Saudi Arabia's Regional Headquarters (RHQ) Programme asks a direct question of every multinational active in the Middle East and North Africa: where is your regional decision-making based? For companies that sell to, or plan to bid for work with, Saudi government entities, the answer now has commercial consequences. This guide explains what an RHQ is, why it matters, what has been announced, and how to decide whether it is the right form of presence for your company.
What is a Saudi Regional Headquarters?
An RHQ is a licensed entity in the Kingdom from which a multinational group directs and manages its operations across the MENA region. It is not a sales office or a project branch. Its purpose is strategic direction, management and support for the group's regional affiliates.
The programme is a joint initiative of the Ministry of Investment (MISA) and the Royal Commission for Riyadh City, first launched in 2021. RHQ licences are issued by MISA, not by private advisers.
Why it matters: government contracting
The main driver for many companies is procurement. Under regulations approved by the Council of Ministers in December 2022 and in effect since 1 January 2024, Saudi government agencies are restricted from contracting with foreign companies that maintain their regional headquarters elsewhere in the MENA region and appear on a list maintained by MISA. The restriction also extends to their related parties, such as agents, distributors and suppliers of their goods or services.
The regulations include thresholds and exceptions, for example lower-value procurements, works performed outside the Kingdom, cases where only one technically acceptable offer exists, and emergencies. They also provide a route for exemption requests. Because the scope and exceptions can be amended, review the current text with the competent authority or a licensed legal provider before relying on any exception.
The announced incentives
Tax
In December 2023, MISA, the Ministry of Finance and the Zakat, Tax and Customs Authority (ZATCA) announced a 30-year tax incentive package for licensed RHQs. It includes a 0% rate for:
- Corporate income tax on income from eligible RHQ activities
- Withholding tax related to approved RHQ activities
The relief applies from the date the RHQ licence is obtained. ZATCA subsequently published dedicated RHQ tax rules that add economic substance conditions, such as adequate premises in the Kingdom, management and strategic decisions taken in the Kingdom, qualified full-time staff proportionate to the activity, and separate accounting for any non-eligible activities. Income outside eligible activities remains subject to the normal rules. Have a licensed tax adviser confirm how these rules apply to your structure.
Non-tax
Official statements also point to relaxed Saudization requirements and work permits for the spouses of RHQ executives. Advisers report further measures relating to visas and dependants. The details and durations are set by the authorities and can change, so confirm the current package directly with MISA.
The licensing route and main obligations
A note on terminology: under the Investment Law in force since 2025, MISA's general investment licence has been replaced by investment registration. The RHQ, however, remains a dedicated licence. MISA has continued to report RHQ licences issued, and in September 2025 it published draft Rules Regulating the Licensing and Supervision of Regional Headquarters for public consultation. Once final, these rules may adjust the conditions described below, so check the version in force.
In broad terms, the route looks like this:
- Eligibility check. The group should be a multinational with a presence, through subsidiaries or branches, in at least two countries other than Saudi Arabia and its home country.
- Entity choice. The RHQ is set up as a dedicated branch or subsidiary. According to published adviser guidance, RHQ functions cannot simply be run from an existing operating entity in the Kingdom.
- RHQ licence from MISA. Followed by the usual commercial, labour and tax registrations. See our guide on setting up a company in Saudi Arabia.
- Activation. Premises, hiring and the start of operations within the timeframes MISA sets after licensing.
- Ongoing compliance. Annual reporting and returns, and continued alignment with MISA's criteria and ZATCA's substance conditions.
The core obligations to plan for are:
- Activities. The RHQ must carry out the mandatory strategic and management activities defined by MISA, plus a minimum number of optional activities (ZATCA's rules refer to at least three).
- Staffing. Published guidance from major law firms describes a minimum number of full-time employees, including senior executives, within the first year after licensing. Treat this as indicative and confirm current thresholds with MISA.
- Real substance. Decision-making, leadership presence and spending in the Kingdom must match the regional role you claim.
Is an RHQ the right presence for you?
An RHQ is a strategic commitment, not a formality. Consider these questions:
- Who are your Saudi customers? If government agencies or government-owned entities are central to your pipeline, the procurement rules weigh heavily. If your customers are mainly private, the case rests more on market strategy and incentives.
- Where is regional management today? Moving regional leadership is an organisational decision with people, cost and governance implications.
- Do you have regional scope? If you operate only in Saudi Arabia, an RHQ may not fit. A local subsidiary or branch may be more appropriate.
- Can you meet substance requirements? Tax relief depends on real activity, staff and decision-making in the Kingdom.
Alternatives include a commercial subsidiary, a foreign company branch, or working through a local partner. Our guide to Saudi market entry options compares these routes, and Saudization and Nitaqat explains workforce rules that apply to most entities.
How TAQUDI helps
TAQUDI, owned and operated by ALDUR Holding, helps you assess whether an RHQ fits your strategy, map the route and obligations, compare presence options, and plan the sequence. We shortlist and connect you with appropriately licensed legal, tax and corporate service providers for regulated work, and we coordinate the steps, meetings and follow-up. We do not issue licences or provide legal or tax advice, and we are not affiliated with MISA or any government body. Learn more about our licensing coordination, company set-up and workforce planning support.
The best first step is clarity. Start with the Saudi Entry Diagnostic to see whether an RHQ, or another form of presence, fits your plans, or contact us to discuss your situation.
Frequently asked questions
What is the Saudi RHQ Programme?
It is a programme run jointly by the Ministry of Investment (MISA) and the Royal Commission for Riyadh City that encourages multinational companies to base their MENA regional headquarters in Saudi Arabia, through a dedicated RHQ licence and a package of incentives.
Do I need an RHQ to work with the Saudi government?
Since 1 January 2024, Saudi government agencies have been restricted from contracting with foreign companies whose regional headquarters is elsewhere in MENA and which appear on MISA's list, and with their related parties. Thresholds, exceptions and exemption routes exist, so confirm how the current regulations apply to your company with the competent authority or a licensed legal provider.
What tax incentives were announced for RHQs?
In December 2023, MISA, the Ministry of Finance and ZATCA announced a 30-year package with a 0% rate for corporate income tax and for withholding tax related to approved RHQ activities, applying from the date of the RHQ licence. ZATCA's rules add economic substance conditions. A licensed tax adviser should confirm how they apply to you.
What are the main eligibility and staffing requirements?
The group should operate through subsidiaries or branches in at least two countries other than Saudi Arabia and its home country. Published law-firm guidance describes a minimum number of full-time employees, including senior executives, within the first year. Requirements can change, so confirm current criteria with MISA.
Is the RHQ licence the same as MISA investment registration?
No. Under the Investment Law in force since 2025, general investment registration replaced the former investment licence, while the RHQ remains a separate licence issued by MISA. MISA consulted on draft RHQ licensing rules in September 2025, so confirm the current procedure with MISA.
Does TAQUDI obtain the RHQ licence for us?
No. RHQ licences are issued by MISA. TAQUDI helps you assess fit, plan the route, shortlist and connect you with appropriately licensed providers for regulated steps, and coordinate the process and follow-up.