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International Companies have less than 2 years to set up Regional Headquarters in Saudi Arabia.

 

As one of the leading law firms in Saudi Arabia, we have been advising several companies from around the world and representing them in Saudi Arabia in various capacities. Until now, there was no mandatory requirement to have a local presence in Saudi Arabia to enter into contract with businesses and enterprises based in Saudi Arabia. However, effective January 1st 2024, that will change. International companies now have less than two years to register and set up their regional headquarters in Saudi Arabia under the new law.

His Excellency, Engineer Khaled Al-Falih, Saudi Arabia’s Minister of Investment, said the move should not come as a surprise since it is a continuation of the kingdom’s policy, which is based on Saudi Arabia’s 2030 goal for attracting international investment. Riyadh’s strategy is a plan announced by Crown Prince Mohammed bin Salman in January of last year, with one of its goals being to relocate multinational commercial businesses’ regional headquarters to Riyadh.

In keeping with this effort, the Kingdom has declared that any foreign trade business that does not have a regional headquarters in the kingdom would have their contract terminated by 2024.

Key Points to Keep in Mind

The law will come into effect on January 1, 2024 and will limit government contracts for certain enterprises.

  • To be considered for future contracts and extension of existing ones, international enterprises must have a regional headquarters in Saudi Arabia.

 

  • If a foreign company does not establish a regional headquarters in Saudi Arabia, it will be unable to contract with government organizations, agencies, or funds.

 

  • “Regional headquarters” is defined by the Saudi Minister of Investment as having all executive staff operations and supporting activities in Saudi Arabia.

 

  • With previous government approval, headquarters must be situated in Riyadh, Dammam, or Jeddah.

 

  • More information on the new law’s exemptions will be released soon.

 

What it means for companies wanting to do business in Saudi Arabia.

Only multinational corporations with no physical presence in Saudi Arabia are subject to the new Saudi legislation. Companies who currently have a presence in Saudi Arabia or want to do so are not barred from bidding on government contracts or doing business with the private sector. Companies who might be entering Saudi Arabia or bidding on Saudi Project might want to keep this new law in mind and set up their presence sooner than later.

As a leading law firm in Saudi Arabia , we have been receiving queries on how to set up a branch, subsidiary or a company in Saudi Arabia. We detail the process here, however please note, this is not legal advice and only provided for informational purpose. If you would like to learn more or want to set up a company, you are advised to contact our corporate law practice group.

  • Apply for an investment license from the Ministry of Investment (MISA).
  • Establishment, paperwork, and publication contract preparation (for new subsidiaries and companies).
  • Submit your application to the Ministry of Commerce(MOC) for a Commercial Register Certificate (CR).
  • Bank account opening.
  • Making a capital deposit and receiving a bank certificate.
  • Become a member of the Chamber of Commerce.
  • Renting a firm headquarters that complies with civil defense legal criteria.
  • Issuing the certificate of civil defense
  • Obtain a local municipal license.
  • Inform the Ministry of Labor and open a file.
  • Entry into the General Social Insurance Corporation’s database.
  • General Authority for Zakat Registration.
  • VAT Registration.
  • Register for a national address with Saudi Pos
  • Use the Quua platform for labor office services to open a file.
  • Sign up for the modad platform to keep track of and record employment contract Granting the Director General a work visa.
  • Involvement and activation of a resident service for passport services and the Ministry of the Interior for foreign residents.

We would be happy to provide you with additional details on advise you on the setting up a business in Saudi Arabia. Feel free to reach out to us or contact us by email on info@hejailanlaw.com