Page 13 - ICAI UAE TAX UPDATE_MAY 2024

4. ARTICLES FROM MEMBERS

4.2 Setting up of Regional

Headquarter in

The Kingdom of Saudi Arabia CA Devang Mehta

The Kingdom of Saudi Arabia (KSA) issued licenses 2. The entity then needs to select the Activities, i.e.,
to 180 companies to set up regional headquarters in Mandatory Activities and Optional Activities. It must
the Kingdom in 2023, surpassing the targeted 160. In carry out at least 3 of the optional activities for the
2021, it issued licenses to 44 global companies to set branches, subsidiaries, and/or companies related to the
up RHQs, and in 2022, 80 licenses were issued. At this multinational group, at least within one year from the
rate, it can be said that the Vision 2030 targets are on date of granting the license.
track to be achieved. Furthermore, starting from January
1st, 2024, a new law will restrict government contracts 3. Documents required for obtaining the RHQ license
between entities owned by the Saudi government and include copies of at least two commercial registrations
international businesses that do not have a Regional or commercial licenses issued in two different countries,
Headquarters in Saudi Arabia. excluding the Kingdom of Saudi Arabia and the country
in which the headquarters of the multinational company
The Regional Headquarter (RHQ) Program in the is located. Additionally, a copy of the applicant’s
Kingdom of Saudi Arabia (KSA) is a unit of a multinational commercial registration or commercial license for the
company duly established under the laws of Saudi Arabia parent company, which should be located outside the
for the purpose of supporting, managing, and providing MENA region, global corporate financial statements
strategic direction to its branches, subsidiaries, and audited for either the latest finished year or the one
affiliates operating in the MENA region. before if the most recent one isn’t finalized yet, and a
completed RHQ License Online Application Form are
Process of setting up an RHQ License in KSA: required.
4. RHQs will have a minimum capital investment of SAR
1. To qualify for an RHQ license, a multinational 10,000.
company must have a presence in at least two countries
(excluding its headquarters and Saudi Arabia), operate 5. Regional Headquarters can be set up in any city in
in the MENA region, and engage in activities categorized Saudi Arabia.
under Strategic Direction, Management Function, or
Support functions through its branches, subsidiaries, or
affiliates in the MENA region.
www.icaidubai.org 13

UA E TAX UPD ATE NEWSLET TER ISSUE 02 - May 2024 ISSUE 02 - May 2024 UA E TAX U PDAT E NEWSLET TER