RHQ in Saudi Arabia, KSA – Everything You Need to Know

RHQ in Saudi Arabia can be a strategic move for businesses looking to expand their presence in the Middle East and tap into the region’s growing market opportunities. By understanding the benefits, requirements, and steps involved in setting up an RHQ in Saudi Arabia, KSA, you can position your company for success and growth in this dynamic market.

The Saudi Regional Headquarters Program was launched by the Saudi Arabian General Investment Authority (SAGIA) to encourage companies to set up their regional headquarters in the country. The program offers a range of incentives to attract multinational corporations from various sectors, including finance, technology, healthcare, and consumer goods, RHQ in Saudi Arabia. Launched in February 2021, the RHQ Program offers various tax and non-tax incentives to MNCs that set up their headquarters in Saudi Arabia. As of early 2024, over 350 international companies have obtained licenses to establish their RHQs in the Kingdom.

What is RHQ in Saudi Arabia?

The Regional Headquarters (RHQ) Program in Saudi Arabia is a strategic initiative aimed at attracting multinational companies (MNCs) to establish their regional bases in the Kingdom, particularly in Riyadh. This program is part of Saudi Arabia’s Vision 2030, which seeks to diversify the economy and reduce its reliance on oil by positioning the country as a significant business and investment hub in the Middle East and North Africa (MENA) region.

Having an RHQ in Saudi Arabia offers several advantages for multinational corporations. Firstly, it allows companies to establish a strong presence in the region, enabling them to tap into the growing market opportunities in Saudi Arabia. Secondly, RHQs provide a centralized platform for decision-making, allowing companies to streamline their operations and achieve greater efficiency. Additionally, having an RHQ in Saudi Arabia signals a company’s commitment to the market and its willingness to invest in the country’s economic growth.

Understanding the Role of RHQ in Saudi Arabia

The regional headquarters in Riyadh, Dammam, and Jeddah in Saudi Arabia are strategic hubs that enable the company to streamline its operations and make decisions tailored to the local market. This entity is responsible for ensuring that the company’s products or services meet the needs and preferences of Saudi consumers and comply with local regulations and business practices.

Types of RHQ Licenses in Saudi Arabia

1. Standard RHQ License: This type of license is suitable for companies looking to establish an RHQ in KSA to manage their operations in the MENA region. With a standard RHQ license, companies can benefit from a wide range of services and support offered by the Saudi government.
2. Financial RHQ License: Companies in the financial sector, such as banks, insurance companies, and investment firms, can apply for a financial RHQ license. This license allows companies to centralize their financial management and decision-making functions in Saudi Arabia.
3. Trading RHQ License: A trading RHQ license is the ideal choice for companies involved in trading activities. This license enables companies to manage their trading operations in the MENA region from Saudi Arabia efficiently.
4. Industrial RHQ License: Companies engaged in industrial activities can opt for an industrial RHQ license to centralize their manufacturing and production operations. This license provides companies with the necessary infrastructure and support to expand their industrial footprint in the region.

Key Functions of RHQ in Saudi Arabia

1. Business Development: The Regional Headquarters is also responsible for business development activities, such as identifying potential partners, distributors, or suppliers in Saudi Arabia. This entity plays a key role in establishing and maintaining relationships that are essential for the company’s success in the market.
2. Regulatory Compliance: Ensuring compliance with local laws and regulations is another important function of the RHQ in Saudi. This entity monitors changes in legislation and works closely with government agencies to ensure that the company’s operations are in line with the legal requirements.

Benefits of Establishing an RHQ in Saudi Arabia

Setting up a RHQ in Saudi Arabia offers several benefits for multinational corporations. Some of the advantages include:

1. Strategic Location: Saudi Arabia is strategically located at the crossroads of three continents, making it an ideal location for businesses looking to expand their presence in the Middle East and beyond.
2. Stable Economy: The Kingdom of Saudi Arabia has a stable and growing economy, driven by its vast oil reserves and strategic economic diversification efforts.
3. Investment Incentives: The Saudi government offers a range of incentives to attract foreign investment, including tax breaks, financial incentives, and streamlined business setup procedures.
4. Access to a Large Market: With a population of over 30 million people, Saudi Arabia offers a large and diverse market for businesses operating in various industries.
5. Infrastructure Development: The Kingdom has invested heavily in infrastructure development, including transportation, communication, and energy, providing a conducive environment for business operations.
6. GCC Membership: Saudi Arabia is a member of the Gulf Cooperation Council (GCC), which facilitates trade and business activities among member states, creating opportunities for regional expansion.

Setting up an RHQ in Riyadh, Dammam, and Jeddah in Saudi Arabia can open up a world of opportunities for your business. With its strategic location, business-friendly environment, and market potential, Saudi Arabia is an ideal destination for expanding your operations. By conducting thorough market research, adhering to legal requirements, choosing the right location, hiring experienced professionals, building a strong network, and streamlining your operations, you can set up a successful RHQ in Saudi Arabia.

Requirements for Establishing an RHQ in Saudi Arabia

• To qualify for the RHQ status, MNCs must meet several criteria: Establish the RHQ as a separate legal entity (either a registered branch or a new subsidiary) within Saudi Arabia.
• Employ at least 15 full-time employees, including three at executive levels, within one year of obtaining the license.
• Commence mandatory activities within six months and optional activities within one year of receiving the license

How to Obtain an RHQ License in KSA?

