Frequently Asked Questions
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FAQs
Everything you need to know about the ministry.
RHQ Program is a joint initiative by the RCRC and MISA to position the Kingdom as the leading regional hub for multinational companies.
An RHQ in the Kingdom of Saudi Arabia is a unit of MNC duly established under the laws of Saudi Arabia for the purpose of supporting, managing, and providing strategic direction to its branches, subsidiaries and affiliates operating in MENA region.
A Multinational Group is a group that has a foreign parent entity and which carries on business in more than one jurisdiction through the parent entity, its subsidiaries, branches or affiliates.
MNC can apply for this service to manage and supervise the strategic direction, functions, and businesses conducted by their branches, subsidiaries and affiliates in MENA region as well as in other regions globally.
MENA region includes the countries of the Gulf Cooperation Council (Saudi Arabia, United Arab Emirates, Kuwait, Bahrain, Oman, and Qatar), Yemen, Iraq, Jordan, Palestine, Lebanon, Syria, Egypt, Libya, Tunisia, Algeria, Mauritania, and Morocco. In addition to the MENA region, the Multinational Group is free to manage entities in additional regions and jurisdictions through the RHQ.
The minimum eligibility criteria for an RHQ license is that the MNC has a minimum presence in two different countries, excluding the Kingdom of Saudi Arabia and the country in which the headquarter of the MNC is located, either through subsidiaries or branches.
The RHQ of the MNC must be either a registered branch of a foreign company in Saudi Arabia, or a subsidiary of an MNC that is established in Saudi Arabia.
The RHQ activities are classified in two categories (i) mandatory activities; and (2) optional activities.
The mandatory RHQ activities are the provision of strategic direction and management functions. RHQ strategic direction functions include:
Drafting and monitoring the regional strategy.
Coordination of strategic harmonization.
c) Include products and/or services in the region.
d) Support acquisitions, mergers and divestments.
e) Review financial performance.
Management functions include:
Business planning.
– Budgeting.
Coordination of business.
Identify new market opportunities.
Monitoring the regional market, competitors and operations.
Marketing plan for the region.
Operational and financial reporting.
The optional RHQ activities are:
Sales and marketing support
Human resources, personnel management
Training services
Financial management, foreign exchange and treasury center services
Compliance and internal control
Legal
Accounting
Research and analysis
Audit
Advisory services
Operations Control
Logistics and supply chain management
No. The minimum activities that the RHQ must provide are the mandatory RHQ activities – provision of strategic direction and management functions –, in addition to three optional RHQ activities. For the optional RHQ activities, the applicant can select any of the activities mentioned under Q3 above.
RHQ mandatory activities must commence within six months after the grant of the RHQ License by MISA, and the three RHQ optional activities must commence before the end the first year of receiving the RHQ License.
No. The RHQ License is granted to only perform RHQ activities specified in the Service Manual (mandatory and optional RHQ activities). If the Multinational Group, that holds the RHQ License, wishes to conduct commercial operations and/or other activities than the RHQ activities, the Multinational Group should obtain the required license for such commercial operations and/or activities to be conducted under a different entity than the RHQ.
The RHQ license duration ranges from 1 year to 5 years (based on applicant selection).
The RHQ License has an annual license fees of SAR 2,000 and an additional service fees of SAR 10,000 for the first year only. Additional fee waivers may be applicable for specific tiers of the RHQ License.
A: The required documents to apply for an RHQ License are:
a) Copies of at least two commercial registrations or commercial licenses of the MNC issued in two different countries (excluding the Kingdom of Saudi Arabia and the country in which the headquarters of the Multinational Group is located) attested at the Saudi Embassy in the respective countries
– an organizational structure outlining the relationship between the headquarters and the entities that will be managed at the regional level by the RHQ;
– a description of the existing business and operating activities of the entities that will be managed at the regional level by the RHQ; and
– the estimated operating costs of the RHQ for the first three years of its operation.
d) A completed RHQ License Application Form (available at MISA e-services)
There may be additional documents required for specific tiers of the RHQ License.
E ) the commercial regestraion of the mother company
There may be additional documents required for specific tiers of the RHQ License. And note
A branch of the parent company or subsidiary of the parent company outside Saudi Arabia.
b) The annual audited financial statements of the applicant for the last fiscal year preceding the application date
c) A completed RHQ Development Form (available at MISA e-services) which must provide the following:
The license of regional headquarters must be a separate branch of the foreign company.
Yes, staff can be transferred to regional headquarters without having to terminate their services.
Yes, the company can use the available space to reduce the cost of capital.
The company can have more than one regional headquarters and each headquarters offers a different service.
