Cityscape of Saudi capital Riyadh.
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DUBAI, United Arab Emirates — Saudi Arabia introduced a 30-year tax exemption package for overseas corporations establishing their regional headquarters within the kingdom, the newest transfer in its aggressive marketing campaign to appeal to worldwide funding and headcount.
“The Ministry of Investment of Saudi Arabia, in coordination with the Ministry of Finance and the Zakat, Tax and Customs Authority at this time introduced 30-year tax incentive package deal for The Regional Headquarters (RHQ) Program, to additional streamline the method for multinational corporations (MNCs) to set up their RHQ in Saudi Arabia,” the Saudi state press company wrote in a press release Tuesday.
The supply features a 0% corporate tax price for 30 years, which shall be utilized for corporations “from the day they obtained their RHQ license,” the assertion learn.
The program “goals to appeal to MNCs to arrange their RHQ in Saudi Arabia and place the Kingdom because the main business, industrial and funding hub for the MENA area, by providing a variety of advantages and premium assist providers that complement the Kingdom’s globally aggressive worth proposition,” the assertion added.
A controversial ultimatum
The kingdom grabbed investor consideration and sparked controversy in February 2021 when it first introduced its RHQ marketing campaign, declaring that any overseas firm that didn’t have its regional headquarters workplace in Saudi Arabia by the beginning of 2024 could be barred from doing enterprise with state entities.
The information surprised buyers and expat staff, a lot of whom saw the move as a shot at Dubai, the United Arab Emirates business capital that’s residence to the very best focus of Middle East regional headquarters.
In October of this yr, Saudi ministers made clear that the ultimatum still held firm: Foreign corporations will want to base their regional headquarters within the kingdom by Jan. 1, 2024 or be barred from profitable authorities contracts.
Many overseas buyers are nonetheless skeptical of the power of Saudi Arabia — an infamously conservative Muslim theocracy identified for its extremely criticized human rights document — to sufficiently appeal to overseas expertise.
Expats within the regional HQ hub of Dubai query the dominion’s capability to present adequate quality-of-life providers like worldwide faculties, ample housing, and points of a extra Western life-style, resembling alcohol, which is at the moment unlawful in Saudi Arabia.
Saudi Arabia says the RHQ program has up to now licensed greater than 200 corporations to function their regional head places of work within the kingdom. And in an obvious response to the issues of many expat staff that households there would battle to discover worldwide faculties for his or her kids, “seven worldwide Okay-12 faculties have introduced their new campuses within the Kingdom,” the Saudi Press Agency assertion wrote.
“The tax incentive provides multinational corporations working within the area but another excuse to make Saudi Arabia residence to their regional headquarters, on high of different advantages resembling relaxed Saudization necessities and work permits for the spouses of RHQ executives,” Saudi Minister of Investment Khalid Al-Falih was cited by the SPA as saying.
The kingdom’s regional HQ drive is part of Vision 2030, an formidable marketing campaign launched by Crown Prince Mohammed bin Salman in 2016, which goals to create non-public sector jobs and diversify its economic system away from oil as Saudi Arabia’s inhabitants — greater than 60% of whom are underneath the age of 30 — grows.