Cityscape of Saudi capital Riyadh.
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DUBAI, United Arab Emirates — Saudi Arabia introduced a 30-year tax exemption package deal for overseas corporations establishing their regional headquarters within the kingdom, the most recent transfer in its aggressive marketing campaign to draw worldwide funding and headcount.
“The Ministry of Investment of Saudi Arabia, in coordination with the Ministry of Finance and the Zakat, Tax and Customs Authority today announced 30-year tax incentive package for The Regional Headquarters (RHQ) Program, to further streamline the process for multinational companies (MNCs) to establish their RHQ in Saudi Arabia,” the Saudi state press company wrote in an announcement Tuesday.
The supply features a 0% company tax fee for 30 years, which will probably be utilized for corporations “from the day they obtained their RHQ license,” the assertion learn.
The program “aims to attract MNCs to set up their RHQ in Saudi Arabia and position the Kingdom as the leading commercial, industrial and investment hub for the MENA region, by offering a range of benefits and premium support services that complement the Kingdom’s globally competitive value proposition,” the assertion added.
A controversial ultimatum
The kingdom grabbed investor consideration and sparked controversy in February 2021 when it first introduced its RHQ marketing campaign, declaring that any overseas firm that didn’t have its regional headquarters workplace in Saudi Arabia by the beginning of 2024 could be barred from doing enterprise with state entities.
The news surprised traders and expat employees, lots of whom noticed the transfer as a shot at Dubai, the United Arab Emirates industrial capital that’s house to the very best focus of Middle East regional headquarters.
In October of this yr, Saudi ministers made clear that the ultimatum nonetheless held agency: Foreign corporations might want to base their regional headquarters within the kingdom by Jan. 1, 2024 or be barred from profitable authorities contracts.
Many overseas traders are nonetheless skeptical of the power of Saudi Arabia — an infamously conservative Muslim theocracy recognized for its extremely criticized human rights file — to sufficiently appeal to overseas expertise.
Expats within the regional HQ hub of Dubai query the dominion’s skill to supply adequate quality-of-life providers like worldwide colleges, ample housing, and features of a extra Western life-style, similar to alcohol, which is presently unlawful in Saudi Arabia.
Saudi Arabia says the RHQ program has thus far licensed greater than 200 corporations to function their regional head places of work within the kingdom. And in an obvious response to the issues of many expat employees that households there would wrestle to seek out worldwide colleges for his or her kids, “seven international K-12 schools have announced their new campuses in the Kingdom,” the Saudi Press Agency assertion wrote.
“The tax incentive gives multinational companies operating in the region yet another reason to make Saudi Arabia home to their regional headquarters, on top of other benefits such as relaxed Saudization requirements and work permits for the spouses of RHQ executives,” Saudi Minister of Investment Khalid Al-Falih was cited by the SPA as saying.
The kingdom’s regional HQ drive is part of Vision 2030, an formidable marketing campaign launched by Crown Prince Mohammed bin Salman in 2016, which goals to create personal sector jobs and diversify its financial system away from oil as Saudi Arabia’s inhabitants — greater than 60% of whom are beneath the age of 30 — grows.
Source web site: www.cnbc.com