To obtain an RHQ license in Saudi Arabia, foreign companies need to meet certain criteria set by the government. Some of the key requirements include:

1. Substance and presence in the region: Companies applying for an RHQ license must demonstrate a substantial presence in the region and a clear business plan for their operations.
2. Financial capability: Companies are required to have a strong financial position and a proven track record of success in their industry.
3. Employment of Saudi nationals: Companies must commit to employing a minimum number of Saudi nationals as part of their workforce.

Benefits of a RHQ License in Saudi Arabia

Having an RHQ license in Saudi Arabia comes with a multitude of benefits for foreign companies. Some of the key advantages include:

• Strategic location: Saudi Arabia’s strategic location in the Middle East makes it an ideal hub for companies looking to expand their operations in the region.
• Tax incentives: Companies with an RHQ license may be eligible for various tax incentives and exemptions, making it a cost-effective option for doing business.
• Access to markets: Saudi Arabia provides access to a wide range of markets in the Middle East and North Africa region, allowing companies to tap into new opportunities for growth.
• Government support: Companies with an RHQ license receive support from the government in setting up their operations, making it easier to navigate the local business environment.

How to Apply for a RHQ License in Saudi Arabia?

Businesses looking to apply for an RHQ license in Riyadh, Dammam, and Jeddah in Saudi Arabia must follow a set of steps outlined by the SFDA. Here is a general overview of the application process:

1. Registration: The first step is to register the company with the SFDA through their online portal. This involves providing basic information about the business and its activities.
2. Documentation: The next step is to gather all the necessary documentation required for the application. This may include business licenses, product registration certificates, and other relevant paperwork.
3. Submission: Once all the documents are in order, the company can submit their application through the SFDA portal. The application will be reviewed by the authority, and any additional information or clarifications may be requested.
4. Inspection: If the application is approved, a physical inspection of the company’s facilities may be conducted by SFDA inspectors to ensure compliance with health and safety standards.
5. Approval: Finally, if the inspection is successful and all requirements are met, the RHQ license will be issued to the company, allowing them to start their operations in Saudi Arabia.

Eligibility Criteria for RHQ License in Saudi Arabia

Now, let’s talk about the eligibility criteria for obtaining an RHQ license in Saudi Arabia. To be eligible, a company must meet the following requirements:

• Minimum Capital Requirement: The company must have a minimum capital of SAR 100 million.
• Regional Operations: The company should have operated in the MENA region for at least 3 years.
• Business Plan: A comprehensive business plan outlining the company’s regional headquarters operations in Saudi Arabia.
• Local Presence: The company must have a physical presence in Saudi Arabia, either through a branch office or a registered agent.

Getting an RHQ license in Saudi Arabia can offer companies a competitive edge in the MENA region. By meeting the eligibility criteria and following the application process, companies can establish their regional headquarters in the Kingdom and benefit from the strategic advantages it offers.

Saudi Regional Headquarters Program: tax and non-tax benefits

RHQ Tax Benefits in Saudi Arabia

One of the key benefits of the RHQ in KSA Program is the tax incentives offered to companies. These incentives include:

1. A 30-year exemption from corporate income tax and withholding tax for approved RHQ activities, starting from the date the RHQ license is issued.
2. Specific income generated from prescribed activities will be granted tax relief, with detailed guidelines released by the Zakat, Tax and Customs Authority (ZATCA) in February 2024

RHQ Non-Tax Benefits in Saudi Arabia

In addition to tax incentives, the Saudi Regional Headquarters Program also offers a range of non-tax benefits to companies. These incentives include:

1. A 10-year exemption from Saudization requirements, allowing RHQs to hire foreign employees without meeting local employment quotas.
2. Unlimited employee visas and employment opportunities for dependents of RHQ employees.
3. Priority in government contracting for companies with established RHQs

How to Apply for an RHQ License with us?

So, how do you apply for an RHQ license in Riyadh, Dammam, and Jeddah in Saudi Arabia with us? The process is straightforward and designed to be as efficient as possible. Here are the key steps you’ll need to follow:

1. Initial Consultation: The first step is to schedule an initial consultation with our team. During this meeting, we’ll discuss your business goals, assess your eligibility for an RHQ license, and provide you with an overview of the application process.
2. Document Preparation: Once you’ve decided to move forward with your application, we’ll help you prepare all the necessary documents and information required. This may include financial statements, business plans, and other relevant materials.
3. Submission: After your documents are ready, we will submit your application to the relevant authorities on your behalf. Our team will ensure that all the necessary paperwork is completed accurately and promptly.
4. Approval and Compliance: Once your application is approved, we’ll help you navigate any compliance requirements and ensure that you are fully compliant with all relevant regulations.

In conclusion, RHQ in Saudi Arabia KSA allows foreign companies to establish regional headquarters in strategic locations with access to a diverse market. Companies can benefit from tax incentives, government support, and access to new markets by meeting the necessary criteria and requirements. It is a valuable option for companies looking to expand their presence in the Middle East and North Africa region.

Connect with Neeja Corporate Services

Are you looking to start your company in Saudi Arabia but feeling overcome by the registration process? Don’t worry, you’re not alone. Setting up a business in a foreign country can be challenging, but with the right guidance and support, it doesn’t have to be a stressful experience. Neeja’s business setup services offer complete support and serve as a one-stop shop for company setup in KSA. We provide a wide range of value-added services, such as RHQ in Riyadh, Dammam, and Jeddah in Saudi Arabia. Over the years, we have successfully advised many new entrepreneurs to make their business in KSA dreams a reality.

To book a free consultation, call on +971 43243031. You can also send a WhatsApp message at +971 50 465 2843. To connect over email, send us your query at [email protected].

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