Key facts about setting up an RHQ in Saudi:
Understanding Saudi Regional Headquarters: A Gateway to Strategic Presence
The Regional Headquarters (RHQ) license, a collaborative initiative between the Ministry of Investment (MISA) and the Royal Commission for Riyadh City (RCRC), stands as a gateway for international companies to establish a strategic presence within the Kingdom of Saudi Arabia.
In February 2021, the Saudi Government unveiled an initiative encouraging foreign companies to establish a Regional Headquarters (RHQ) within the Kingdom, emphasizing its importance for fostering business engagements.
As the Kingdom attracts an influx of international businesses at an accelerated rate, the government launched its RHQ programme to be in effect in January 2024. Beyond commercial activities, RHQ licenses are essential for executing specific projects, including those initiated by the Public Investment Fund (PIF), such as NEOM and other governmental ventures. However, there's some ambiguity regarding their precise applicability in such scenarios.
To obtain this license, an entity must operate as a registered foreign company or branch in Saudi Arabia, maintain at least 2 subsidiaries outside both the Kingdom and its country of incorporation, and have a physical presence for regional administrative purposes only. Any commercial operation must be handled by MISA-licensed affiliates.
The RHQ license structure involves an annual fee of SAR 2,000, with an initial payment of SAR 10,000 in the first year, valid for 1 to 5 years. While not permitting commercial activities, it empowers RHQs to manage tasks like budgeting, marketing, and strategic planning.
Practically, an RHQ serves as a strategic support hub for subsidiaries and affiliates in the MENA region, providing direction and overseeing management operations. Additionally, the mandate to hire 15 employees within the first 12 months of operation, with flexibility in nationality, along with the need for 3 C-level executives, is integral to establishing an RHQ.
Benefits of RHQs:
Unlock a spectrum of advantages, including:
- Exemption from Saudization requirements: Enjoy a decade-long exemption from this stipulation.
- Work visas: Acquire work visas for Saudi nationals in restricted professions.
- Ajeer Program access: Extend opportunities to dependents of RHQ employees.
- Residency relaxation: Increase the age limit for male dependents' residency to 25 years.
- Professional accreditation exemption: Waive professional accreditation requirements if duly accredited in the country of origin.
- MISA subscription waiver: Access MISA investor services centers with waived subscription fees.
- Discounted services: Avail discounted rates and preferential treatment for MISA's services.
Tune into a detailed conversation between Alex Nicholls, Director of Expansion at AstroLabs, and Dubai Eye’s host to understand more about setting up an RHQ in Saudi.
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