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Goldman Sachs may set up its Middle East regional hub in Saudi Arabia, in line with a recent push by the kingdom to bring global corporations within its borders. The New York-based investment bank recently received a license from the Saudi Ministry of Investment to establish headquarters in Riyadh, Bloomberg reported citing people familiar with the matter.
It’s not yet clear if or when Goldman will move employees into the country, or how many would be transferred. Goldman declined Quartz’s request for comment.
Marc Nachmann, Goldman’s global head of asset and wealth management, said at the Qatar Economic Forum last week that companies based in the Middle East make up about 7% of the MSCI Emerging Markets Index — a figure which could grow to as much as 10%, he said.
“International investors are going to have to pay more attention to the region,” Nachmann said, pointing to the large investment potential in the Persian Gulf. Goldman’s private wealth management arm currently has bases in Dubai and Tel Aviv.
The kingdom’s RHQ program
Saudi Arabia’s Ministry of Investment and the Royal Commission for Riyadh City jointly launched the Regional Headquarters Program in a bid to make Riyadh a global business hub. The program, which was first announced in February 2021 and went into effect at the start of this year, gave multinational corporations an ultimatum: incorporate their regional headquarters within the country, or don’t expect to do business here.
Participating companies will benefit from a tax incentive program offering a 0% corporate tax and withholding tax rate for 30 years applied on all activities related to their Saudi-based headquarters.
In part, the program is looking to usurp neighboring Dubai’s dominance in the region. The city, the most populous within the United Arab Emirates and its commercial capital, has the highest concentration of Middle East regional headquarters. Of the Fortune 500 companies with Middle East headquarters, 70% are located in Dubai, according to data from Infomineo.
The push appears to be paying off, with more than 400 international companies having obtained regional licenses in the country, Investment Minister Khalid Al-Falih said earlier this month, according to Bloomberg.
Saudi-washing
The Saudi government has been splashing money into several sectors, from technology to sports, as it seeks to raise its international profile — and distract from an image associated with oil, fossil fuels, and human rights violations. Among its investments: technology and sports, among others.
The country has reportedly earmarked $40 billion to invest in artificial intelligence technology. Representatives from the kingdom’s Public Investment Fund are working with some top U.S. financiers on the AI fund, including Andreessen Horowitz, according to The New York Times.
Saudi has given billions of dollars in multiple rounds of funding over the last decade to Silicon Valley, with backing for several major companies including Lyft and Uber, and indirect funding through its contributions to SoftBank’s Vision Fund, which made investments into Slack, WeWork, GM Cruise, and others.
And the sports world has also gotten cozy with the Saudi regime, most notably in the case of the LIV Golf tour launched in 2021. LIV Golf Investments is backed by the Saudi Public Investment Fund, its majority shareholder, and was launched in 2021. It has a roster of 54 players, with top players Phil Mickelson and Dustin Johnson reportedly offered more than $200 million to join the tour.