Starting Next Year, 'Saudi Regional Headquarters Attraction Policy' Applied... What Will Change?

KOTRA Holds 'Regional Headquarters Attraction Policy (RHQ) Webinar' with Saudi Ministry of Investment

KOTRA announced on the 23rd that it held a briefing session on the 'Saudi Regional Headquarter Attraction Policy (Regional Head Quarter, hereinafter RHQ)' with the Saudi Ministry of Investment as a follow-up support to the Saudi top-level economic diplomacy.

The Saudi government has a policy that from January 1, 2024, multinational companies that do not have a Middle East regional headquarters in Saudi Arabia will be restricted from bidding on government procurement projects.

Exterior view of the KOTRA headquarters.

Omar Alnefishi, RHQ Partnership Director of the Saudi Ministry of Investment, who participated as a speaker at this briefing, said, "Especially multinational companies already operating in the Middle East need to have a thorough understanding of the RHQ program to participate in Saudi government procurement projects from next year," adding, "Since the judgment criteria vary by industry and company, please consult with the Ministry of Investment."

If a Middle East regional headquarters is established in Saudi Arabia, a separate 'RHQ license' must be obtained in addition to the 'existing business license.' Furthermore, within one year of obtaining the license, 15 headquarters staff must be hired, and the mandatory activities designated by the Ministry of Investment must be carried out.

The Middle East regional headquarters established under the RHQ program are granted various incentives beyond eligibility to participate in government procurement projects. These include ▲exemption from the mandatory employment of Saudi nationals for 10 years ▲relaxation of visa-related regulations ▲benefits for dependents, among others.

Kim Doosik, head of the KOTRA Riyadh Trade Center, said, "In addition to the RHQ program, Saudi Arabia is strengthening policies that favor domestic companies in public and private sectors and policies to increase the proportion of domestic production," adding, "It is necessary to fully consider these policy trends when our companies establish market entry strategies for Saudi Arabia in the future."