THE REQUIREMENTS TO REGISTER A REGIONAL HEADQUARTER IN SAUDI ARABIA?<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul class=\"ul1\">\n<li class=\"li2\">Applicant\u2019s corporate documents, attested at the level of the Saudi embassy in the country of origin.<\/li>\n<li class=\"li2\">Applicant\u2019s 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.<\/li>\n<li class=\"li2\">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.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"BENEFITS_OF_ESTABLISHING_AN_RHQ_IN_SAUDI_ARABIA\"><\/span><span style=\"color: #039c7f;\"><b>BENEFITS OF ESTABLISHING AN RHQ IN SAUDI ARABIA<\/b><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The government of Saudi Arabia has comprehensive incentives that multinational businesses can apply for if they and their business meet certain criteria to establish their RHQ in the Kingdom. Incentives include:<\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><strong>Government Tendering:<\/strong> Bidding on government tenders.<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><strong>Saudization Exemption:<\/strong> 10-year exemption from Saudization.<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><strong>Visa and Work Permits:<\/strong> Exemptions on visa cap and fast track visas for employees, relocation permits for spouses and dependents and up to 25 years sponsorship for dependents.<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><strong>Professional Accreditation Waivers:<\/strong> Professional accreditation exemptions.<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><strong>Comprehensive Support Services:<\/strong> Services from start to end for commercial, personal and concierge needs.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"TAX_BENEFITS_AND_INCENTIVES\"><\/span><span style=\"color: #039c7f;\"><b>TAX BENEFITS AND INCENTIVES<\/b><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><strong>In Article 3, taxing regulations to the extent that the Regional Headquarters meets the eligibility criteria it is allowed:<\/strong><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\">Income tax exemption for 30 years, with renewal &amp; starting from the time it can obtain its license to undertake qualifying activities.<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">Zero per cent withholding tax dividends paid by the RHQ to non-residents, a reciprocal party, or an unrelated party for services deemed crucial for the RHQ to conduct its operations.<\/li>\n<\/ul>\n<p>According to the anti-avoidance provision of Article 12 in the tax law, RHQ payments made as part of authorised activity or instances of tax avoidance are nevertheless subject to withholding tax. RHQ income from non-qualified activities is taxed under the usual Saudi tax regime, and any relevant DR, but along with any relevant international treaties and obligations may also apply.<\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"COMPLIANCE_WITH_ZAKAT_TAX_AND_CUSTOMS_AUTHORITY_ZATCA_TAX_REGULATIONS\"><\/span><span style=\"color: #039c7f;\">COMPLIANCE WITH ZAKAT, TAX AND CUSTOMS AUTHORITY (ZATCA) TAX REGULATIONS\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>An RHQ is required to prepare and maintain books of accounts for each tax year, including the partial tax year that runs from the date the RHQ license was issued to the end of that tax year.<\/p>\n<p>It must also file an annual tax or Zakat return, as applicable, and submit an annual report using the ZATCA-designated form to ensure compliance with economic substance rules.<\/p>\n<p>Income from non-qualifying operations must be allocated to qualifying activities as if they were separate from the RHQ\u2019s other activities, with separate accounts maintained for these activities.<\/p>\n<p>ZATCA is authorised to perform executive, administrative, and regulatory tasks such as information gathering, appraisal, inspection, and auditing of Saudi Arabian RHQs. RHQs may challenge ZATCA evaluations, reassessments, and penalties through available appeal channels.<\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"TRANSFER_PRICING_CONSIDERATIONS\"><\/span><span style=\"color: #039c7f;\"><b>TRANSFER <span style=\"color: #039c7f;\">PRICING<\/span> CONSIDERATIONS<\/b><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The ZATCA showed that RHQs should ensure all related party transactions are done at arm&#8217;s length and clearly comply with the current transfer pricing ordinances and regulations. The rules follow the same definitions as the transfer pricing bylaws, detailing what constitutes &#8220;related companies&#8221; or &#8220;related persons.&#8221;<\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"SELECTING_THE_TRANSFER_PRICING_METHOD\"><\/span><span style=\"color: #039c7f;\"><b>SELECTING THE TRANSFER PRICING METHOD<\/b><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The completion of the functional analysis will determine which type of transfer pricing method needs to be used.