DUBAI, United Arab Emirates — Saudi Arabia announced a 30-year tax exemption package for foreign companies establishing their regional headquarters in the kingdom, the latest move in its aggressive campaign to attract international investment and headcount.
“The Ministry of Investment of Saudi Arabia, in coordination with the Ministry of Finance and the Zakat, Tax and Customs Authority today announced 30-year tax incentive package for The Regional Headquarters (RHQ) Program, to further streamline the process for multinational companies (MNCs) to establish their RHQ in Saudi Arabia,” the Saudi state press agency wrote in a statement Tuesday.
The offer includes a 0% corporate tax rate for 30 years, which will be applied for companies “from the day they obtained their RHQ license,” the statement read.
The program “aims to attract MNCs to set up their RHQ in Saudi Arabia and position the Kingdom as the leading commercial, industrial and investment hub for the MENA region, by offering a range of benefits and premium support services that complement the Kingdom’s globally competitive value proposition,” the statement added.
A controversial ultimatum
The kingdom grabbed investor attention and sparked controversy in February 2021 when it first announced its RHQ campaign, declaring that any foreign company that did not have its regional headquarters office in Saudi Arabia by the start of 2024 would be barred from doing business with state entities.
The news stunned investors and expat workers, many of whom saw the move as a shot at Dubai, the United Arab Emirates commercial capital that is home to the highest concentration of Middle East regional headquarters.
In October of this year, Saudi ministers made clear that the ultimatum still held firm: Foreign companies will need to base their regional headquarters in the kingdom by Jan. 1, 2024 or be barred from lucrative government contracts.