Saudi RHQ Rules Eased for Foreign Firms in 2026

Foreign multinational companies wishing to win most Saudi government contracts have been required, since 1 January 2024, to establish a regional headquarters (RHQ) inside Saudi Arabia. A recent clarification in 2026 has eased that rule, allowing some companies without an RHQ to be contracted through a formal exemption framework when specific conditions are met.

Under the current rules, a government entity may still contract with a company that has no Saudi RHQ if the estimated contract value is below SAR 1 million, or if the work or purchases take place outside Saudi Arabia. A non-RHQ offer may also be accepted when it is the only technically compliant bid, or when it is technically the best and at least 25% lower than the next-best offer.

To use these exceptions, the government entity must obtain a formal exemption approval before launching the tender, submitted through the Etimad government procurement platform.

Setting up a regional headquarters

The RHQ program applies to multinational companies present in at least two countries outside Saudi Arabia and outside the company's headquarters country, in addition to having a global headquarters and MENA operations. A company must first obtain an RHQ licence from the Ministry of Investment, then register the RHQ in Saudi Arabia as either a branch or a limited liability company.

Companies that establish an RHQ gain notable incentives, including 0% corporate income tax and 0% withholding tax for 30 years from the date the licence is issued, unlimited visas for RHQ employees, and a 10-year exemption from Saudization requirements.

For the community and the wider business sector, the framework signals continued efforts to attract regional operations to the Kingdom while keeping procurement flexible for essential, low-value or cross-border needs.

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