Navigating Transfer Pricing for Regional Headquarters in The Kingdom of Saudi Arabia

An In-Depth Analysis

The Kingdom of Saudi Arabia (KSA) has recently implemented the Regional Headquarters (RHQ) program as part of its efforts to attract multinational enterprises (MNEs) and bolster business operations within the region. However, the introduction of this initiative brings about a host of complexities, particularly concerning transfer pricing (TP) implications. RHQs must navigate these challenges to ensure compliance with evolving regulations and optimize their operational efficiency.

In response to these developments, we have developed an in-depth article tailored to address the specific transfer pricing intricacies faced by RHQs in KSA. Our article provides actionable insights and practical solutions to empower MNEs to effectively manage their transfer pricing strategies within this environment, ensuring both regulatory compliance and strategic positioning within the global enterprise landscape. 

Key aspects covered in the article include: 

  • Essential transfer pricing considerations, such as business restructuring, cost allocation, and subcontracting. 
  • Best practices for determining appropriate remuneration mechanisms.
  • The significance of benchmarking studies and robust documentation.
  • The importance of adhering to TP principles and regulatory standards.
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