01
RHQ manages the region, the operating company conducts commerce
MISA defines RHQ as a Saudi unit multinational group that supports, manages and sets the strategic direction of branches, subsidiaries and affiliates in MENA. RHQ may be a separate company or registered branch, but must not directly conduct normal revenue-generating commercial operations outside of RHQ's licensed activities.
Strategy, management, coordination and selected shared services.
Sales, services, projects, invoicing and industry licenses.
Group ownership, global policy and ultimate strategic oversight.
Local operations, customers and regulatory obligations.
02
The program is intended for multinational group
The group must have a presence through subsidiaries or branches in at least two countries other than Saudi Arabia and the global headquarters country. The application demonstrates an existing international footprint, consolidated financials and the ability to realistically transfer regional functions.
- Applicant file
- Commercial registration/license of the parent or declaring company
- Regional presence
- At least two foreign jurisdictions outside KSA and home country
- Evidence
- Registration documents of the relevant subsidiaries/branches
- Financials
- Latest audited consolidated financial statements
- Entity
- Separate Saudi legal personality: company or registered branch
03
Mandatory activities plus at least three optional
The mandatory block consists of strategic direction and management functions. Strategic direction includes regional strategy, alignment, regional embedding of products/services, M&A/divestments support and review of financial results. Management covers planning, budgeting, coordination, market opportunities, monitoring and reporting.
- Mandatory 1
- Strategic direction functions
- Mandatory 2
- Management functions
- Optional minimum
- At least three selected functions
- Mandatory start
- Within six months after license
- Optional start
- Within one year after license
Sales/marketing support, research, advisory and market analysis.
HR, personnel management and training services.
Treasury, FX, accounting, audit, compliance and internal control.
Logistics, supply chain, sourcing and production management.
Technical support, engineering, IT network operations and R&D.
Legal support and intellectual-property management.
04
15 employees, including at least three senior executives
During the year, RHQ must have at least 15 full-time employees engaged in RHQ activities. At least three must be at the level of Executive Director / Vice-President and have relevant knowledge formed in the global HQ or another regional HQ group. For tax ESR, qualifications, actual functions and expenses are important, not just payroll.
- Headcount
- Minimum 15 FTE within one year
- Senior
- At least three managers at the appropriate level
- Skills
- Relevant experience and knowledge of the group
- Location
- Actual work of RHQ in the Kingdom
- Evidence
- Contracts, visas, payroll, role profiles, decisions and deliverables
05
Procedure for creating RHQ
- 01Group eligibility
Global HQ, MENA map and at least two qualifying foreign presences.
- 02Function design
Mandatory functions, three optional and operating-company separation.
- 03MISA application
Registrations, audited consolidated financials and RHQ plan.
- 04Saudi entity
Company or branch, CR, office, UBO and bank.
- 05People and systems
Leadership, 15 FTE, payroll, policies, IT and records.
- 06Tax and TP
ZATCA registration, ESR, intercompany agreements and segmented accounts.
06
The separation of functions must work legally and in fact
The RHQ agreement map shows what services the headquarters provides to each MENA entity, who makes decisions, who bears the risk and who receives commercial revenue. Saudi operating company retains its customer contracts, sector licenses, staff and taxes. Dual roles require special care with employment, time allocation, authority and recharge.
If an executive simultaneously sells to clients through an operating company and performs RHQ functions, clear authority, time evidence, contracts and cost allocation are needed. Otherwise, qualifying income and license compliance become vulnerable.
07
0% income tax and WHT - within the qualifying regime
The ZATCA Guideline provides for 0% income tax for income from mandatory and optional RHQ activities and 0% WHT for payments provided for by the rules for a renewable 30-year period calculated from the issuance of the RHQ license. Application requires license compliance, economic substance and the absence of unacceptable commercial activity.
- Income tax
- 0% for qualifying RHQ income
- Withholding tax
- 0% within special RHQ Tax Rules
- Period
- 30 years from the date of RHQ license
- VAT
- Separate qualification of supplies and input tax
- Ineligible income
- Regular Saudi tax regime and separate accounting
RHQ registers, maintains accounts, submits returns and reports, documents ESR and provides information to ZATCA. Violation of the terms may result in normal taxation and penalties.
08
Intercompany charge must correspond to the functions
RHQ services turn out to be related entities, so pricing is based on the arm’s length principle. Functional analysis determines people, assets, risks and benefits for recipients; then the charge model, allocation keys, mark-up and agreements are selected. You cannot transfer residual operating profit to RHQ just for the sake of a 0% rate.
- Service catalogue
- Each mandatory/optional function and recipient
- Benefit test
- Economic value for MENA entity
- Cost pool
- Attributable expenses only, no shareholder activities
- Allocation
- Reasonable key by actual use
- Evidence
- Deliverables, time, decisions, invoices and TP documentation
09
Government contracts require separate procurement analysis
Since 2024, government bodies and related entities have had a policy of limiting contracts with multinational groups without RHQ in the Kingdom, with exceptions provided. Before the tender, the customer, related-party scope, type of purchase, cost, exclusion, bidder entity, RHQ status and local-content requirements are checked.
It may be a condition of admission, but does not replace qualification qualification, technical offer, local content, pricing, guarantees and industry license.
10
Annual RHQ control file
- 01
Group presence and MENA entity map remain relevant.
- 02
Mandatory and at least three optional activities are actually carried out.
- 03
15 FTE and senior leadership confirmed by functions and documents.
- 04
Operating revenue is separate from qualifying RHQ income.
- 05
ESR, accounts, returns and ZATCA reports were submitted on time.
- 06
Intercompany charges correspond to TP file and deliverables.