https://arab.news/28jpf
RIYADH: More than 120 international firms received licenses to relocate their regional headquarters to Saudi Arabia during the first quarter of 2024, representing a 477 percent year-on-year increase.
In its quarterly report, Saudi Arabia’s Ministry of Investment revealed that the 127 permits issued in the first three months of the year underscores the Kingdom's attractive and favorable business environment.
The drive to attract regional bases to Saudi Arabia plays into the Vision 2030 initiative to diversify the Kingdom’s economy, and includes new tax incentives for multinational companies who secure a relocation license.
These perks include a 30-year exemption on corporate income tax and withholding tax related to headquarters activities, alongside discounts and support services.
According to the recently approved laws in Saudi Arabia, companies with state contracts must have a regional headquarters in the Kingdom with a minimum of 15 employees.
The Ministry of Investment’s report added that the Kingdom processed 445 applications for investor visit visas during the first quarter of this year, allowing overseas businesspeople to visit Saudi Arabia and explore opportunities.
During the first quarter, the ministry also closed 64 investment deals. Additionally, investment licenses issued reached 3,157 in the first quarter, representing a 92.9 percent increase compared to the preceding year.
According to the report, 864 investment licenses were issued in the construction sector during the first three months of this year, followed by 620 permits in the manufacturing industry.
The ministry issued 396 licenses for vocational, educational, and technical activities, while 263 permits were granted in the information and communication technologies sector.
A significant number of investment licenses were also issued in other sectors including accommodation and food, wholesale and retail, and real estate.
“In Q1 2024, real estate recorded the highest growth in investment licenses by 253.3 percent year-on-year, followed by vocational, educational and technical activities, and agriculture, forestry and fishing by 141.5 percent and 129.4 percent respectively,” said the ministry.
Moreover, more than 58,000 services were provided through the department’s electronic platform in the first quarter, marking a rise of 29 percent over the same period in the previous year.
In May, a report released by S&P Global stated that the opening of free economic zones and the regional headquarters program could accelerate foreign direct investment inflows into the Kingdom.
“Future FDI inflows could offer upside on the back of growing investment opportunities and government efforts to improve regulatory and business conditions. These efforts include the opening of free economic zones and a 30-year tax break for multinational companies opening regional headquarters in the country,” said the credit rating agency.
In February, a report by Saudi Arabia’s Small and Medium Enterprises General Authority highlighted that the Kingdom’s Regional Headquarters Program has played a crucial role in accelerating the economic growth of Riyadh.
In November 2023, Minister of Investment Khalid Al-Falih announced that Saudi Arabia has outperformed its target for attracting regional headquarters, with over 180 companies now established in the Kingdom.