Thus far, the initiative has drawn 200 foreign businesses.
Saudi Arabia announced on Tuesday that it will provide tax breaks, including a 30-year corporate income tax exemption, to foreign businesses that choose to establish their regional headquarters in the kingdom.
The leading oil exporter in the world declared in February 2021 that, by January 1, 2024, it will no longer be giving government contracts to businesses whose regional headquarters are not in the kingdom.
The action is a component of Crown Prince Mohammed bin Salman’s plan to wean Saudi Arabia off of its oil dependence by developing other businesses that will employ Saudi workers.
The Saudi Ministry of Investment and the Royal Commission for Riyadh City together launched the scheme to draw foreign corporations’ regional headquarters to Saudi Arabia. By offering a range of advantages and unique support services, the program seeks to draw in foreign businesses to establish their regional headquarters in Saudi Arabia and position the kingdom as their top option in the Middle East and North Africa.
According to state news agency SPA, the tax exemption package for regional headquarters comprises a zero percent rate for the regional entity’s income tax and for the withholding tax on those entities’ approved activities over a 30-year period.
It further stated that foreign businesses will profit from the tax exemption package as soon as their licenses are granted.
According to a comment from Saudi Investment Minister Khaled Al-Falih, the program has drawn 200 foreign businesses thus far.
According to SPA, Saudi Finance Minister Mohammed Al-Jadaan stated, “The new tax exemptions granted on regional headquarters activities will give… international companies in the kingdom more clarity of vision and stability.”
“We anticipate inviting additional foreign enterprises to partake in endeavors across all domains, encompassing expansive projects, and our arrangements to accommodate significant events like the Asian Winter Games in 2029 and the Expo 2030,” stated Jadaan.
Since the kingdom announced in October that the deadline will be enforced, foreign corporations have been rushing to comply with the Saudi need to relocate their regional headquarters.
