Saudi Arabia's Regional HQ Requirement Goes into Effect
The RHQ Program was introduced in February 2021 to attract global corporations to establish their headquarters in Saudi Arabia.
The deadline for international firms to establish regional headquarters (RHQ) in Saudi Arabia or risk losing hundreds of billions of dollars in government contracts came into force on Monday, 1 January.[1]
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The RHQ Program was introduced in February 2021 to attract global corporations to establish their headquarters in Saudi Arabia and position the kingdom as the premier commercial, industrial, and investment hub for the MENA region.[2]
In November, Saudi Investment Minister Khalid Al-Falih said that 180 companies had agreed to establish their regional headquarters in Riyadh. Last week, the Saudi cabinet declared that contracting procedures had been approved; however, specifics were not disclosed at the time.
The Saudi government has said that it will only accept bids from companies without regional headquarters if they are technically superior and 25% less expensive than the next best offer, or if no other bids are received. Otherwise, companies are welcome to participate in government tenders.
Exceptions to the rule include awards for contracts under $266,681, contracts carried out outside the kingdom, agreements with businesses that are the only ones offering their service or goods, and crises that can only be handled by a foreign business without a regional office.