Saudi Arabia Offers 30-Year Tax Exemption to Attract Foreign Companies
Saudi Arabia has introduced a 30-year tax exemption package for foreign companies establishing their regional headquarters in the kingdom. The move is part of the country’s aggressive campaign to attract international investment and become the leading commercial, industrial, and investment hub in the MENA region.
The tax incentive includes a 0% corporate tax rate for 30 years, starting from the day companies obtain their regional headquarters license. The program aims to position Saudi Arabia as an attractive destination for multinational companies, offering a range of benefits and premium support services that complement the kingdom’s globally competitive value proposition.
A Controversial Ultimatum
In February 2021, Saudi Arabia made headlines when it announced an ultimatum that foreign companies must have their regional headquarters in the kingdom by the start of 2024 to continue doing business with state entities. This move was seen as a challenge to Dubai, the commercial capital of the United Arab Emirates. Saudi ministers have reiterated that the ultimatum still holds firm, with companies needing to establish their regional headquarters in Saudi Arabia by January 1, 2024, to be eligible for lucrative government contracts.
Despite the incentives, some foreign investors remain skeptical about Saudi Arabia’s ability to attract foreign talent due to its conservative reputation and human rights record. Expats in Dubai, which is home to the highest concentration of Middle East regional headquarters, question the kingdom’s ability to provide quality-of-life services such as international schools and a Western lifestyle. However, Saudi Arabia has taken steps to address these concerns, with the announcement of seven international K-12 schools opening in the country.
The tax exemption, combined with other benefits such as relaxed Saudization requirements and work permits for spouses of regional headquarters executives, gives multinational companies another reason to choose Saudi Arabia as their hub. This initiative is part of Vision 2030, a campaign launched by Crown Prince Mohammed bin Salman to create private sector jobs and diversify the economy away from oil.