More than 120 international firms received licences to relocate their regional headquarters to Saudi Arabia during the first quarter of 2024, representing a 477% year-on-year increase – making the kingdom an attractive destination for business.
In its quarterly report, Saudi Arabia’s Ministry of Investment revealed that the 127 permits issued in the first three months of the year. 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 licence.
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 business people to visit Saudi Arabia and explore opportunities.
During the first quarter, the ministry also closed 64 investment deals. Additionally, investment licences issued reached 3,157 in the first quarter, representing a 92.9% increase compared to last year.
According to the report, 864 investment licences 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 licences for vocational, educational, and technical activities, while 263 permits were granted in the information and communication technologies sector. A significant number of investment licences were also issued in other sectors including accommodation and food, wholesale and retail, and real estate.
More than 58,000 services were provided through the department’s electronic platform in the first quarter, marking a rise of 29% 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 programme could accelerate foreign direct investment inflows into the kingdom.
A Ministry spokesperson said: “In Q1 2024, real estate recorded the highest growth in investment licences by 253.3pc year-on-year, followed by vocational, educational and technical activities, and agriculture, forestry and fishing by 141.5pc and 129.4pc respectively.”
