Saudi Arabia’s Regional Headquarters (RHQ) Program offers unprecedented 0% corporate income tax on qualifying RHQ income and 0% withholding tax (WHT) on eligible payments. Designed for multinational corporations, this incentive supports Vision 2030’s goal of attracting foreign investment, creating jobs, and strengthening the Kingdom’s position as a regional business hub.
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Key Benefits for Corporate Taxpayers
- 0% Corporate Income Tax on all qualifying RHQ income.
- 0% Withholding Tax on dividends, related-party payments, and specific third-party service payments necessary for RHQ operations.
- Validity for 30 years from the date of licensing, with renewal options.
- Enhanced reputation and investor confidence under Saudi Arabia’s Vision 2030.
Eligibility Requirements
- Holding a valid RHQ license issued by the Ministry of Investment (MISA).
- Maintaining economic substance in Saudi Arabia — including adequate staff, physical premises, and a resident director.
- Conducting only qualifying activities as approved in the RHQ license.
Economic Substance Criteria
To retain the tax benefits, RHQs must demonstrate genuine operations within the Kingdom:
- Board meetings and strategic decision-making occur in Saudi Arabia.
- Premises suitable for RHQ activities are maintained throughout the year.
- Full-time employees with relevant expertise are based in the Kingdom.
- Annual Economic Substance Report (ESR) is submitted to ZATCA.
Compliance Obligations
- Annual filing of tax/Zakat returns, even with 0% liability on qualifying income.
- Registration for VAT if taxable supplies exceed SAR 375,000.
- Adherence to Saudi transfer pricing rules and documentation requirements.
- Submission of ESR and maintaining proper business records.
Application Roadmap
- Assess eligibility and prepare a detailed RHQ business plan.
- Apply for MISA RHQ license and align corporate governance with Saudi requirements.
- Establish operations — hire staff, secure premises, and set up local management.
- Register with ZATCA for tax/Zakat and VAT (if applicable).
- Implement internal controls to ensure only qualifying income enjoys 0% rates.
- File returns and ESR annually to maintain compliance.
Why Act Now?
The RHQ incentive program offers a rare opportunity for multinational corporations to centralize operations in Saudi Arabia with minimal tax costs. By acting now, businesses can secure 30 years of 0% CIT and WHT benefits, enhance regional management efficiency, and gain a strategic foothold in the Middle East.
