Understanding Saudi Arabia’s Regional Headquarters (RHQ) License

In an effort to consolidate its position as a leading business hub in the Middle East and North Africa (MENA) region, the Kingdom of Saudi Arabia introduced the Regional Headquarters (HRQ) License. The HRQ license is an initiative that aims to attract multinational companies to establish their regional command center within Saudi Arabia.

What is the Regional Headquarters (RHQ) License?

The RHQ license allows multinational companies to establish a regional headquarters in Saudi Arabia as a registered foreign company or a branch. This headquarters is not permitted to conduct any commercial activities. Instead, it serves to oversee, support, manage and provide strategic direction to the company’s branches, subsidiaries and affiliates operating in the MENA region.

In order to engage in commercial activities in Saudi Arabia, the company must have separate commercial registrations.

Benefits of the RHQ License

The RHQ license comes with a robust suite of incentives aimed at easing business setup and enabling efficient regional operations. These benefits reflect Saudi Arabia’s Vision 2030 commitment to fostering a globally competitive business environment:

• 30-year tax relief on corporate income tax and withholding tax.
• Eligibility to bid on government contracts.
• 10-year exemption from Saudization requirements.
• Visa limit exemption and fast-track issuance for employees and executives.
• Waiver of professional accreditation requirements for foreign professionals.
• Spouse work permits and dependent age extension to 25 years.
• End-to-end support services, including business setup, personal relocation and concierge assistance.

These measures are designed to attract multinational companies and support their long-term success in the Kingdom and across the MENA region.

RHQ License Eligibility Criteria

To qualify for an RHQ license, a multinational company must meet the following conditions:

• Operate as a registered foreign company (LLC or branch) in Saudi Arabia.
• Have at least two subsidiaries or branches in countries other than Saudi Arabia and its country of incorporation.
• Establish a physical office in the Kingdom.
• Employ at least 15 full-time staff within the first year, including three corporate executives (e.g., CEO, CFO, VP).
• Begin RHQ operations within six months of license issuance.
• Provide mandatory RHQ activities and at least three optional activities to its regional entities.

Understanding RHQ Activities

Multinational companies setting up a RHQ in Saudi Arabia must do two things:

1. Carry out essential management tasks:

These include the core responsibilities expected of any RHQ, such as:

• Provision of strategic direction
  • Formulate and monitor the regional strategy
  • Coordinate strategic alignment
  • Embed products and/or services in the region
  • Support acquisitions, mergers and divestments
  • Review of financial performance

2. Offer at least three additional support services:

These services demonstrate the RHQ’s active role in supporting affiliated entities across the Middle East and North Africa (MENA) region. Examples include:

• Provision of management function
  • Business Planning
  • Budgeting
  • Business coordination
  • Identification of new market opportunities
  • Monitoring of the regional market, competitors, and operations
  • Marketing plan for the region
  • Operational and financial reporting

Depending on the RHQ’s structure and scope, other support services may include legal, HR, IT or compliance-related functions.

Optional RHQ Activities

Beyond the mandatory tasks, companies can customize their RHQ with a wide range of optional services. These fall into several categories:

Business & Financial Services

• Financial management, foreign exchange and treasury center services
• Accounting
• Auditing
• Operations control
• Production management

People & Talent

• Human resources and personnel management
• Training services

Commercial & Strategic Support

• Sales and marketing support
• Advisory services
• Research and analysis
• Compliance and internal control
• Legal services

Technical & IT Capabilities

• Technical support or engineering assistance
• Network operations for IT systems
• Research and development
• Intellectual property rights management

Supply Chain & Trade

• Logistics and supply chain management
• International trading
• Sourcing of raw materials and parts

How Envoy Global Can Help Employers Navigate the RHQ Requirement 

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