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"COST-PLUS_METHOD\"><\/span>COST-PLUS METHOD:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Typically used to determine compensation for services that are either routine or of little value. This method adds a markup to costs incurred by the RHQ, which equals a profit that could ordinarily be earned in the market. The method could be suitable where services are low-value or where inputs and outcomes can be easily measured.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"OTHER_METHODS\"><\/span>OTHER METHODS:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>For non-routine or strategic services, other alternative methods of compensation may be considered more appropriate under certain situations. These methods attempt to reflect the economic reality and contribution of the RHQ to the MNE group, which may include compensation based upon the results achieved, the value of goods procured, or a percentage of revenues or profits (including through the application of profit split methods).<\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"TRANSFER_PRICING_TP_DOCUMENTATION_AND_COMPLIANCE\"><\/span><span style=\"color: #039c7f;\"><b>TRANSFER PRICING (TP) DOCUMENTATION AND COMPLIANCE<\/b><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>To maintain the arm&#8217;s length principle, the application of a given remuneration type requires highly extensive transfer pricing documentation. A full transfer pricing study would compile thorough documentation on all analyses of functions performed, rationale for the selection of the type of remuneration, and benchmarking results. This package further helps the RHQ adequately safeguard its transfer pricing policy, besides merely complying with KSA local TP legislation and OECD TP principles. Besides, it would protect the RHQs against any penalties provided in the RHQ tax law relative to cancellation of RHQ tax incentives due to non-compliance with transfer pricing requirements.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"STRATEGIC_SIGNIFICANCE\"><\/span><b>STRATEGIC SIGNIFICANCE<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>As of the end of 2023, 180 RHQ companies have been announced in the Kingdom, indicating the increasing attractiveness of Saudi Arabia as an important place for business and investment. The Saudi government wants to have 480 RHQs established and operational by 2030, as part of the Kingdom&#8217;s vision. This initiative aims to position Saudi Arabia as the leading investment for the MENA region and enhance its economic, commercial and industrial diversity by attracting multinational enterprises.<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Some_of_the_major_multinational_corporations_which_already_established_their_RHQs_in_Saudi_Arabia_or_obtained_licenses_include\"><\/span><strong>Some of the major multinational corporations which already established their RHQs in Saudi Arabia or obtained licenses include:\u00a0<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><strong><i>Technology<\/i><i>:<\/i><\/strong><span style=\"font-weight: 400;\"> Apple, Microsoft, Oracle, SAP, Huawei<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><strong><i>Industry:<\/i><\/strong><span style=\"font-weight: 400;\"> General Electric, Boeing, Siemens, General Motors<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><strong><i>Retail:<\/i><\/strong><span style=\"font-weight: 400;\"> Amazon, Adidas, Nike, The Body Shop, L\u2019Oreal<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><strong><i>Financial Services:<\/i><\/strong><span style=\"font-weight: 400;\"> JPMorgan, Morgan Stanley, Citigroup, HSBC, Standard Chartered<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><strong><i>Logistics:<\/i><\/strong><span style=\"font-weight: 400;\"> DHL, FedEx, UPS, Maersk<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><strong><i>Aerospace and D\u00e9fense<\/i><i>:<\/i><\/strong><span style=\"font-weight: 400;\"> Boeing, Airbus, Lockheed Martin<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><strong><i>Law Firms and Legal Consultants:<\/i><\/strong><span style=\"font-weight: 400;\"> Greenberg Traurig LLP, Clyde &amp; Co, Latham &amp; Watkins<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"EXEMPTIONS_TO_THE_REGIONAL_HEADQUARTER_RHQ_MANDATE\"><\/span><span style=\"color: #039c7f;\"><b>EXEMPTIONS TO THE REGIONAL HEADQUARTER (RHQ) MANDATE<\/b><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The RHQ mandate is not applicable to contracts below SAR 1 million or those conducted outside the Kingdom. Additionally, government entities may accept offers from companies without established RHQs if there is no more than one technically acceptable offer or if the offer is significantly (25% or more) lower than the second-best offer.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Nevertheless, MISA and the Ministry of Finance will maintain a list of multinational companies without RHQs in Saudi Arabia and publish it on the government procurement unified electronic portal (Etimad). Companies on this list will be ineligible for government projects unless exempted under the RHQ Rules.