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Saudi Arabia Introduces Tax Incentives to Attract Foreign Corporate

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Saudi Arabia unveils tax incentives, including a 30-year corporate income tax exemption, to entice foreign companies to establish their provincial headquarters in the kingdom. 

The move aligns with Crown Prince Mohammed bin Salman’s broader economic diversification plans to steer the nation’s economy from oil dependency.

Economic Diversification Drive:

The initiative, announced by the Ministry of Investment and the Royal Commission for Riyadh City, seeks to foster new industries within Saudi Arabia, facilitating job creation for its citizens and promoting economic diversification.

Attracting International Companies:

The program, a collaboration between government entities, aims to position Saudi Arabia as the premier choice for international companies in the Middle East and North Africa region. 

By offering a suite of benefits and support services, the initiative targets the establishment of regional headquarters within the kingdom.

The tax exemption package grants a 30-year zero percent income tax rate for regional entities and withholding tax on approved activities. These incentives become effective from the issuance date of the companies’ licenses.

Positive Reception and Future Prospects:

Saudi Investment Minister Khaled Al-Falih revealed that the initiative has attracted 200 foreign companies. 

Saudi Finance Minister Mohammed Al-Jadaan expressed optimism, citing the benefits of tax exemptions in providing clarity and stability for international companies operating in Saudi Arabia.

Following the kingdom’s announcement to cease awarding government contracts to firms without regional headquarters in Saudi Arabia by January 1, 2024, foreign companies are actively meeting this condition, emphasizing the significance of relocating their regional bases to the kingdom.

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