Regional Headquarters KSA

In the rapidly changing business landscape across the Kingdom of Saudi Arabia (KSA), of particularly note is the Saudi Government’s announcement regarding the limitation on foreign companies which to not hold a Regional Headquarters (RHQ) in the Kingdom, contracting with KSA Government entities.

Set out below are the key requirements to be met and documents needed, in order to obtain an RHQ license:

Service Documentations:

1. Copy of the applicant’s commercial registration or license, attested at the Saudi Embassy in the respective country.
2. Copies of at least two commercial registrations or licenses issued in two different countries, excluding KSA and the country of the Multinational Group’s headquarters.
3. Annual audited consolidated financial statements of the last financial year, attested at the Saudi Embassy.

Note: Authorities are yet to clarify certain aspects, such as the operational requirements in three countries and the necessity of showing a profit in audited financial statements.

Service Rules and Restrictions:

1. The Multinational Group must have a minimum presence in two different countries, excluding the Kingdom of Saudi Arabia and the country in which the headquarters is located.
2. The RHQ must be established as a separate legal entity in KSA either as a company or as a registered branch of a foreign company.
3. The RHQ shall not directly conduct commercial operations that generate revenue other than RHQLicense activities.
4. Mandatory RHQ activities must commence within six months of issuing the License.
5. At least three optional RHQ activities must commence within one year of issuing the RHQLicense.
6. RHQ employees, including at least three at Executive Director and Vice-President levels, must possess relevant skills and knowledge developed at the headquarters or another regional headquarters of the Multinational Group.
7. The RHQ must employ at least 15 full-time employees within one year of issuing the RHQ License(Noting that there is an exemption from Saudization for the first 10 years).
8. The RHQ License is subject to cancellation under various conditions, including failure to commence required activities within stipulated time periods or violation of licensing regulations.

Service Fees:

• Annual license fee of (2000) Saudi Riyals.
• Subscription fee of (10,000) Riyals for the first year to obtain services from the Ministry of Investment investors’ relations centers.
• Subscription for subsequent years is free of charge.
• Payment of the determined financial consideration for the entire license period within 60 days of notification; non-payment within the specified period results in the license’s expiration.