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Saudi offers 30-year tax breaks under regional HQ scheme

The King Abdullah Financial District in Riyadh. The kingdom has now licensed over 200 companies under its RHQ programme Shutterstock
The King Abdullah Financial District in Riyadh. The kingdom has now licensed over 200 companies under its RHQ programme
  • No corporate income tax
  • Relaxed Saudisation rules
  • Work permits for spouses

Saudi Arabia will offer a 30-year corporate income tax exemption to foreign companies that locate their regional headquarters to the kingdom.

In 2021, the government set a target of January 1, 2024, for companies to set up in the kingdom, the world’s top oil exporter, to gain access to government contracts worth SAR1 million ($266,000) or more.

The tax exemption package under the regional headquarters (RHQ) programme includes a zero percent rate for corporate income tax and withholding tax related to approved activities for 30 years, state-run SPA news agency reported.

The companies will benefit from the tax relief from the day they obtain their license.

The RHQ programme has now licensed over 200 companies to operate their regional headquarters from the kingdom. Additionally, seven international K-12 schools will set up their new campuses in the country under a dedicated supporting programme targeting international schools.

“The tax incentive gives multinational companies operating in the region yet another reason to make Saudi Arabia home to their regional headquarters,” investment minister Khalid Al-Falih stated.

The companies will also get other benefits such as relaxed Saudisation requirements and work permits for the spouses of company executives, he added.

Finance minister Mohammed Al Jadaan stated that the new incentive gives businesses more visibility and certainty for future planning.

“We look forward to welcoming more multinational companies to participate in projects across all sectors, including our giga-projects and in preparation for the hosting of such events as the 2029 Asian Winter Games and Expo 2030.”

Many companies have been finding workarounds to boost their presence in the kingdom without sacrificing their ties to the United Arab Emirates, which has built itself up over the past two decades as the region’s main international business centre.

Property consultancy CBRE said that a rush of international companies to set up regional headquarters in Riyadh is driving record increases in commercial property rents.

Prime rents in the Saudi capital rose by almost 24 percent in the year to Q3, CBRE said, with rents at SAR2,617 ($712) per sq m.

The RHQ programme is part of plans to make Riyadh one of the world’s 10 largest city economies by 2030, while at the same time more than doubling its population to 15 to 20 million.

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