As an extension of the developmental efforts in the Kingdom of Saudi Arabia to attract regional headquarters of global companies, the Kingdom announced in February 2021 the prohibition of government entities from contracting with companies whose regional headquarters are not located in the Kingdom by January 1, 2024. This is aimed at promoting international cooperation, diversifying the economy, providing local employment opportunities, and increasing investments.
Additionally, the Kingdom has facilitated investment procedures and provided necessary support to international companies for establishing and operating their regional headquarters. This includes providing incentive programs, incentives, and facilitations. This also includes the announcement of the tax regulations for regional headquarters issued by the Board of Directors of the Zakat, Tax, and Customs Authority on 23/07/1445 AH, corresponding to 04/02/2024 AD, which regulate the qualification criteria for a 30-year exemption from income tax and withholding tax on payments made by non-resident individuals to the regional headquarters. The period for granting tax incentives to the regional headquarters begins on the date of obtaining the regional headquarters license for the qualified activities until the occurrence of any of the following: the expiration of a 30-year period, the entity ceases to be a regional headquarters for any reason. This is in addition to complying with the requirements and conditions stipulated in the tax regulations for regional headquarters.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
