Saudi Arabia's regional headquarters scheme ties its tax break to an office

A company with a Saudi regional headquarters licence pays 0% tax only while it keeps a real office in the Kingdom, and the rules set fines for one that does not. By the end of 2025 more than 700 international companies had signed up, well past the target of 500 set for 2030.

Key figures

Figure	Period	Source
More than 700 RHQ companies	end 2025	RCRC
Target: 500 by 2030	set 2021	RCRC
0% income and withholding tax for 30 years	rules of 4 Feb 2024	ZATCA guideline
Fines: SAR 100,000, then SAR 400,000	rules of 4 Feb 2024	ZATCA guideline
Minimum staff: 15 full-time within one year	read Aug 2026	RHQ programme
KAFD: 19 RHQs, 580,000+ m² of leased offices	2025	Vision 2030 AR 2025

The count grew fast, but nobody keeps a series

The Ministry of Investment issues the licences and publishes no statistic on them. The counts come from other bodies, mentioned in passing: 44 in 2021 in the Vision 2030 report, over 200 by end 2023 in the next one, 571 in 2024, 682 to the third quarter of FY2025 in the Ministry of Finance budget statement, and more than 700 from RCRC, the Royal Commission for Riyadh City, at end 2025.

Bar chart of Saudi RHQ licence counts from 44 in 2021 to more than 700 at end 2025, against a 2030 target of 500

Each publisher counts slightly differently, and the 2023 annual report used the fairest wording: companies "licensed to establish". A licence is a permission to set up. It does not mean anyone has signed a lease yet.

What the tax break asks for

ZATCA, the tax authority, gives the licensed headquarters 0% income tax and 0% withholding tax for thirty years, renewable. The break does not cover VAT, zakat or transfer pricing, and it stops at the headquarters itself, not the group's subsidiaries. An RHQ that buys property pays the real estate transaction tax at 5% like anyone else.

In return the company has to pass yearly substance tests. The one that matters for landlords asks for "a physical office in KSA, which may be either owned or leased", with space "proportional to the activities it carries out". Board meetings must happen in the Kingdom, at least one director must live there, and rent is the first item on ZATCA's list of local spending that counts.

The municipality checks the office before tax even comes up. It wants an outside photo of the building showing the company's sign, plus the lease or title deed.

Missing the test has a price

Diagram of the RHQ penalty sequence: 90 days to fix, SAR 100,000 fine, another 90 days, SAR 400,000 fine, then possible suspension of incentives

A company that fails gets 90 days to fix it. Then comes a SAR 100,000 fine and another 90 days, then SAR 400,000, and after that the incentives can be suspended.

How much space is that?

The only official page that puts a headquarters count next to floor area is the KAFD entry in the 2025 Vision 2030 report. It lists 19 regional headquarters in a district with 580,000+ m² of leased offices. Those 19 are a small slice of the roughly 700 licensed.

We can set a floor. If every licensed company met only the 15-staff minimum and used space at KAFD's density, they would need roughly 217,000 m² of offices (the arithmetic is in the Method note). Most headquarters will employ more than fifteen people, so the real figure is higher.

Bar chart comparing KAFD's 580,000 square metres of leased offices with Omran's minimum estimate of 217,000 square metres needed by RHQ companies

There is also a gap in the rules. The tax break runs thirty years, the licence one to five, and no published source says what happens to the remaining years if a licence lapses.

Outlook

The first fines and lapsed licences, once they show up, will tell Riyadh landlords more about demand than the headline count. Omran tracks the statements and the KAFD evidence on one dated sheet: ask for the RHQ evidence file.

FAQ

How many companies have an RHQ licence in Saudi Arabia? More than 700 by the end of 2025, according to RCRC. The Ministry of Investment, which issues the licences, publishes no count.

Does the RHQ programme require office space? Yes. ZATCA requires a physical office in the Kingdom, owned or leased and in proportion to the activity, and the municipality asks for a lease or deed and a photo of the signage.

What happens if an RHQ fails the substance tests? 90 days to fix it, then a SAR 100,000 fine, then SAR 400,000, then possible suspension of the tax incentives.

How much Riyadh office space do RHQs occupy? There is no official figure. Our lower-bound estimate, from the 15-employee minimum and KAFD's density, is about 217,000 m².

Sources

RCRC, RHQ programme page (count to end 2025, target): link
ZATCA, Guideline for Regional Headquarters in KSA (incentives, substance tests, penalties, RETT), §3.1, §4.1 to §4.6, §6.6: link
ZATCA, Regional Headquarters Tax Rules, Arabic: link
RHQ programme site, MISA and RCRC (headcount, licence term, municipal step): link
MISA, Investment Statistics and Open Data (no RHQ series): link, link
Vision 2030 Annual Report 2025 (44 in 2021, KAFD block): link
Vision 2030 Annual Reports 2023 and 2024 (over 200; 571): link, link
Ministry of Finance, Budget Statement FY2026 (682): link
Method: the 217,000 m² floor multiplies 700 licences by the 15-employee minimum (10,500 jobs) and by KAFD's 580,000 m² over 28,000 employees (about 20.7 m² each). KAFD is a district average, not an RHQ figure.