The frame: three products — status, zero income tax and RHQ
This page covers three products rather than a whole country: Premium Residency as a long-term status that can be bought, the personal tax profile built around zero income tax, and the regional headquarters (RHQ) regime for a corporate move. Sport, real estate and daily life appear as boxed notes with links, in exactly the measure in which they change the decision on those three.
Saudi Arabia is the only G20 member that does not tax an individual's employment income at all. That is not a relief and not a special regime with entry conditions but the design of the Income Tax Law itself (Royal Decree No. M/1 of 15/01/1425H): the persons subject to tax are confined to resident capital companies in respect of non-Saudi partners' shares, non-Saudi natural persons carrying on business in the Kingdom, and non-residents operating through a permanent establishment. An individual's employment income is not in the base at all, so the zero requires no claim, no confirmation and has no expiry date. The price of that zero is collected in two other places: in indirect taxes inside the Kingdom, and in the rules of the country of departure, where temporary non-residence turns a three-year contract in Jeddah into a deferred liability at home.
The key parameters of the three products, in one table.
| Law and regulator | Income Tax Law (Decree No. M/1) and the Premium Residency Law (Decree No. M/106); administered by ZATCA |
|---|---|
| Employment income | 0% — it is not in the tax base at all, and no claim or confirmation is required |
| Corporate layer | 20% on profit, 50–85% on oil and hydrocarbons, zakat at 2.5% |
| Consumption | VAT at 15% since 1 July 2020 |
| Contributions for a foreigner | 2% from the employer, base capped at SAR 45,000 a month, nothing withheld from the employee |
| Residence test | 30 days with a permanent home, or 183 days without one |
| Price of the status | SAR 800,000 once for the permanent track, or SAR 100,000 a year for the fixed-term one |
| Corporate move | RHQ: 0% on qualifying income and 0% withholding for 30 years, subject to substance |
Each line is unpacked below in its own layer — fiscal, residence, status and corporate.
What the Kingdom actually taxes: nothing on salary, 15% on consumption
The absence of income tax does not mean an absence of fiscal load — the load has simply moved. Here is what it consists of.
| Tax | Rate |
|---|---|
| Corporate income tax | 20% on adjusted net profit of a company with foreign ownership |
| Oil and hydrocarbons | 50% to 85% |
| Zakat | 2.5% of the zakat base — broadly, net assets — for Saudi and other GCC participants |
| VAT | 15% since 1 July 2020, three times the Emirati 5% |
| RETT | 5% of the disposal value of real estate |
| Excise | 100% on tobacco and energy drinks, 50% on sweetened beverages |
| Customs duties | up to 25% |
Only one line here is felt daily by a relocating family — VAT; the rest engage through a legal entity or a transaction.
RETT sits under a standalone law approved by Royal Decree No. M/84 of 19/03/1446H (22 September 2024): published on 11 October 2024, in force from 9 April 2025 and administered by ZATCA, which may test the declared price against market value for three years. The point that matters for structuring is that the tax reaches indirect disposals as well — transfers of shares in real-estate-rich companies, not only the direct sale of an asset.
What the Kingdom does not have: net wealth tax, inheritance tax, gift tax, or a recurring property tax as such. The single real-estate exception is the White Land Tax, and it has been rewritten. Royal Decree No. M/244 and Council of Ministers Decision No. 758 were published on 12 May 2025, and the implementing regulations appeared in Umm Al-Qura on 22 August 2025. The former flat rate of 2.5% a year has been replaced by a scale keyed to development priority — 10%, 7.5%, 5%, 2.5% and a nil tier — and the scope now extends to every developable plot inside urban development boundaries of 5,000 sq m or more, including holdings aggregated across a single city. A separate category was introduced for vacant developed property: up to 5% of equivalent rental value a year, with scope to rise to 10%; the law allows a year from publication for its regulations. For a holder of a land bank in Riyadh the figure is no longer 2.5% but up to 10% of assessed value a year.
Payroll contributions for a foreign employee are unusual, and unusually favourable — the difference against a Saudi national reads line by line.
| Employee | From employee | From employer | Total |
|---|---|---|---|
| Non-Saudi | nothing withheld | 2% of basic salary plus housing allowance — occupational hazards insurance | 2% |
| Saudi national | 9.75%: 9% social insurance and 0.75% unemployment insurance | 11.75% | 21.5% |
In both cases the contribution base is capped at SAR 45,000 a month — that is the ceiling on contributions.
