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Upcoming changes to legislation in Saudi Arabia – an overview

From 1st January 2024, foreign firms wishing to do business in Saudi Arabia will be required to have their regional headquarters based within the Kingdom.

The Regional Headquarters (RHQ) Programme is a joint initiative between multiple government agencies which aims to position the Kingdom as the leading regional hub for multinational companies. International businesses without regional headquarters in Saudi will be restricted in terms of how they are able to work with any agencies, institutions and funds owned and managed by the Saudi government.

It is believed that the RHQ Programme will offer a package of incentives for companies to encourage them to establish regional headquarters in the Kingdom but exact details of these incentives have yet to be given. It is thought that the package may include labour and visa policy exemptions.

First steps

For those businesses seeking to set up headquarters in Saudi Arabia, the first necessary step is to apply for a Regional Headquarters’ Business License. Regional Headquarters’ Business Licenses are only available for companies who are already conducting business in two or more different countries in the region (ex. KSA and country of incorporation) and looking to establish an additional presence within the Kingdom to support, manage and provide strategic direction to their existing branches in the Middle East.

In order to apply for a RHQ License, businesses must provide the following documents:

  • Copies of at least two commercial registrations or commercial licenses of the MNC issued in two different countries.
  • Annual audited financial statements for the last fiscal year preceding the application date.
  • A completed RHQ Development Form.
  • A completed RHQ License Application Form.

Businesses must also be prepared to commit to their RHQ delivering all of the mandatory licensing activities outlined in the terms of the RHQ Programme, including business planning, budgeting, financial reporting and strategic co-ordination, PLUS three of the optional RHQ activities, under which category HR, training services and R&D all fall.

The Saudi Ministry of Investment (MISA) will have overall responsibility for issuing the Regional Headquarters’ business licenses. In anticipation of the influx of applications, the Ministry have made clear attempts to reduce red tape and streamline the clearance process, to help speed up investment realisation, and there is a dedicated MISA e-service portal in place to support businesses with applications.

How K2 can help

Setting up a new headquarters anywhere in the world can be a daunting task. In addition to ensuring that all the relevant paperwork is completed in order to comply with regional requirements, making sure you have all the people you need in the place they need to be, is another major concern.

Whether you’re looking at a group move, in the case of a whole HQ relocation or moving a few business-critical employees, to support the set-up of a brand new office, ahead of a local recruitment drive, K2 can offer support and guidance right from the outset.

Commenting on the changes, UAE Country Manager Sam Daly says:

“We are now starting to witness a key shift in the region since the launch of the RHQ License Programme.  Even though we still await further details being released from the authorities at present, we are already discussing policy and relocation packages with several clients who are looking to move their regional HQ into the Kingdom.”

At K2 we have a wealth of expertise and experience, with a proven track record of providing high quality relocation services to corporate clients from a wide range of sectors through our two core services – Relocate (GM) and K2 Bespoke.

Over the coming months K2 will be providing commentary, recommendations and other useful content for businesses who are preparing to establish a regional HQ in the Kingdom of Saudi Arabia.

If you’re keen to find out more about how we can support your business, get in touch with a member of the team today to set up an initial conversation.

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