Saudi Arabia Rolls Out Generous Tax Incentives for Regional Headquarters, Effective Immediately

Riyadh, Saudi Arabia - Umm Al-Qura newspaper, in its publication on February 16, has revealed the newly released tax rules for regional headquarters (RHQ) in Saudi Arabia. These regulations encompass provisions regarding enticing tax incentives granted to RHQs.

Immediate Implementation

With their publication, the tax rules have become effective starting from the date of their publication. RHQs operating in Saudi Arabia and meeting the qualification criteria set by the competent authorities will now benefit from lucrative incentives that aim to encourage growth and investment.

Zero Percent Income Tax and Withholding Tax

As per the newly introduced rules, qualifying RHQs will enjoy a zero percent income tax on qualifying income. Additionally, they will benefit from zero percent withholding tax on payments made to non-resident individuals or entities. This includes cash dividends, payments to related parties, and payments to unrelated parties for services essential to the functioning of the RHQ.

30-Year Tax Incentives for Qualified Activities

RHQs engaging in activities approved by the competent authorities are eligible for tax incentives for a period of 30 years, subject to renewal. This extensive duration presents an attractive opportunity for global firms to establish and expand their presence in Saudi Arabia, bolstering economic development and fostering international partnerships.

Strategic Deadline for Relocation

International companies are urged to relocate their RHQs to Riyadh by January 2024, as mandated by the Saudi Ministry of Investment. This move underscores Saudi Arabia's commitment to creating an ideal business environment, attracting global firms, and ensuring sustained economic growth.

Progressive Tax Incentives Package

Saudi Arabia had previously announced in December 2023 the introduction of a comprehensive package of tax incentives, spanning 30 years, designed to entice RHQs of international companies. This strategic initiative aims to further cultivate Saudi Arabia's position as an attractive investment destination on the global stage.

As these tax incentives take effect, regional headquarters in Riyadh can seize the opportunity to expand their operations, enjoy favorable tax benefits, and contribute to Saudi Arabia's flourishing business landscape.