The final Law Update of 2022 is here, and it’s packed full of articles. The double edition features two focus areas, first is a spotlight on Energy and Resources and second we feature a collection of articles on Transport and Logistics. The developments occurring in these sectors in the MENA region are unprecedented and our lawyers cover vast themes for you.
The Energy and Resources focus features topics such as diversifying energy resources, solar PV, mining in the Middle East, renewable energy and green hydrogen. From a transport perspective, we draw attention to the Bahrain metro project, discuss the challenges and remedies associated with the repossession of an aircraft, and there is advice on what to consider should a party vary the terms of a shipping contract.
This edition navigates you through updates from across jurisdictions such as, Oman, Jordan, Saudi Arabia, Egypt, Iraq, Qatar, and the UAE. Each article is timely and provides insights into legal issues and cases that are affecting these sectors across the region.Read the full edition
The Regional Headquarter (“RHQ”) Programme is a ‘Vision 2030’ initiative jointly developed by the Ministry of Investment Saudi Arabia (“MISA”) and the Royal Commission for Riyadh City (“RCRC”), with the objective of inviting global companies to establish or relocate their regional headquarters in the Kingdom of Saudi Arabia.
It is a major development strategy for the Government of the Kingdom of Saudi Arabia, as it seeks to transform Riyadh into one of the top 10 city economies globally by the year 2030. The Board of the RCRC has confirmed the Government’s proposal to double the current population of Riyadh to between fifteen and twenty million, while increasing the number of visitors to more than forty million by the year 2030.
MISA has now issued the first set of guidelines for companies wishing to participate in the RHQ Programme and the team at Al Tamimi & Company has extensive corporate structuring experience to provide guidance and assistance to foreign companies who propose to establish their RHQ in the Kingdom of Saudi Arabia.
Pursuant to the initial guidelines, MISA defines RHQ as “a unit of a multinational group, duly established under the laws of the Kingdom of Saudi Arabia, for the purpose of supporting, managing, and providing strategic direction to its branches, subsidiaries and affiliates operating in the Middle East North Africa region.”
To be eligible for the RHQ Programme, the investor must have at least two (2) subsidiaries or branches of the multinational group in two (2) different countries other than the Kingdom of Saudi Arabia and its country of incorporation (i.e. its official headquarters).
In addition and amongst other requirements, the RHQ must:
The RHQ must provide and be licensed to carry out:
– strategic direction activities (which includes for example, formulating and monitoring regional strategy); and
– management functions (which includes for example, business planning).
While the practical implication is yet to be confirmed, MISA has indicated that the following types of incentives will apply:
Importantly, the Government of the Kingdom of Saudi Arabia has announced that foreign investors wishing to secure government contracts, must have their RHQ in the Kingdom of Saudi Arabia, in order to be eligible to secure these government contracts – (this is to be in law by 1 January 2024).
How this will be managed or implemented on a practical level is yet to be seen, but we have no doubt that this requirement will materially alter the investment landscape in the Kingdom of Saudi Arabia over the coming years.
Al Tamimi & Company is actively monitoring these significant developments and the team is in regular contact with MISA officials so that we remain at the forefront of these regulatory changes.
Please contact our Saudi based corporate structuring team for any queries and we would be delighted to assist with the regulatory applications to obtain the RHQ Licence.