Residence: 30 days with a home, or 183 days without one
The Saudi residence test is softer than the Emirati one and stricter at the same time. An individual is a tax resident if either limb is met: a permanent place of residence in the Kingdom plus at least 30 days of presence in the tax year, or presence of at least 183 days in the tax year with no accommodation requirement at all. Part of a day counts as a whole day, except for someone in transit between two points outside the Kingdom.
The logic of this construction is peculiar. Because there is no income tax, resident status creates no domestic liability of its own. It exists for a different purpose — to obtain a tax residence certificate and to claim treaty relief, which is to say, for the conversation with the country of departure. And that is where the first standard mistake appears: the "30 days plus a home" limb confers formal Saudi status on very modest presence, and precisely that makes the status fragile in a dispute with the former tax authority, which will apply centre-of-vital-interests and permanent-home tests. The mechanics of resolving such a conflict are set out in the tie-breaker rules; by way of comparison, the UAE issues a residence certificate to a permit holder after 90 days.
The treaty network is broad, and the treaties cut the domestic withholding rates unevenly.
| Regime | Dividends | Interest | Royalties |
|---|---|---|---|
| Domestic rates | 5% | 5% | 15% |
| United Kingdom | 5–15% | 0% | 5–8% |
| Spain | 0–5% | 5% | 8% |
| Russia | 5% | 5% | 10% |
Services do not fit that grid: per the withholding tax overview the domestic rate on them is 5/15/20% depending on their nature, remitted within the first ten days of the month following payment.
The UK–Saudi convention was signed in 2007 and entered into force on 1 January 2009, taking effect from 1 January 2010 in the Kingdom and, in the UK, from 1 April 2010 for corporation tax and 6 April 2010 for income tax and capital gains tax. The Russia–Saudi agreement is not among those Russia has suspended, but the status of the specific article should be checked against the operative text before a payment is structured.
Premium Residency: two paid products and five categories added in 2024
Premium Residency was created by the Premium Residency Law — Royal Decree No. M/106 of 10/09/1440H (15 May 2019), approved by Council of Ministers Decision No. 521 of 09/09/1440H. Article 3 of the Law splits the status into two forms, permanent and fixed-term, but the actual products and their prices are pushed down to subordinate level: they are approved not by the Council of Ministers but by the Council of Economic and Development Affairs (CEDA) on the proposal of the board of the Premium Residency Centre. The practical consequence is that category parameters move by CEDA decision without any change to the Law, and no consolidated public text of those decisions exists.
The base layer is the two paid products that have existed since launch: an open-ended status for a single payment of SAR 800,000, and an annual status at SAR 100,000 a year (roughly $26,700), both requiring proof of financial solvency. In January 2024 five qualifying categories were added: investor, entrepreneur, real estate owner, special talent and gifted.
The bundle of rights is set by Article 2 of the Law: residence in the Kingdom with the family, ownership of real estate other than in Makkah, Madinah and border areas, employment in the private sector, and exit from and entry to the Kingdom without a visa for the holder and family members. The decisive element is not the tax zero — which any work-visa holder enjoys anyway — but the exit from the kafala system: the holder needs no kafeel, and the legality of the stay is not tied to an employer.
| Track | Entry | Duration | Load-bearing requirement |
|---|---|---|---|
| Permanent | SAR 800,000 one-off | no time limit | proof of financial solvency |
| Fixed-term (annual) | SAR 100,000 a year | 1 year, renewable | proof of financial solvency |
| Investor | from SAR 7m into economic activity in the Kingdom | permanent immediately | creation of at least 10 jobs |
| Entrepreneur, first tier | from SAR 400,000, holding of 20% or more in the venture | 5 years, one renewal | 30 months of presence in any 5-year period as the condition of that renewal; the tier does not convert to permanent |
| Entrepreneur, second tier | from SAR 15m, holding of 10% or more in the venture | permanent immediately | job creation in the first and second years of the venture |
| Real estate owner | unencumbered property from SAR 4m | for as long as ownership is held | property in a permitted zone, outside Makkah and Madinah |
| Special talent | no contribution | 5 years, one renewal; permanent thereafter | employment contract in the SAR 14,000–80,000 a month salary band plus approval by the relevant authority; for permanent status, 30 months of presence in any 5 years |
| Gifted | no contribution | 5 years, one renewal; permanent thereafter | recommendation of the relevant ministry for sport, culture or science; for permanent status, 30 months of presence in any 5 years plus a fresh recommendation |
The qualifying categories carry no fee: entry turns on an investment threshold, a property value, a salary band or a ministry recommendation. One caveat on the figures: the CEDA decisions that set these thresholds have not been officially published, and the values above are reconstructed from adviser briefings that tracked the January 2024 launch; on the date of filing they are checked with the Premium Residency Centre. The gifted track is the direct channel for a player or coach with no contribution at all; the comparison with other sporting routes is in athlete visas, and the comparison with investment residence permits in the golden visa map.
