Complete Guide to Saudi Arabia RHQ Requirements
Who the Regional Headquarters rule applies to, what an RHQ license requires, and which exceptions actually exist for Saudi government contracts.
In This Guide
What is an RHQ License?
A Regional Headquarters (RHQ) License is a business license issued by the Ministry of Investment of Saudi Arabia (MISA) that authorizes foreign multinational companies to establish their regional headquarters in the Kingdom of Saudi Arabia.
The RHQ program is a cornerstone of Saudi Arabia's Vision 2030 economic diversification strategy. It aims to position the Kingdom as a regional business hub by encouraging multinational groups to manage their regional operations from Saudi Arabia rather than from elsewhere in the Middle East.
Key Point
Since January 1, 2024, Saudi government entities, authorities, institutions and funds generally may not award contracts above SAR 1 million to foreign multinational groups that do not have an RHQ in the Kingdom, unless an exception applies.
Who Needs an RHQ License?
The rule targets foreign multinational groups that contract with Saudi government buyers. It is not a general vendor-registration requirement.
Likely Affected:
- ✓Foreign groups managing the region from outside Saudi Arabia
- ✓Saudi branches or subsidiaries of such groups
- ✓Contracts above SAR 1M with ministries, authorities and government funds (incl. PIF)
- ✓Reportedly, PIF-owned entities and giga-projects (confirm with the buyer)
Not Affected:
- ○Saudi companies that are not part of a foreign multinational group
- ○Contracts of SAR 1M or less
- ○Purely private-sector work
- ○Contracts covered by one of the exceptions below
Saudi-Registered Company? Read This First
If your company is incorporated in Saudi Arabia and is not owned by a foreign group, you do not need an RHQ to become a government or PIF vendor — and you could not obtain one, because an RHQ must manage affiliates in other countries. What you need is the buyer's supplier registration and prequalification (e.g. Etimad, or the PIF entity's vendor portal).
Important Clarification
Having a branch license is NOT the same as having an RHQ license. A foreign group whose only Saudi presence is a branch or trading subsidiary does not satisfy the RHQ requirement through that entity.
RHQ License Requirements
To obtain and maintain an RHQ license, companies must meet the following requirements:
Physical Presence
- Establish a physical office in Saudi Arabia (typically in Riyadh)
- Office must be a genuine operational facility, not just a registered address
- RHQ operations must start within 6 months of license issuance
Staffing Requirements
- At least 15 full-time employees within the first year after licensing
- At least 3 senior executives performing regional management functions
- RHQs are reported to be exempt from Saudization quotas for 10 years (RHQ function only)
Operational Requirements
- Must be part of a multinational group with affiliates in other countries to manage
- The RHQ itself may not carry out revenue-generating commercial activity
- Strategic management and support functions (HR, finance, legal, IT) for regional affiliates
Exemptions & Exceptions
Exceptions are tied to the contract, not to the company. Based on the published rules as summarized by advisers, a government entity may contract with a non-RHQ foreign group where:
Contract Value of SAR 1M or Less
Contracts at or below SAR 1 million fall outside the rule.
Only One Compliant Offer
Only one technically compliant offer is received in the tender.
Significant Price Advantage
The non-RHQ offer is technically the best and at least 25% cheaper than the next best offer.
Executed Outside the Kingdom
The procurement is executed entirely outside Saudi Arabia.
Etimad Exemption (Requested by the Buyer)
Since late 2025, government entities can request case-specific or time-limited exemptions through the Etimad platform before launching a tender or direct contracting. The request is made by the contracting entity, not by the supplier, and can cover one project, a group of projects, or a defined period.
No "Application Pending" Exemption
There is no exemption a company can file for itself while its RHQ application is in progress, and there is no industry-wide exemption. Verify any exception against the current rules of the Local Content and Government Procurement Authority and the specific tender documents before relying on it.
Benefits of RHQ Compliance
Government Contract Access
Eligibility for Saudi government contracts above SAR 1M without relying on exceptions
Giga-Project Opportunities
Access to PIF-backed giga-projects such as NEOM, Red Sea Global and Qiddiya
Regional Hub Status
Incentive package reported to include tax relief on qualifying RHQ activities and visa facilitation
Long-term Market Access
Established presence for ongoing and future Saudi market opportunities
Next Steps
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