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Home BNN The Race for Regional HQs Heats Up: Guide to Setting Up Your Business in Saudi Arabia

The Race for Regional HQs Heats Up: Guide to Setting Up Your Business in Saudi Arabia

by Anamta bnn
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Saudi Arabia’s regional headquarters (RHQ) programme took effect on 1 January 2024, with the goal of attracting approximately 480 multinational corporations (MNCs) to move their headquarters to the kingdom by 2030. The programme looks to diversify Saudi Arabia’s economy and reduce its reliance on oil.

As the Kingdom attracts a surge of international businesses at a rapid pace, the government launched the RHQ program, which will go into effect in January 2024. Aside from commercial activities, RHQ licenses are required to carry out specific projects, including those launched by the Public Investment Fund (PIF), such as NEOM and other governmental ventures. However, there is some uncertainty about their precise application in such situations.

To obtain this license, an entity must be a registered foreign company or branch in Saudi Arabia, have at least two subsidiaries outside of the Kingdom and its country of incorporation, and maintain a physical presence solely for regional administrative purposes. Any commercial transactions must be conducted by MISA-licensed affiliates.
The RHQ license structure has an annual fee and an initial payment in the first year that is valid for one to five years. While commercial activities are not permitted, RHQs can manage budgets, marketing, and strategic plans.

An RHQ serves as a strategic support hub for subsidiaries and affiliates in the MENA region, advising and overseeing management activities. Furthermore, establishing a RHQ necessitates the hiring of 15 employees within the first 12 months of operation, with nationality flexibility, as well as three C-level executives.

Mr. Hatem Elsafty, in his capacity as CEO of Business Link—a company that, over the course of more than 15 years, has assisted 40,000 entrepreneurs in navigating international expansion—has described the regional headquarters program as a significant development. At Business Link, we are excited about the opportunities it presents, as well as the strong commitment it represents from the Saudi government.

Business setup in Saudi Arabia entails numerous steps such as obtaining an Investment License from SAGIA/MISA, Obtaining Commercial Registration Certificate (CR), activation of all the government portals, General Manager Iqama process, providing national office address, opening a corporate bank account.

“There will certainly be an adjustment period.  Companies will need to understand the specific requirements of the program and navigate the legalities of establishing a presence in Saudi Arabia. This is where Business Link can be a valuable partner.  We have extensive experience helping companies navigate international expansion, and we’re well-versed in the nuances of the Saudi market.” Mr. Hatem Elsafty CEO of Business Link added.

With its strategic location, consciousness on economic diversification, and dedication to attracting overseas investment, Saudi Arabia is well-located to end up a chief hub for local headquarters. Companies searching for boom possibilities in the Middle East would be clever to remember establishing a presence in the nation.