• Foreign entity branch
• Individual limited liability company
Only one activity 701011 the Activities of regional head Quarters for Foreign companies
No, it is not required to be in Riyadh. the regional headquarters can be set up in any city in Saudi Arabia.
All visas in the labor office can be obtained.
Yes
Yes
valid zakat certifcate
No
currently there are several benefits exemption from Saudization for 10 years, husband or wife work permit and extension of the life of dependents up to 25 years, exemption from professional accreditation for some jobs such as accounting, investment and others except engineering and medicine., exemption from the visa limit and issuance and acceleration , comprehensive services (business, personal and concierge, government tenders ) providing the three executives with a Premium residence for a renewable period of one year
No
No
The expected duration of the license issuance may take 3 to 5 working days, but all procedures for the incorporation of the company are 6 to 8 weeks.
By reaching with international office staff and explaining the procedures and details of the regional office or through the online services of the ministry of investments
yes there is electronic form for the regional headquarters development plan when applying for a regional headquarters license but requires the submission of and is submitted when the application is submitted and business plan is not requires
The optional activities can be added when applying for the investment license through the online portal
There’s no pledge needed
Yes, the company needs to certified their documents in the case of medium-sized companies, but in the case of large or listed companies, there documents don’t need to be certified.
yes – Regional office license
It is possible to use financial statements of one of the branches of the company if it have the same name as the parent company, and in the case of a difference in name, a document is submitted showing the relationship between the two companies.
Yes
Yes
After issuing the regional headquarters license from the Ministry of Investment, the rest of the procedures are completed in other government agencies such as issuing the commercial register from the Ministry of Commerce, opening a file with the Ministry of Human Resources and Social Development, and other government procedures..
.
From January 1st, 2024, a new law will restrict government contracts between entities that are owned by the Saudi government and international business/companies that do not have a regional headquarters in Saudi Arabia.
Any government entity that is governed by the government procurement and tender laws such as Ministries, Authorities, Commissions, and any other wholly owned government entity.
Regarding semi-government entities, the policy is underdevelopment and further announcement will be made to confirm if semi-government entities are considered for government tender ban by 2024.
The requirement for MNC to establish a branch or subsidiary to function as an RHQ is
Yes, only if the definition of an MNC applied.
Yes.
Yes.
No, only companies that have branches in MENA and have a regional headquarters
Yes.
The period of Saudization exemption is 10 years.
No.
An existing company in Saudi Arabia, with an existing MISA license cannot act as the parent of the RHQ.
There are 3 RHQ licensing schemes with different incentives, which are still under development.
An existing company in Saudi cannot obtain additional license, because if an RHQ is established, it means that this is the main company (e.g. a holding company) that would manage the remaining ones in Saudi Arabia and in the region.
It normally takes up to 2 or 3 days.
No. The RHQ itself is not required to have direct subsidiaries or branches. The RHQ is expected to cover administratively at least 2 branches/subsidiaries of the MNC in the region (other than Saudi Arabia).
RHQs need to have all the required registrations like any other entity that is operating in Saudi Arabia. After obtaining the RHQ license from MISA, all other registrations are done through MOC.
No. The RHQ requires a separate registration from the operating entity. However, this may be discussed at a later stage and we may discuss it on a case-by-case basis.
Grace period will be six months from obtaining the license to establish the mandatory activities, and one year for employment of 15 full-time employees and establishing the minimum of 3 optional activities.
The online application is expected to go live by end of February/early March 2022. The service manual will be updated to include the RHQ License requirements and details; expected before the end of Q1-2022.
10,000 SR
Once MISA license granted, the interested party should proceed immediately with the next step of the registration process, i.e., registering the RHQ with the MOC, similarly to any other entity registration in Saudi Arabia, and subject to the existing Commercial Companies’ law applicable to all companies operating in Saudi.
Part 2 is related to the MNC entity, which can be the foreign parent or foreign entity of the RHQ, if not, provide both entity’s information
Yes. Part 3 is related to the information of the RHQ you are intending to establish/relocate. The first table in part 3 is for the relocation of an existing RHQ, and the second table is for the information of the proposed RHQ.
NO
No. It is expected that RHQ will only manage and support those entities from Saudi Arabia.
No. As of now, the RHQ can be any location.
At this stage, no. This is MISA’s initial feedback, and anything may be subject to change going forward.
Yes. KAFD might be of preference for some MNCs like financial services due to the infrastructure provided and proximity of business.
It will be soon. Once the regulations are issued for KAFD as an SEZ, and if the RHQ wants to relocate to KAFD, it will be required to obtain an SEZ license.
The MHRSD.
Yes. The visa issued will fall under RHQ staff and it’s staffing plan and MISA will assist in that matter.
