Now accepting applications for Fast Company Middle East’s Best Workplaces For Women 2023. Click here to register.

Saudi Arabia has escalated the competition with the regional business hubs to wean the economy off oil by creating new industries that would generate jobs. For years, Foreign firms have used the neighboring UAE as a springboard for their regional operations, including for Saudi Arabia.

In 2021, the country announced it would stop awarding government contracts to companies whose regional headquarters are not in the kingdom by January 1, 2024.

Saudi Arabia said on Tuesday it would offer tax incentives for foreign companies that locate their regional headquarters in the kingdom, including a 30-year exemption for corporate income tax.

The tax exemption package for regional headquarters includes a zero percent rate for the income tax of the regional entity and for the withholding tax on approved activities of those entities for 30 years, state news agency SPA reported.

Minister of Investment Khalid Al-Falih noted that these tax incentives help push the kingdom’s larger goal of becoming the central hub for regional HQs. 

He added that the companies will benefit from features such as flexibility in Saudization requirements, allowing for the attraction of talent from different backgrounds to work at the regional HQs. 

Additionally, Al-Falih said that the country’s strategic location and strong growth prospects have already attracted more than 200 companies to the program.

Mohammed Al-Jadaan, Minister of Finance in Saudi Arabia, said, “We look forward to welcoming more international companies to participate in projects taking place in all sectors, including mega projects, at a time of progressing our preparations to host major events such as the Asian Winter Games in 2029 and the World Expo in 2030.”