The Saudi Arabia Regional Headquarters (RHQ) program is a great chance for German entrepreneurs to invest in Saudi Arabia. The program began on January 1, 2024, and aims to bring 480 multinational corporations (MNCs) to Saudi Arabia by 2030. This will help the country’s economy become less dependent on oil. As a German entrepreneur, you can take advantage of this opportunity to set up headquarters for your business in Saudi Arabia. This guide will help you understand the steps you need to take and give you all the information you need to succeed.
Program objectives and benefits for entrepreneurs
Saudi Arabia has introduced the RHQ program as part of its Vision 2030 strategy to attract international companies and invest in Saudi Arabia. The program offers various incentives and benefits to encourage entrepreneurs to set up shop in the country. Here’s what you need to know:
Visa benefits:
As a participant in the RHQ program, your company will have the freedom to grant an unlimited number of visas to your staff members. So, it will make it easier for you to bring in the right talent from around the world.
Saudization regulations:
You’ll receive a 10-year waiver from Saudization regulations, which require companies to employ a certain percentage of Saudi nationals. This will give you more flexibility in building your team and focusing on your business growth.
Professional accreditations:
Your RHQ employees with valid accreditations from their home countries will not need to obtain new ones in Saudi Arabia. This will save you time and resources while ensuring that your staff remains qualified to work in the country.
Dependent’s employment opportunities:
The program also aims to provide employment opportunities for the dependents of RHQ staff members. This can be a great way to support your team and their families while they contribute to your company’s success.
Corporate tax benefits:
As an RHQ participant, you’ll enjoy a zero percent corporate income tax and withholding tax rate for 30 years from the issuance of your RHQ license. So, this will help you keep more of your profits and reinvest them back into your business, accelerating your growth and success in Saudi Arabia.
Setup headquarters in Saudi Arabia
As an entrepreneur setting up a regional headquarters (RHQ) in Saudi Arabia, you may be eligible for tax incentives offered by the Kingdom. However, your RHQ must meet certain criteria to prove that it has a meaningful presence and is actively contributing to the local economy.
Here’s a comprehensive guide to the eligibility criteria for RHQs to benefit from tax incentives in Saudi Arabia:
- Valid License: Your RHQ must have a valid license issued by the Saudi Arabian Ministry of Investment (MISA). The license should authorize your RHQ to operate within the scope of its activities.
- Physical Presence: Your RHQ must have a substantial physical presence in Saudi Arabia. This includes having appropriate office space that matches the scale of your operations and can accommodate all your employees.
- Operational Expenditure: Your RHQ must demonstrate a significant level of operational expenditure within Saudi Arabia. This expenditure should include costs like office rent, employee salaries, and other business-related expenses.
- Revenue Generation: Your RHQ must generate revenue from its activities within the Kingdom.
- Employment: Your RHQ should employ a certain number of full-time employees in Saudi Arabia. This number may vary based on the size and nature of your operations. Both locals and expatriates can be employed, depending on the situation. All employees must have the necessary qualifications and skills to perform their duties effectively.
- Local Management: All core business activities of your RHQ must genuinely take place within Saudi Arabia. This includes conducting board meetings and making key strategic decisions.
- Local Director: At least one director of your RHQ must be a Saudi Arabian resident, ensuring that there’s local oversight and involvement in the management process of the RHQ.
By meeting these criteria, your RHQ can prove its economic substance in Saudi Arabia and qualify for valuable tax incentives. This will help you save money, expand your business, and achieve long-term success in the Kingdom.
Take a Leap with Business Link
Are you a German entrepreneur who wants to start a business in KSA? Contact Business Link to get professional guidance for your move to Saudi Arabia. We understand what it takes to be an entrepreneur and can give you the support and advice you need in the Saudi market. So, if you’re ready for a new challenge and want to be part of a growing business community, choose Business Link to help you achieve your goals.