Real estate: a new law and a zone-based design
The "real estate owner" category rests on a separate instrument, and it is a new one. The Law of Real Estate Ownership by Non-Saudis was approved on 14 July 2025, published in Umm Al-Qura on 25 July 2025 and came into force on 21 January 2026, replacing the law issued by Royal Decree No. M/15 of 17/04/1421H; the implementing regulations are due within 180 days of publication. The design is zone-based: a non-Saudi may acquire ownership only within geographic zones approved by the Council of Ministers on the proposal of the Ministry of Municipalities and Housing and the Real Estate General Authority (REGA), with maximum ownership shares and usufruct terms set zone by zone; outside those zones one property is permitted for the owner's own residence.
In Makkah and Madinah only Muslims may acquire. The approved list of zones includes, in Riyadh, Qiddiya, New Murabba, Diriyah Gate, King Salman Park and KAFD, in Jeddah the city centre and 55 development areas, and also AlUla, NEOM, Amaala and the Red Sea project. The fiscal layer on a transaction is double: 5% RETT plus a REGA disposal fee of up to 5% of the property value on a disposal by a non-Saudi, with fines for breach of the law running to SAR 10m. The planning conclusion: a purchase made to qualify for status begins with checking the zone and the asset class, not with the budget.
The procedure and its gaps
Article 4 of the Law sets a closed list of conditions for the applicant: a valid passport, proof of financial capability, a clear criminal record and a medical report showing freedom from communicable diseases; the board of the Centre may add conditions. Article 5 leaves the decision to the Centre's discretion "subject to the public interest", and the permit is issued by its chief executive. The Law sets no deadline at all for deciding an application — a gap that no reference to a primary source will close.
The second gap is appeal: the Law contains no special procedure, so a refusal is challenged as an ordinary administrative decision, by an annulment claim in the Administrative Court of the Board of Grievances under the Law of Procedure before the Board of Grievances, issued by Royal Decree No. M/3 of 22/01/1435H (25 November 2013), where Article 8 allows 60 days from the date the applicant learns of the refusal.
The 30-months-in-any-five-years presence requirement is not a general rule of the programme but a condition of three of the January 2024 products: for special talent and gifted holders it opens, together with continued eligibility, the route into permanent status (the gifted holder also needs a fresh recommendation from the relevant ministry), while for the first-tier entrepreneur it conditions the single renewal of the five-year term — that tier does not convert to permanent status at all.
The investor, the second-tier entrepreneur, the real estate owner and both paid products carry no day requirement whatsoever. The annual paid track does not convert to permanent either: neither the Law nor any published decision provides for crediting the SAR 100,000 already paid against the SAR 800,000 single payment — treat it as a non-refundable price for a year of status.
Article 9 lists the grounds for cancellation: a criminal conviction, a deportation order, false information, breach of obligations, voluntary surrender, death and loss of legal capacity. Run the tax track alongside the immigration one: the date residence in the country of departure is broken, closing out filings, and the source-of-funds file for the bank. The second track is the longer one, and it determines the outcome.
The corporate layer: RHQ and thirty years of zero
For anyone moving more than themselves, the key instrument is the regional headquarters regime. The RHQ Tax Rules were approved by resolution of the Board of Directors of the Zakat, Tax and Customs Authority (ZATCA) No. 24-1-9 of 23/07/1445H and apply from 16 February 2024; the operative reading is the ZATCA Guideline for Regional Headquarters, second version, May 2026. Qualifying RHQ income is subject to corporate income tax at 0%, and payments to non-residents — dividends, related-party payments and payments for services necessary to the headquarters' activity — attract withholding tax at zero. The relief runs for 30 years from the date the RHQ licence is granted, is renewable, and ends early if the status is lost.
