Regional HQ in Saudi Arabia: Why It’s Now a Strategic Requirement
Saudi Arabia is rapidly transforming from a regional market into a strategic command center. With the introduction of the Regional Headquarters (RHQ) Program, the Kingdom now offers a compelling framework for multinational companies seeking to manage and expand their Middle East presence. Establishing a regional HQ in Saudi Arabia is becoming a competitive advantage for global firms.
As of January 1, 2024, companies aiming to participate in public sector contracts in Saudi Arabia must have an official Regioinal HQ entity based in the country. This development makes establishing a regional HQ in Saudi Arabia more than an option—it’s a clear strategic imperative.
NH Management supports international businesses in structuring, licensing, and operationalizing their regional presence to align with this evolving landscape.
Understanding the Regional HQ License
The Regional HQ license is issued by the Ministry of Investment (MISA) and the Royal Commission for Riyadh City. It enables foreign entities to set up a non-operational base in Riyadh that oversees management and coordination across their MENA operations. The regional HQ license allows multinationals to create a centralized leadership entity in Riyadh.
While the Regional HQ doesn’t conduct direct commercial activity, it acts as a central node for decision-making, policy setting, and regional governance.
Key Advantages of the Regional HQ License
Companies establishing an Regional HQ in Saudi Arabia gain access to a unique package of benefits designed to attract long-term investment and leadership functions:
Zero Corporate Income Tax: Offered for up to 30 years
No Withholding Tax: On dividends and service-related payments
Full Foreign Ownership: No local partner required
Fast-Tracked Visas: For employees and executives under RHQ sponsorship
Initial Saudization Relief: Eases compliance during setup phase
Enhanced Public Sector Access: RHQ status is now mandatory for bidding on government tenders
Support for Relocation: Including family accommodation, schooling, and spousal employment assistance
These benefits are tailored to encourage long-term operational anchoring in Saudi Arabia rather than reliance on satellite offices elsewhere in the Gulf.
Eligibility and Setup Requirements
To qualify, companies must meet the following criteria:
Maintain active operations in at least two other MENA countries
Establish a new legal entity in Saudi Arabia (usually an LLC or branch)
Assign key strategic roles to be based in Riyadh, such as:
Finance and treasury functions
HR and recruitment oversight
Legal and compliance governance
Strategic planning and business development
Investor relations and communications
Importantly, Regional HQs are not permitted to conduct sales or generate revenue. Their role is strictly leadership and support-focused.
How It Compares to Traditional MISA Licensing
While a standard MISA license permits full commercial activity, it does not provide access to the exemptions and government contract eligibility available through the RHQ structure.
Here’s a simple comparison:
Business Role: RHQs manage and oversee, MISA entities trade and operate
Taxation: RHQs enjoy 0% corporate and withholding tax; MISA licenses are subject to 20%
Saudization: RHQs benefit from phased exemptions; MISA entities follow the Nitaqat system
Public Contracts: RHQ status is a legal requirement; MISA licenses alone are not sufficient
Who’s Using the RHQ Model?
Professional Services Firms:
Global consultancies and audit firms centralize their public sector strategies and resource planning in Riyadh to retain eligibility for major contracts.
Manufacturers and Industrials:
Use the RHQ structure to relocate leadership functions like legal, finance, and procurement while operational activities remain across MENA.
Tech and SaaS Companies:
Rely on the RHQ for oversight of innovation, risk, and compliance—while monetization flows through Saudi-based subsidiaries or digital platforms.
Private Equity and Family Offices:
Base investor relations and regional decision-making in Riyadh, using it as a hub for pan-African and Asian portfolio oversight.
Popular Structuring Models
RHQ + LLC: The RHQ focuses on regional strategy and policy, while a local LLC handles sales and operations.
RHQ + Free Zone: Companies combine a Riyadh-based HQ with operational support hubs in jurisdictions like the UAE or Bahrain.
Riyadh-Centered Governance: Firms relocate key leadership to Saudi Arabia, with other countries acting as transaction or booking centers.
Saudi Arabia’s New Role as a Regional Investment Anchor
This structural shift reflects Saudi Arabia’s broader efforts to position itself as a top-tier business destination in the Middle East. For deeper context on this trend, see our post on Saudi Arabia: The Gulf’s New Investment Magnet.
Strategic Presence Matters
A regional footprint alone is no longer enough. To compete in the modern Middle East, companies must be positioned—not just present. With government policy, tax incentives, and international visibility aligned behind the RHQ model, early adopters will be best placed to lead.
NH Management provides full-cycle advisory support to companies exploring RHQ setup in Saudi Arabia—from eligibility assessments and license acquisition to visa planning and ongoing compliance.
Contact us today at in**@**********nt.com or call +971 4 222 1327 to schedule a consultation.
