KSA Stops Contracting with Company with Regional Headquarters outside Kingdom

KSA Stops Contracting with company with regional headquarters outside Kingdom

The decision to stop contracting with any commercial institution or foreign company with a regional headquarters outside Kingdom came into effect this morning, the first day of January 2024. It came into effect after the period granted to foreign companies had expired, according to Sabq.

The Kingdom had issued more than 180 licenses to global companies to transfer their regional headquarters. This is after announcing the decision to stop contracting with entities not complying with the Kingdom’s approach at the beginning of 2024. Thereby, the Kingdom exceeded the country’s target of 160 regional headquarters.

Moreover, last week, the Council of Ministers approved regulations for government entities contracting with companies that do not have a regional headquarters in the Kingdom.

Tax Incentives


In December last year, the Ministry of Investment announced a new package of tax incentives for 30 years. This package aims to encourage global companies to open their regional headquarters in the Kingdom and facilitate the process.

The Saudi program to attract global companies’ regional headquarters is a joint initiative between the Ministry of Investment and the Royal Commission for Riyadh.

Furthermore, the program aims to attract global companies to establish their regional headquarters in KSA. Therefore, this makes the Kingdom the first choice for these companies in the Middle East and North Africa region. The Kingdom would offer a range of benefits and exceptional support services to them.

The 30-year tax exemption package for regional headquarters includes a zero percent rate for both: income tax on regional headquarters entities and withholding tax for the approved activities of the regional headquarters. Global companies will benefit from the tax exemption package starting from the date the regional headquarters license is issued.

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