The price of the regime is genuine presence: under Article 5 of the Rules the substance conditions include a valid licence and adequate office premises in the Kingdom, adequate assets in the Kingdom, holding board meetings on the ground, at least one resident director, a headcount proportionate to the scale of the operation, and revenue derived from qualifying activities. This is a classic economic substance test, and a letterbox does not pass it.
The licensing layer sits apart from the tax layer, and it is the licensing layer that sets the operational minimum. The RHQ licence is issued by the Ministry of Investment (MISA), and its conditions, per the Mayer Brown and DLA Piper reviews, are these.
| Start of operations | within six months of the licence being granted |
|---|---|
| Headcount | at least fifteen full-time staff in the first year |
| C-level | at least three of them the group's most senior executives for the MENA region |
| Optional functions | at least three on top of the mandatory ones |
These conditions sit on the licence rather than on the tax regime, but the relief ends when the status is lost.
The non-tax sweeteners are a ten-year exemption from Saudisation requirements and the removal of caps on employee visa numbers. The enforcement lever is public procurement: since 1 January 2024 government bodies in the Kingdom do not contract with foreign companies that lack a regional headquarters there, and the exceptions are narrow — contracts worth no more than one million Saudi riyals, projects performed outside the Kingdom, a sole qualified bidder, and emergency circumstances.
Money and timing: MISA has levied no investment licence fee since 2024 — the former SAR 12,000 for the first year and SAR 62,000 on renewal are suspended, although no consolidated official text of that decision has been published and the figures are reconstructed from adviser briefings.
On a complete file the licence is issued in roughly 30 days, per the review of the draft revised RHQ rules (PwC Middle East, 2025), and the real budget for the regime is set not by fees but by fifteen employees, a Riyadh office and the relocation of C-level staff. How the RHQ reads from the owner's migration-planning side, and how it differs from Emirati headquarter services, is in migration routes for business owners. Separately, there are regional incentives: ten-year tax concessions for projects in less developed regions — Ha'il, Jazan, Najran and others — and relief from customs duties on machinery and raw materials for approved projects.
One line for anyone modelling the tournament economy: hosting rights to the 2034 FIFA World Cup were confirmed to the Kingdom by the Extraordinary FIFA Congress of 11 December 2024, but no package of tax guarantees for the tournament has been published, so nothing can be planned around it, and the working instruments remain the same — RHQ, the regional concessions and the ordinary withholding tax rules; how host guarantees sit against the participant's own position is unpacked in Article 17.
The sports layer: zero at source, and three qualifications to it
The territorial logic — the state of performance may tax an athlete's or entertainer's income with no day count and no monetary floor — is set out in the note on Article 17 of the OECD Model; the allocation of income across the countries on the calendar is in touring and tax residence. The Saudi peculiarity is exactly one: with no income tax, the source rate on a player's employment income is nil, so for home fixtures in Riyadh a Saudi resident pays nothing here and — if the previous residence was cleanly broken — nowhere else either. That arithmetic, not any "scheme", is what explains the size of Saudi league contracts.
Four standard Saudi mistakes
- Building the status on the "30 days plus a permanent home" limb: formally it confers Saudi residence on very modest presence, and precisely for that reason it is the first thing to fail in a dispute with the country of departure, where the permanent-home and centre-of-vital-interests tests apply.
- Forgetting RETT on a reorganisation: the 5% reaches indirect disposals too, meaning transfers of shares in real-estate-rich companies and not only the direct sale of an asset.
- Holding a land bank "until prices improve": after the White Land Tax reform the charge on a retained undeveloped plot runs up to 10% of assessed value a year, with the old flat 2.5% now the bottom tier of the scale, and a separate category takes vacant developed property at up to 5% of equivalent rental value.
- Running business income through as "tax-free" employment: activity of one's own falls into the corporate perimeter at 20% plus withholding, and recharacterisation follows the substance of the relationship rather than the label on the contract.
Separately, in one line: the zero in the Kingdom does not switch off the temporary non-residence rules of the country of departure — the British construction of sole UK residence in 4 of the 7 preceding years plus an absence of no more than 5 years is set out in the UK departure scenario.