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2 class=\"p1\"><span class=\"ez-toc-section\" id=\"HOW_CAN_WE_HELP\"><\/span><span style=\"color: #039c7f;\">HOW CAN WE HELP?<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p class=\"p7\">Starting from January 2024, companies without the set-up of Regional Headquarters (RHQ) in Saudi Arabia shall no longer be eligible to participate in government procurements or tender submissions for government projects; therefore, investors must carefully consider their options and seek expert advice to warrant complete compliance with all relevant laws and regulations.<\/p>\n<p>Creation Business Consultants shall keep you abreast of the recent regulations accordingly. Our team of experts will leverage our extensive experience to help you navigate recent changes while providing comprehensive\u00a0<a href=\"https:\/\/www.creationbc.com\/en-sa\/management-consulting\/\">guidance on managing your company in Saudi Arabia<\/a>.\u00a0Contact\u00a0a member of our team\u00a0to learn more about setting up a company in the UAE and Saudi Arabia. Email us at\u00a0<a href=\"mailto:info@creationbc.com\">info@creationbc.com<\/a> or\u00a0call\u00a0Saudi Arabia <a href=\"tel:+966 56 865 2329\">+966 56 865 2329<\/a>\u00a0or UAE\u00a0<a href=\"tel:+971%204%20878%206240\">+971 4 878 6240<\/a>.[\/vc_column_text][vc_empty_space][\/vc_column][\/vc_row][vc_row][vc_column width=&#8221;1\/6&#8243;][vc_single_image image=&#8221;12266&#8243; alignment=&#8221;center&#8221; style=&#8221;vc_box_circle_2&#8243;][\/vc_column][vc_column width=&#8221;1\/6&#8243;][vc_column_text]<strong><a href=\"https:\/\/www.creationbc.com\/en-sa\/scott-cairns\/\">Scott Cairns<\/a>, <\/strong><br \/>\n<strong>Managing Director<\/strong><\/p>\n<p><a href=\"https:\/\/www.linkedin.com\/in\/scott-cairns-5001a95\/\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"alignleft wp-image-6611\" src=\"https:\/\/www.creationbc.com\/wp-content\/uploads\/2019\/11\/download.png\" alt=\"\" width=\"37\" height=\"37\" title=\"\" srcset=\"https:\/\/www.creationbc.com\/wp-content\/uploads\/2019\/11\/download.png 225w, https:\/\/www.creationbc.com\/wp-content\/uploads\/2019\/11\/download-150x150.png 150w, https:\/\/www.creationbc.com\/wp-content\/uploads\/2019\/11\/download-80x80.png 80w\" sizes=\"auto, (max-width: 37px) 100vw, 37px\" \/><\/a>[\/vc_column_text][\/vc_column][vc_column width=&#8221;1\/6&#8243;][\/vc_column][vc_column width=&#8221;1\/6&#8243;][\/vc_column][vc_column width=&#8221;1\/6&#8243;][\/vc_column][vc_column width=&#8221;1\/6&#8243;][\/vc_column][\/vc_row][vc_row][vc_column width=&#8221;1\/4&#8243;][vc_tta_accordion spacing=&#8221;1&#8243; active_section=&#8221;0&#8243; collapsible_all=&#8221;true&#8221;][vc_tta_section title=&#8221;ARTICLE UPDATES LOG&#8221; tab_id=&#8221;1682511105393-b019fb54-a8b80106-7d48&#8243;][vc_column_text]This Article was researched and written on Oct 18th, 2023, by Rawan el Khalil and <span data-sheets-root=\"1\">Murad Barakat.<\/span>[\/vc_column_text][vc_column_text]This Article was reviewed and updated on Dec 21st, 2025, by\u00a0<a href=\"https:\/\/www.creationbc.com\/en-sa\/scott-cairns\/\">Scott Cairns<\/a>.[\/vc_column_text][\/vc_tta_section][\/vc_tta_accordion][\/vc_column][vc_column width=&#8221;3\/4&#8243;][\/vc_column][\/vc_row]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[vc_row][vc_column][vc_column_text]This article was updated on June 13, 2024. &nbsp; This article has been researched and written by the Business Development &amp; Compliance Team at Creation Business Consultants. AI has not been used in generating this article. &nbsp; In February 2021, the Saudi government declared its intention to restrict contracts with foreign firms that do not [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":14258,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[98,103],"tags":[],"class_list":["post-14256","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-sa-company-setup","category-sa-law"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.creationbc.com\/en-sa\/wp-json\/wp\/v2\/posts\/14256","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.creationbc.com\/en-sa\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.creationbc.com\/en-sa\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.creationbc.com\/en-sa\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.creationbc.com\/en-sa\/wp-json\/wp\/v2\/comments?post=14256"}],"version-history":[{"count":22,"href":"https:\/\/www.creationbc.com\/en-sa\/wp-json\/wp\/v2\/posts\/14256\/revisions"}],"predecessor-version":[{"id":23191,"href":"https:\/\/www.creationbc.com\/en-sa\/wp-json\/wp\/v2\/posts\/14256\/revisions\/23191"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.creationbc.com\/en-sa\/wp-json\/wp\/v2\/media\/14258"}],"wp:attachment":[{"href":"https:\/\/www.creationbc.com\/en-sa\/wp-json\/wp\/v2\/media?parent=14256"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.creationbc.com\/en-sa\/wp-json\/wp\/v2\/categories?post=14256"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.creationbc.com\/en-sa\/wp-json\/wp\/v2\/tags?post=14256"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}