Companies flock to Riyadh as Saudi economy diversifies

RIYADH: In a major stride toward global business prominence, Saudi Arabia is fast emerging as a powerhouse through its regional headquarters program. 

Spearheaded by a collaborative effort between the Ministry of Investment and the Royal Commission for Riyadh City, the initiative offers foreign companies establishing their Middle East bases in the Kingdom a 30-year exemption from corporate income tax, as announced in December 2023. 

These efforts have led to more than 180 foreign firms securing licenses to establish their headquarters in the Kingdom, surpassing the original target of attracting 160 international firms by the end of 2023, as revealed by Saudi Investment Minister Khalid Al-Falih, in a November interview. 

Speaking to Bloomberg, Al-Falih emphasized that the regional headquarters program is a long-term endeavor. Saudi Arabia is actively collaborating with international entities to cultivate the “right ecosystem” for them to establish their offices in the Kingdom.  

Despite the current challenges in Europe and the Middle East, he expressed confidence that people will recognize Saudi Arabia as the premier destination for investment.  

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More than 180 foreign firms secured licenses to establish their headquarters in the Kingdom.

The numbers surpassed the original target of attracting 160 international firms by the end of 2023.

The initiative offers foreign companies establishing their bases in the Kingdom a 30-year exemption from corporate income tax.

He noted that this transition is already underway and believes that Saudi Arabia will maintain its status as a highly attractive investment destination. 

Saudi Arabia’s economy, long reliant on crude oil, has undergone a remarkable transformation since the launch of Vision 2030.  

Spearheaded by Crown Prince Mohammed bin Salman, the country is systematically strengthening its non-oil private sector. Bolstered by business-friendly reforms, the capital city, Riyadh, is progressively establishing itself as a major global business hub. 

This has attracted leading global players to move their headquarters to Riyadh — from German consultancy firm TUV Rheinland and Norwegian group Technal to global real estate firm JLL and IHG Hotels & Resorts. 

Here’s a roundup of some notable firms that opened their regional headquarters in Saudi Arabia in 2023:  

TUV Rheinland 

In November 2023, the German consultancy firm TUV Rheinland inaugurated its regional headquarters in Riyadh.  

Following the launch, Michael Fubi, CEO, and chairman of the executive board at TUV Rheinland Group, expressed the company’s unwavering commitment to Saudi Arabia. He added that the new office would facilitate the firm’s growth and expansion in the region. 

“TUV Rheinland Arabia’s mission and guiding principles are to achieve sustained development of safety and quality to meet the challenges arising from the interaction between man, technology, and the environment,” said Fübi. 

Tarjama 

In the same month, Tarjama, a leading smart language services provider in the Middle East and North Africa region, opened its headquarters in Riyadh as part of Saudi Arabia’s ongoing transformation from an oil-dependent economy to a diversified global business hub.  

The company said the relocation of top executives to Saudi Arabia reflects Tarjama’s commitment to catalyzing growth and strengthening the local business landscape.  

“As we witness Saudi Arabia’s emergence as a thriving hub for international enterprises, we are delighted to introduce our proprietary suite of innovative language solutions, meticulously crafted for the Arabic language, to the Saudi market,” said Nour Al-Hassan, founder and CEO of Tarjama.   

JLL 

In October, global real estate firm JLL solidified its commitment to Saudi Arabia’s property market by opening its regional headquarters at the King Abdullah Financial District in Riyadh.  

JLL said it sees the Kingdom as a crucial player in its long-term and continued growth in the region.  

Christian Ulbrich, JLL’s president and global CEO, expressed the company’s goal to elevate the standards of real estate services in the Kingdom and beyond through close collaboration with stakeholders.   

IHG Hotels & Resorts 

In a significant move reflecting Saudi Arabia’s growing influence in the travel and tourism sector, hospitality giant IHG Hotels & Resorts established its regional headquarters in Riyadh in October. 

IHG not only opened its regional headquarters but also revealed plans for substantial expansion in the Kingdom, with 50 percent of its Middle East development focused on Saudi Arabia. The company emphasized alignment with Saudi Arabia’s Saudization goals, with a commitment to increasing the number of Saudi nationals in its workforce from 1,700 to 6,000 by the end of the decade.  

GE Healthcare 

During the Global Health Exhibition in October, US-based GE Healthcare announced the establishment of its regional headquarters in Riyadh. This move followed the recent launch of GE Healthcare’s online service shop in the region.  

The new headquarters is strategically positioned to address the evolving healthcare demands in Saudi Arabia and the broader region.  

Bechtel 

In September, the US-based engineering, procurement, construction, and project management company Bechtel opened its regional headquarters in Saudi Arabia.  

With a history of activity in the Kingdom dating back to 1945, Bechtel is actively involved in several key projects, including Jubail, Ma’aden, NEOM, Trojena, the Riyadh Metro Project, and the New Murabba.  

The newly established headquarters in Riyadh is designed to support Bechtel’s expanding team, enabling the successful delivery of these iconic projects, as stated in the company’s press release. 

Technal 

In July, Technal, a brand of Norsk Hydro, the Norwegian group specializing in aluminum extrusions, inaugurated its regional headquarters in Saudi Arabia. 

Following the opening, the company expressed its commitment to offering low-carbon technologies for the construction sector in the Kingdom.  

Operating in Saudi Arabia for over 44 years, Technal has been providing low carbon footprint aluminum, energy-efficient, and high-performance solutions for windows, doors, and facades.  

With the establishment of the new headquarters, Technal aims to further serve its Saudi-based customers, including architects, consultants, contractors, and developers.  

As Saudi Arabia continues to offer incentives and benefits to international companies relocating their regional headquarters, the coming months may witness more firms entering the Kingdom to establish a base.

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