The rules of the country you left: where zero stops being zero
There is no Saudi specificity in this layer, and the conclusion is a single one: the zero in the Kingdom creates no exemption at home, it moves the question to the rules of the country of departure. The British sequence and the temporary non-residence rule are in the UK departure scenario; breaking Russian residence while reporting duties on foreign accounts and the CFC rules survive is in exiting Russian tax residence; an exit tax with a deemed disposal of assets is in the exit tax survey. The American position is the harshest of all: the charge attaches to citizenship itself, so a move to Riyadh neither ends the filing obligation nor removes the exit tax on renouncing.
One refinement that bears directly on Saudi contracts: bonuses, signing fees and options accrued before the move but paid after it are allocated between countries by the period of accrual, not the date of payment — the mechanics are in getting paid after you move.
Money and the ceiling on the status: two figures and one limit
The cost of living against the Emirati alternative is set by indirect taxes: 15% VAT against 5% in the UAE, excise at 100% on tobacco and energy drinks and 50% on sweetened beverages, and customs duties of up to 25%. Banking access is tied to residence status: without it no account is opened, and source of funds is tested on standard private banking logic, which is why the working configuration usually keeps the investment and custody perimeter in the UAE and uses the Saudi account for salary and living expenses. The ceiling on the product itself: Premium Residency is not a route to citizenship — naturalisation in the Kingdom remains exceptional and discretionary, so a "second document" brief calls for a fundamentally different instrument, see citizenship by investment and the golden visa map.
Q/A
Is foreign-source income taxable in Saudi Arabia?
No — but because there is nothing to tax it under, not because a territorial system exempts foreign income. The practical consequence matters more than the wording: the Kingdom has no mechanism for taxing an individual's dividends, interest or capital gains, whether domestic or foreign. The question moves to the country of the paying source (withholding tax there) and to the country of former residence (its claw-back rules).
Does Premium Residency lead to Saudi citizenship or a passport?
No. The programme grants long-term residence with the right to own property, run a business without a kafeel, sponsor family and travel without a visa; the unlimited track has no expiry but it is not naturalisation. Saudi citizenship is granted on an exceptional, discretionary basis and is not built into the investment residence programme. For a comparison with programmes that do end in a passport, see the golden visa and citizenship-by-investment overview.
Saudi Arabia or the UAE — which suits an athlete better?
On the headline rate both give zero, so the choice turns on three other axes. First, treaty and paperwork: the UAE issues a tax residence certificate to a permit holder after 90 days, whereas the Saudi tests are 30 days plus a permanent home, or 183 days. Second, corporate: the UAE runs a 9% corporate tax with a threshold, the Kingdom 20% with a zero for RHQ. Third, cost of living and VAT: 5% against 15%. For a player whose club sits in the Saudi league, the contract usually settles the question long before the regimes are compared.
How do temporary non-residence rules break the Saudi zero?
Take the British mechanics: if a person was solely UK resident in at least 4 of the 7 preceding tax years and spent no more than 5 years outside residence, then in the year of return the charge revives on gains accrued during the absence, close company distributions to a material participator, pension lump sums, remitted foreign income and chargeable event gains on life policies. In other words, a three-year contract followed by a move home converts the "tax-free" period into deferred tax payable in a single lump.
How is a Premium Residency refusal appealed?
The Premium Residency Law contains no special procedure, and it sets no deadline for deciding an application either: Article 5 leaves the decision to the Centre's discretion "subject to the public interest". A refusal is therefore challenged as an ordinary administrative decision, by an annulment claim in the Administrative Court of the Board of Grievances under the Law of Procedure before the Board of Grievances (Royal Decree No. M/3 of 22/01/1435H), where Article 8 allows 60 days from the date the applicant learns of the refusal. Article 6 needs watching separately: once approved, the applicant has 30 days to pay the fee and take out medical insurance, and missing that deadline cancels the approval itself.
Is image rights and endorsement income taxed in the Kingdom?
Not as income of an individual, but not at zero by default either. Such receipts are usually documented as licence or service payments to a company, and a payment to a non-resident brings domestic withholding into play: 15% on royalties, 5/15/20% on services depending on type, remitted within the first ten days of the following month, with a treaty potentially reducing the rate. If the image rights structure sits in a company in a third jurisdiction, substance tests and the CFC rules of the country of former residence are added on top.