Riyadh is seeing a surge in business activity from international companies setting up regional headquarters (RHQs) in the Saudi capital under the Kingdom’s push to become a regional commercial hub.
This comes in the wake of the Kingdom’s announcement in February that from 1 January 2024, government and state-backed institutions would stop signing contracts with foreign companies that base their Middle East headquarters in any other country in the region.
RHQs are defined as a unit of a multinational group that is duly established under the laws of Saudi Arabia for the purpose of supporting, managing, and providing strategic direction to its branches, subsidiaries and affiliates operating in the MENA region.
By the start of November, a total of 44 multinationals have been licensed to move their RHQs to Riyadh, operating across diverse sectors including technology, consulting and construction, and food and beverages.
“From our perspective, foreign direct investment is pouring into Saudi Arabia. The RHQ announcement has got people talking. The amount of interest that has been building around Riyadh has been significant,” said Nicholas Cully, Sovereign Group Sales Director. “As the regulatory environment changes, foreign businesses are registering here in numbers we’ve never seen before,” he added.
Riyadh is undergoing a rapid transformation as the Saudi government looks to double the city’s population and increase its economic footprint threefold by 2030. Four mega projects in the city are in progress which are designed to substantially advance the city’s quality-of-life rankings globally.
King Salman Park will stretch over a 13.4km2 area on the site of the old airport, which will include gardens, an 800,000-square-metre ‘wadi’, an arts section, including a 2,500-seat national theatre and an 8,000-seat open air theatre as well as cinemas, art academies, museums, sports facilities and open public spaces. It will also boast 12,000 residential units, 16 hotels with 2,300 rooms, a food and retail area stretching and libraries.
This will be supported by the ‘Green Riyadh’ project, which involves planting 7.5 million trees across the capital; the ‘Riyadh Art’ project, which involves the installation of more than 1,000 artworks and landmarks across the city; and the ‘Riyadh Sports Boulevard’, which will extend for 135km across Riyadh, connecting Wadi Hanifah in the west with Wadi Al Sulai in the east.
In addition, the King Abdulaziz Public Transport project, which includes the bus transport project and the Riyadh Metro, will transform Riyadh by connecting most of the densely populated areas, public facilities as well as governmental, educational, commercial and medical institutions in the city.
Further projects are underway on the outskirts of Riyadh, including: the ‘Qiddiya’ project to create the Kingdom’s ‘capital of entertainment’ over a 334 km2 area from a 20,000-seat cliff-top stadium to a Formula One-standard racetrack; the ‘Ad Diriyah’ tourism project, which will incorporate the UNESCO-listed site of At-Turaif; and the ‘Al Widyan’ project – dubbed as Riyadh’s ‘city within a city’ – which will become create a mixed-use city and leisure destination in Riyadh’s northern growth corridor.
“The RHQ companies are intended to bring new expertise, research and development as well as innovation in a wide range of sectors, resulting in knowledge transfer in the medium to long term, and improvement in the local talent pool,” said Cully. “The transformation of Riyadh will create an attractive city for multinational companies, their employees and their families to relocate.”