Breaking: Saudi to Offer a 30-Year Tax Break for Global Companies

  • Publish date: Wednesday، 06 December 2023
Breaking: Saudi to Offer a 30-Year Tax Break for Global Companies

Saudi Arabia is introducing a 30-year tax exemption to attract global companies to relocate their regional headquarters to the kingdom.

This move is part of Saudi Arabia's broader push for diversification and aims to boost foreign direct investment as outlined in its Vision 2030 agenda to move away from oil dependency.

The tax incentive package includes a zero percent rate for both corporate income tax and withholding tax related to approved regional headquarters activities, providing an attractive proposition for multinational corporations (MNCs) considering a move to Saudi Arabia.

The tax relief will apply from the day companies obtain their regional headquarters license, offering a significant competitive advantage.

The kingdom, which currently imposes a 20 percent corporate tax, is keen on luring more global companies, and this initiative complements the rules introduced in 2021 mandating foreign companies to establish regional headquarters in Saudi Arabia by the end of 2023 or risk losing government contracts.

Saudi Arabia is positioning itself as a strategic business hub, offering not only tax incentives but also a range of benefits and premium support services through its regional headquarters program. The initiative, managed by the Ministry of Investment and the Royal Commission for Riyadh City, has already licensed over 200 companies since its launch in 2021.

Mohammed Al Jadaan, Minister of Finance, highlighted that this new incentive provides businesses with visibility and certainty for future planning, encouraging MNCs to expand their presence in the region through Saudi Arabia.

The tax break complements other advantages, such as relaxed Saudisation requirements and work permits for the spouses of regional headquarters executives, making the kingdom an even more attractive destination for companies and professionals.

As Saudi Arabia aims for 480 global companies to establish headquarters in the kingdom by 2030, it emphasizes its commitment to economic diversification and transformation.

The tax concession aligns with the country's long-term economic stability, skilled workforce, strategic location, and strong growth prospects. Saudi Arabia's economy, which experienced an 8.7 percent growth in the previous year, is projected to grow at 0.8 percent in the current year, with non-oil economic growth expected to remain close to 5 percent. Business activity in the non-oil private sector also remains robust, indicating a favorable environment for companies considering relocation.

This initiative reinforces Saudi Arabia's ambition to position itself as a global business destination and marks a pivotal step toward achieving its economic goals outlined in Vision 2030.

Follow us on our Whatsapp channel for latest news