Riyadh - Sharikat Mubasher: Saudi Arabia’s Regional Headquarters (HRQ) Program entered into force on 1 January with several exceptions to the rules, including contracts below SAR 1 million.

The exceptions include contracts executed outside of the kingdom, deals with firms that are the sole providers of their service or commodity, and emergencies that can only be addressed by a foreign firm without regional headquarters, as reported by the Um Al-Qurra newspaper.

According to the program, having a regional headquarters in the Kingdom is a prerequisite requirement for foreign firms to start or expand their businesses in Saudi Arabia.

Firms without regional headquarters can still compete for government tenders, but government agencies will only be able to approve them if they are technically superior and 25% cheaper than the next best offer, or if there are no competing offers.

Last week, the Saudi Cabinet endorsed contracting regulations for firms that do not have RHQ in the Kingdom, however, it did not specify how many contracts below SAR 1 million a foreign firm could sign with the same government agency.

Moreover, the Saudi Ministry of Investment recently added a 30-year tax relief incentive package to the RHQ Program to streamline the process for multinational firms establishing their RHQ in the Kingdom.