The RHQ Edition
Vol. 15 — For Multinational Country Heads & GCs
Thirty years of zero corporate tax. The hard precondition for any Saudi government tender above SAR 1 million. The full mechanics of the Regional Headquarters Programme — and the operating realities behind running an RHQ.
Direct answer. The Regional Headquarters (RHQ) Programme is the most important tax and procurement reform Saudi Arabia has launched in a decade. Multinationals that establish their MENA RHQ in Saudi Arabia receive 30 years of 0% corporate income tax and 0% withholding tax on RHQ-related activities. From January 2024, an RHQ is also a hard precondition for bidding on Saudi government contracts above SAR 1 million. The RHQ is a coordination vehicle, not an operating one — it cannot generate revenue inside Saudi Arabia. Most serious entrants pair an RHQ (for tax + tender access) with an operational LLC (for in-Kingdom revenue). Setup runs 6–12 weeks; ongoing compliance is meaningful — minimum activities, minimum staff, minimum spend.
01 · Why it exists
Why Saudi Arabia is paying multinationals to relocate their MENA HQ from Dubai.
For three decades, Dubai was the default location for multinational MENA headquarters. Tax-free zones, mature infrastructure, easy mobility, English as the working language. By 2020, ~60% of Fortune 500 MENA HQs were in the UAE.
Saudi Arabia changed the equation in 2021 with the RHQ Programme. The carrot: 30 years of 0% corporate income tax (vs UAE's recently introduced 9%). The stick: from January 2024, no Saudi government contract above SAR 1 million can be awarded to a company without a Saudi RHQ. Given that Saudi public-sector procurement is several times the size of UAE public spending, the stick is a meaningful threat.
The combination has worked. Over 540 multinationals — Pepsi, Northrop Grumman, Bechtel, Deloitte, IHC, Schlumberger and counting — have established Saudi RHQs since 2022. The ones that move first lock in the longest tax windows.
02 · The mechanics
Activities permitted, activities forbidden, and the practical scope of the licence.
An RHQ is a coordination entity. It directs and supports subsidiaries elsewhere in the region but cannot itself generate revenue from Saudi customers. Permitted activities split into strategic and advisory.
Strategic activities (must perform at least six): regional strategy formulation, business coordination, group budgeting, regional product development, marketing and PR, sustainability oversight, regional supply-chain management, regional reporting, treasury, capital allocation, M&A coordination, regional government relations.
Advisory and support activities (must perform at least three): legal, accounting, HR, IT support, procurement, training, R&D, regional shared services, technical support.
Forbidden. Direct sales to Saudi customers, manufacturing or assembly in Saudi Arabia, holding Saudi-only IP, contracting with Saudi government entities for services (the RHQ unlocks the tender; the operational LLC delivers the contract).
03 · The numbers
What the 30-year incentive actually requires of the RHQ to remain in good standing.
Tax. 0% corporate income tax on RHQ activities for 30 years from licence issue. 0% withholding tax on RHQ-related dividend, interest and royalty flows. VAT applies as normal (5%, soon 15% for some categories) — RHQ status does not exempt VAT.
Staffing. By the end of year 3, the RHQ must employ a minimum of 15 staff in Saudi Arabia, including at least 3 C-suite-level executives (CEO/CFO/COO or equivalent). All must hold Saudi Iqamas — i.e. genuinely resident, not occasional visitors.
Activities. Minimum 6 strategic + 3 advisory functions performed from the Saudi RHQ. Not all Saudi-based — some can be performed from the RHQ for the wider region — but the centre of gravity must be in Saudi Arabia.
Reporting. Annual filing to MISA confirming activity scope and staffing; annual ZATCA filing showing 0% RHQ tax position. Both are substantive — MISA inspects.
04 · The setup
What setting up an RHQ actually involves end-to-end.
Phase 1 (weeks 1–2): structuring. Decide whether the RHQ stands alone or pairs with an operational LLC. Identify the regional CEO who will sit in Riyadh. Confirm group corporate documents are apostille-ready.
Phase 2 (weeks 2–6): MISA RHQ licence. File RHQ application with MISA. Attach group financials, regional org chart, activity plan, target staffing trajectory. MISA review and licence issuance: 4–6 weeks.
Phase 3 (weeks 6–10): Commercial Registration. CR issued by Ministry of Commerce against the RHQ licence. Articles of Association notarised. Office address in Riyadh — most RHQs cluster in KAFD, Diplomatic Quarter or King Abdullah Financial District.
Phase 4 (weeks 10–14): operational stack. ZATCA registration, GOSI, Qiwa, Muqeem and Mudad — but RHQs operate the simpler "support services" tax track. Bank account, regional CEO Iqama, first 3–5 hires.
Steady state (year 1–3): scale to compliance minima. Build to 15 staff including 3 C-suite. Run the strategic and advisory activity register. File annual MISA and ZATCA returns.
05 · The decision
The three profiles for whom the RHQ is operationally transformative — and the one for whom it is overkill.
Yes — multinationals serving Saudi government clients. Tenders above SAR 1M are gated by RHQ status. If your business model touches public-sector Saudi procurement at any scale, the RHQ is a hard requirement, not an option.
Yes — regional groups with substantive MENA operations. If you run subsidiaries in 3+ MENA markets and currently coordinate from Dubai, Bahrain or Cairo, the 30-year tax window combined with Riyadh's growing weight in regional capital makes the relocation case compelling.
Yes — regional headquarters with mobile C-suite. If your CEO, CFO or regional MD already spends a third of their time in Saudi Arabia, formalising the RHQ is operational tidying — and unlocks the tax position.
No — single-market players who only sell into Saudi Arabia. An operational LLC alone is simpler, cheaper and sufficient. The RHQ adds compliance burden you do not need.
No — early-stage entrants validating the market. Use an EOR or a lean LLC to test demand. Stand up the RHQ once the regional case is proven and you have C-suite willing to relocate.
The RHQ Programme is the largest single tax incentive in the Gulf, and one of the largest in the world. The companies that move first lock in the longest tax windows. The companies that wait will pay the cost in foregone government contracts.
30 years of 0% corporate income tax and 0% withholding tax on RHQ-related activities, from the date of RHQ licence issuance.
Yes — since January 2024, government contracts above SAR 1 million can only be awarded to companies with a Saudi RHQ.
No. The RHQ is a coordination vehicle — it directs and supports subsidiaries elsewhere in the region. For in-Kingdom revenue, pair it with an operational LLC.
15 employees by end of year 3, including at least 3 C-suite executives (CEO/CFO/COO or equivalent), all Iqama-holding Saudi residents.
6–12 weeks for the MISA licence and Commercial Registration, plus a further 4–8 weeks to build out the operational stack and first hires.
Both, in most cases. RHQ for tax position and tender eligibility; LLC for in-Kingdom revenue. Tamra structures both as a single workstream.
Tamra runs MISA RHQ licensing, CR, the operational stack and the first hires as one workstream. 30 minutes to brief us.
Talk to Tamra