Saudi Arabia Offers 30-Year Tax Exemption Package for Foreign Companies

By Jace Dela Cruz

Dec 07, 2023 01:04 AM EST

Saudi Arabia has unveiled a 30-year tax exemption package for foreign companies that want to establish their regional headquarters in the kingdom.

According to CNBC, this strategic move is part of Saudi Arabia's strategy to attract international investment and foreign executives, entrepreneurs, and talented professionals.

In an official statement, the Ministry of Investment of Saudi Arabia (MISA), in collaboration with the Ministry of Finance and the Zakat, Tax, and Customs Authority (ZATCA), introduced a comprehensive tax incentive program for The Regional Headquarters (RHQ) Program. 

The initiative is designed to facilitate the establishment of regional headquarters by multinational companies (MNCs) in Saudi Arabia.

(Photo : FAYEZ NURELDINE/AFP via Getty Images)
The flag of Saudi Arabia is displayed during the 10th Arab-China Business Conference in Riyadh, on June 11, 2023.

30-Year Tax Relief Offered in Saudi Arabia

The core element of this incentive is a 30-year tax relief that features a 0% corporate income tax rate and exemption from withholding tax (WHT) related to approved RHQ activities. 

This tax relief becomes applicable from the day these companies obtain their RHQ license. The RHQ Program, jointly managed by MISA and the Royal Commission for Riyadh City (RCRC), intends to position Saudi Arabia as a premier commercial, industrial, and investment hub for the Middle East and North Africa (MENA) region. 

The program strives to attract MNCs and further solidify the kingdom's global competitiveness by offering a range of benefits and premium support services.

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Regional Headquarters in Saudi Arabia

Since its launch in 2021, the RHQ Program has successfully licensed more than 200 companies to conduct their regional headquarters from Saudi Arabia. Furthermore, the program has attracted seven international K-12 schools to establish campuses in the kingdom.

"The tax incentive gives multinational companies operating in the region yet another reason to make Saudi Arabia home to their regional headquarters, on top of other benefits such as relaxed Saudization requirements and work permits for the spouses of RHQ executives," Saudi Minister of Investment Khalid Al-Falih said in the statement. 

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