Employees of the RHQ entity should reside in the Kingdom. There are no restrictions regarding maintaining residency status in other countries.
Yes
Yes. Senior employees could work under the RHQ and apply for the new entity (RHQ) under the RHQ license.
Yes, but it is not recommended.
n/a
No. This is generally not possible under Saudi Labor law and regulations.
Yes.
The RHQ will have to have at least 15 executive level employees that need to be appointed by the end of the first financial year of the RHQ, these executives need to have residency (iqamas) in KSA.
Yes.
Yes. The relocating RHQ must follow Saudi taxation laws, in addition to the corporate tax rate which depends on corporate income.
Requirements of the Zakat, Tax and Customs Authority are applied
Requirements of the Zakat, Tax and Customs Authority are applied
No.
RHQ licensed subsidiary will benefit from 0% tax at SEZ only.
Requirements of the Zakat, Tax and Customs Authority are applied
Requirements of the Zakat, Tax and Customs Authority are applied
Requirements of the Zakat, Tax and Customs Authority are applied
Until now, there is no tax incentives for RHQ.
The RHQ can have its own subsidiaries with different activities. The RHQ legal form should state that it allows establishment of subsidiaries (e.g. an LLC can have subsidiaries, a branch of a foreign company cannot).
No, but there is detailed information for the sitting up the regional headquarters MISA’s service manual.
No. That would not be possible under the RHQ program. The options available for the legal form are either
RHQ is not intended to conduct any commercial activities or generating revenues.
A list of names of companies that do not have a regional headquarters in the Kingdom, which is prepared by the Ministry of Investment (in coordination with the Ministry of Finance and the General Authority for Foreign Trade) based on criteria they agree on. The list is updated periodically or whenever the needs arises, and the list is published on Etimad portal.
Related party: is any agent, distributor, supplier or provider of goods and services for companies that do not have a regional headquarters in the Kingdom (in relation to those goods and services)
Emergency: A situation in which there is a threat to public safety, public security, or public health that is serious and unexpected, or in which there is a breach that warns of loss of life or propert
The committee is for the exemption from Government sectors contracing regulations with companies that do not have a regional headquarters in the Kingdom and related parties. It is a committee linjed to the Ministry of Finance and has a membership in several government sectors thst are competent to consider the requests of government agencies to exclude companies that do not have a regional headquarters in the Kingdom and related parties from the regulations.
The regulations aim is to control contracting with companies that do not have a regional headquarters in the Kingdom or with any related party.
– Whose estimated cost does not exceed 1 million Saudi Riyals
– Implemented outside the Kingdom
Regulations are applied to gevernment agencies ( ministries, governmental bodies, authorities, public institutions, and independent bodie with public legal personality) when carrying out their work and securing procurement
These regulations do not prevent companies that do not have regional headquarters in the Kingdom or related parties from submitting bids for any public competition.
The acceptence of the offer submitted for public competition that has been issued by the government entity depends on one of the two cases:
1- The absence of more than one technically acceptable offer.
2- The offer submitted by the company, which does not have a regional headquarter in the Kingdom or the related party, fulfillsthe following two conditions:
a. The company has the best offer after conduction an overall evaluation from a technical point of view
b. It is less financially by 25% or more than the value of the second offer
The government entity may invite companies – which do not have a regional headquarter in the Kingdom or any related party – to participate in the limited competitions offered in one of the following two cases:
1- The absence of more than one qualified competitor other than companies that do not have a regional headquarters in the Kingdom or related parties
2- The existence of an emergency that can only be dealt with by inviting companies that do not have a regional headquarters in Kingdom or related parties
The government entity are not allowed to issue an invitation in the event that there is more than one technically qualified competitor other than these companies or related parties
The entity submit to the exemption committee a request to exempt a that does not have a regional headquarters in the Kingdom or for a related party for a project or a specific period of time ( not more than three years), as long as the submission application is before the tender or the start of the direct contracting procedures with providing the committee with documents and justifications
The regional headquarters allows the company with commercial activity to sign with government agencies and participate in competitions, and the signing is not done directly with the RHQ
Yes, it is possible, and it does not have to be directly affiliated with the parent company.
Yes, it is possible, and the entity cannot accept any offer unless the following cases are met:
1. The absence of more than one technically acceptable proposal
2. That the offer submitted by the company that does not have a regional headquarters is the best offer after the overall evaluation from a technical point of view, and it is financially less than 25% or more than the value of the second best offer.
This can happen in two cases
1. The absence of more than one qualified competitor other than companies that do not have a regional headquarters to carry out business or secure purchases
2. The existence of an emergency situation that can only be dealt with by inviting the company that does not have a regional headquarters.