IBX-Jakarta. Saudi Arabia has announced its intention to offer tax benefits to foreign firms that establish their regional headquarters in the country, featuring a 30-year exemption from corporate income tax. This initiative, part of Crown Prince Mohammed bin Salman’s strategy to diversify the economy away from oil and create employment opportunities for Saudi nationals, intensifies the competition between Saudi Arabia and the United Arab Emirates as a regional business hub.
The tax relief package for these headquarters encompasses a complete waiver of income tax and withholding tax on approved activities for the regional entity for three decades. The exemption program becomes effective upon the issuance of licenses for international companies, attracting around 200 foreign companies thus far, as per Saudi Investment Minister Khaled Al-Falih.
Saudi Finance Minister Mohammed Al-Jadaan emphasized that these new tax exemptions would provide international companies operating within the kingdom with a clearer vision and greater stability. Additionally, he expressed eagerness to welcome more international firms to participate in various sectors and upcoming significant events like the Asian Winter Games in 2029 and Expo 2030.
In response to the October deadline set by Saudi Arabia, foreign companies have hurried to comply with the requirement to relocate their regional headquarters, although some have voiced concerns regarding the regulatory environment and taxation. For years, these firms have utilized the United Arab Emirates as a launchpad for their regional operations, including those in Saudi Arabia.
Source: Saudi Arabia offers tax breaks for companies moving regional HQs to Riyadh (msn.com)