Saudi Arabia has unveiled plans to provide tax incentives to foreign companies that choose to establish their regional headquarters in the country. These incentives encompass a 30-year exemption from corporate income tax. Saudi’s Ministry of Investment has clarified that these benefits will include a complete waiver of income tax for foreign entities that relocate their regional headquarters to the Kingdom. Moreover, such advantages can be availed from the date of issuance of the regional headquarters license.
The initiative to entice foreign companies to establish their regional headquarters in Saudi Arabia is a collaborative effort between the Ministry of Investment and the Royal Commission for Riyadh City. Additionally, this program seeks to incentivize international companies to choose Saudi as the location for their regional headquarters in the Middle East and North Africa region. As part of this endeavor, the Kingdom is providing an array of benefits and incentives to showcase its attractiveness as a business destination.
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Additional incentives
According to Khalid Al Falih, Saudi’s minister of Investment, the Kingdom is introducing additional incentives for foreign companies that choose to establish their regional headquarters within its borders. Also, these incentives notably include special benefits for companies that adhere to Saudization requirements, which aim to promote the employment of Saudi nationals. Al Falih further highlighted that the favorable business environment in Saudi Arabia has already attracted over 200 companies to relocate their headquarters to the Kingdom.
More clarity and stability
Saudi Finance Minister Mohammed Al-Jadaan expressed that the recently implemented tax exemptions for the regional headquarters of international companies in the Kingdom will provide these firms with enhanced clarity and stability. This, in turn, will bolster their ability to plan for the future and expand their business operations in the region, with Saudi Arabia serving as a starting point. In a previous statement, Al Falih mentioned in November that the targets set for the regional headquarters program have already been surpassed by Saudi Arabia, which aimed to attract 160 international companies by the end of the year.
Establishing the right ecosystem
During an interview with Bloomberg, Al Falih highlighted that the regional headquarters program is a comprehensive and ongoing effort. In addition, he mentioned that Saudi Arabia is actively collaborating with international entities to establish a conducive ecosystem that encourages the opening of offices in the country. Notable examples of companies that have recently established their regional headquarters in Saudi Arabia include PwC Middle East and GE Healthcare.
Furthermore, Al Falih underscored that Saudi Arabia serves as a stable and reliable destination for international investors, particularly during a period characterized by geopolitical tensions and economic challenges.
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