Saudi Arabia said Tuesday it would offer 30 years of tax relief for foreign companies that locate their regional headquarters in the Gulf kingdom.
The tax relief provides a zero-percent corporate income tax and withholding tax for 30 years, said a Saudi Press Agency (SPA) report.
“This new incentive gives (the) business more visibility and certainty for future planning as (multinational corporations) expand their presence in the region through Saudi Arabia while also taking part in our own transformation journey,” Finance Minister Mohammed Al-Jadaan said.
The announcement comes less than a month ahead of a January 1 deadline for multinationals to open regional headquarters in Saudi Arabia or lose out on government contracts.
Foreign companies will benefit from the tax exemption package starting from the date their licenses are issued, it added.
The incentive program has so far lured 200 foreign companies,Saudi Investment Minister Khaled Al-Falih said.
What to look for
“We look forward to welcoming more international companies to participate in projects in all sectors, including mega projects, and our preparations to host major events such as the Asian Winter Games in 2029, and the Expo 2030,” Jadaan noted.
Saudi Arabia’s non-oil business activity remained high in November despite price pressures hit their highest levels in nearly one-and-a-half years.
The the seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers’ Index has shown positive signs of expansion, driven by strong sales, increased orders, and effective marketing strategies. However, the country’s exports, particularly in the petrochemical sectors, have remained relatively low in November compared to the same period a year ago.
In the third quarter, Saudi Arabia’s real gross domestic product (GDP) contracted by 4.5%, dampened by a plunge in oil activities. This came despite non-oil growth of 3.6% and expansion in government activities of 1.9%.
The Saudi economy crossed the $1 trillion (SAR 3.75 trillion) mark for the first time in 2022.