Investment ministry seeks feedback on licensing, supervision rules for RHQ

Saudi Arabia’s Ministry of Investment published a draft law regulating the licensing and supervision of regional headquarters (RHQ) of multinational companies on the “Istitlaa” platform for public consultation.

The draft defines RHQ activities as providing strategic supervision, administrative direction, and internal business support for the multinational company’s branches and subsidiaries across the region.

The rules aim to regulate the practice of RHQ activities, establish regulatory enablers for global firms to set up their headquarters in the Kingdom, and specify mandatory and optional activities that such entities must undertake.

They also outline licensing procedures, compliance standards, and monitoring mechanisms by the ministry.

Under the draft law, licensed RHQ of multinational companies will be granted incentives, including a 0% income tax rate and 0% withholding tax on dividend distributions and certain cross-border payments for a renewable 30-year period.

Incentives take effect from the licensing date, with the ministry reserving the right to revoke them fully or partially if compliance requirements are not met.