The KSA RHQ Program

The KSA RHQ Program

1.1 Overview

1.1.1 Program Objectives

The RHQ Program supports Saudi Arabia's Vision 2030 by encouraging multinational companies to establish regional headquarters in the Kingdom. As of the RGAC Effective Date, KSA government entities will only contract with companies having an RHQ in Saudi Arabia.

1.1.2 Definitions and Scope

Regional Headquarters: A unit of a multinational entity established in KSA to manage and direct its MENA operations.

Multinational Entity (MNE): A group with a foreign parent entity and operations in multiple jurisdictions.

MENA Region: Includes GCC countries, Yemen, Iraq, Jordan, Palestine, Lebanon, Syria, Egypt, Libya, Tunisia, Algeria, Mauritania, and Morocco.

1.2 Role and Nature

1.2.1 Role

The RHQ must serve as the central administrative and strategic hub for the MENA region, with operations in at least two other countries.

1.2.2 Legal Structure

The RHQ can be set up as an LLC or a Branch. It cannot engage in revenue- generating commercial activities directly; such activities must be conducted by separate entities with the appropriate licenses.

1.2.3 Incentives

The RHQ Program provides various incentives, including tax exemptions, Saudization exemptions, and preferential treatment in MISA services.

1.3 License Requirements

1.3.1 Eligibility

Acino must meet MNE criteria and have a presence in at least two countries, excluding KSA and the country of its parent entity.

1.3.2 Capitalization

Minimum capital is not strictly prescribed, but SAR 10,000 is suggested as a minimum, with a recommendation of SAR 500,000 to cover initial expenses.

1.3.3 Employees

The RHQ must have at least 15 employees, including 3 in executive positions, within the first year. MISA is expected to provide more detailed employee criteria.

1.3.4 Physical Office

The RHQ must have a physical office in KSA. It can be located within existing commercial premises if appropriately separated and approved by the Municipality Department.

1.3.5 Activities

The RHQ must perform mandatory activities (e.g., strategic direction, business planning) and choose 3 optional activities (e.g., human resources management, financial management). These activities must start within specified time frames.

1.3.6 Duration and Fees

The RHQ license can be valid for 1 to 5 years. The one-off service fee is SAR 10,000, with an annual fee of SAR 2,000.

1.3.7 Time Frame

Establishing the RHQ is expected to take around 6 weeks from submission of all required documentation, though this may vary.

1.3.8 Incorporation

The RHQ will be incorporated after obtaining the RHQ license and a Commercial Registration Certificate.

1.4 Benefits

1.4.1 Key Benefits

-Exemption from Saudization requirements for 10 years

-Unrestricted work visas for RHQ employees

-Tax exemptions on corporate income and withholding tax for 30 years

-Access to MISA services at discounted rates

-Ability to tender for government contracts