A wave of ribbon-cutting ceremonies is sweeping the Saudi capital as multinationals face a January deadline to open regional headquarters in the Gulf kingdom or lose out on government contracts.

In what has become a common scene, executives in suits and Saudi officials in white robes gather to inaugurate the new offices, sipping Arabic coffee in a haze of incense smoke while singing the praises of last year`s fastest-growing G20 economy.

Announced in February 2021, Saudi Arabia`s regional headquarters (RHQ) programme is widely seen as a bid to compete with Dubai in the neighbouring United Arab Emirates, a favourite base for global firms with business in the Middle East. 

Despite complaints from some executives that there remains a lack of clarity on key details of the Saudi programme, the January 1 deadline is holding, the Saudi investment ministry told AFP in a written response to questions. 

`Multinational companies that are part of the RHQ Program will be well positioned to bid for projects funded by the Saudi Government,` it said. 

`Only multinational companies with regional headquarters in the Kingdom will be eligible for tenders and contracts floated by government entities.` 

So far, 162 regional headquarters licenses have been granted in sectors including pharmaceuticals, IT and construction, `with many others being processed`, the ministry said. 

The big question, analysts say, is whether participating firms are merely ticking a box to retain access to Saudi funds or genuinely embracing the government`s vision of Saudi Arabia as the centre of the region. 

The programme is `an early litmus test of the degree to which foreign businesses are prepared or willing to comply with and buy into Saudi initiatives, or whether they will seek workarounds that see them retain the majority of staff in the UAE and delegate a select few to Saudi,` said Kristian Ulrichsen, a fellow at Rice University`s Baker Institute. 

It should also offer clues about the implementation of flagship projects such as a new airline and airport, and the $500 billion (about R9.2 trillion), futuristic mega-city known as NEOM, Ulrichsen said.

`Jumping through hurdles` 

Riyadh defines a regional headquarters as an office that provides `strategic direction, management, and support services for company subsidiaries, branches, and affiliates in the (Middle East and North Africa) region`, the investment ministry said. 

One firm, IHG Hotels & Resorts, placed its new office on the 12th floor of a skyscraper in the capital`s financial district, staffing it with 25 employees from departments including revenue management, sales, marketing, design and engineering.

IHG has been present in Saudi Arabia for nearly 50 years, actively bids for government projects including developments along the Red Sea Coast and plans to open 20 hotels across the kingdom in 2024 and 2025, Haitham Mattar, managing director for the Middle East and Southwest Asia, said during the office`s ribbon-cutting ceremony in October.

But the company also has offices in Dubai and elsewhere in the region, and `we will continue with those offices`, Mattar told AFP. 

As for the process of establishing a Saudi regional headquarters, he acknowledged there were some kinks to work out. 

`It took us a bit of time and jumping through hurdles to achieve our licence for this office. However we are there now which is great and that`s what we`re happy and positive about,` he said. 

`This is all new to Saudi Arabia, right? So we have to really be conscious of that. There`s a lot of trial-and-error, there`s a lot of perfecting some of the processes, and sometimes some of the processes have maybe one too many steps.` 

`Ambitious` targets

The investment ministry has touted benefits for firms setting up regional headquarters in Saudi Arabia, including the ability to apply for unlimited work visas and a 10-year waiver on quotas for hiring Saudi nationals.

But it has not specified what kind of tax relief the firms might receive, a major question for executives. 

Laurent Germain, CEO of French construction engineering firm Egis Group, nevertheless told AFP he had no regrets about establishing a regional headquarters in Saudi Arabia last year, and that he advised other French firms to do the same. 

`We`ve come into a situation where now it is in Saudi Arabia that we have the most activities in the Middle East, and probably so for the next 10 years. It was a natural step,` he said. 

Germain added that he did not necessarily see the regional headquarters programme in the context of a budding Riyadh-Dubai rivalry, but rather as a broader bid to hit `very ambitious` foreign investment objectives.

`They are taking all the measures they can to increase the attractivenes

The reasons for the delays are causing people many problems 

Relative visas (any category) and Sec 11(6) my experience is that DHA taking anything from 18-24 months to process these applications. 

The delay is creating the following challenges to people :

- with Sec 11(6) employers do not want foreigner to commence work without valid visas and cannot wait so long. Often this results in offer / contract revoked. This delay therefore affects SA companies as well. 

The concession in many cases does not help for the above affected foreigner as some are on relative visas who have changed to sec 11(6) as they started a new job / some are on a Sec 11(6) which has company A’s details on bit moved to company B hence the new sec 11(6) visa was submitted. The current concession only extends the current expired visa which is of no use then to these foreigners and their new / prospective employers.  

- some sec 11(6) holders working for same employer cannot travel for business purposes as they are from visa NON exempt countries so cannot come back as they are not always traveling to their country of origin when traveling for business. 

- in general the sec 11(6) and relative delay is also taking away the opportunity for many to apply for PR as they have to wait for the outcome of temporary residence . 

- passports that were valid for 12-24 months expire while waiting and then rejections are issued. This waited over a year just to have it put back into the system and flooding the appeal section.

- Home Affairs have referred all Spouse / Life partners temporary residence visas to Department of Labour and DTI to check on work if a South African can do the job and business to DTI to see if person invested R5 million which is in contradiction to 3 Constitutional Court rulings that says this test is not required  and DTI and labour don’t have the manpower to action which means it will be stuck for a long time unresolved . 

What are my options?

Most of our clients after 6 months or so want to go to court and we can do that . In PTA for example the unopposed motion (other applications) roll is packed. The dates we currently get is in April 2024, ie 6 months from now .  The court order gives the DHA 10 days then to attend and finalise application and gives a punitive cost order. 

DHA have a tendency to finalise the application either just after the court order is served or just ( within  a month or a few days before the court date). 

So if we go legal route based on the above it is 8-12 months from date of court submission processes to outcome. And that is because of the court application or court order having been served on them.

What will it cost me . We have fixed fees so do not charge per hour or per copy, message etc. like our specialist legal  attorney firms work . 

How can we help you , please email us to info@samigration.com whatsapp message me on: 

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Migration may be an increasingly contentious issue in South Africa, but that does not justify taking an axe to refugee rights and chipping away at the country’s commitments under the United Nations’ 1951 Refugee Convention, as the Department of Home Affairs (DHA) recently proposed alongside other immigration reforms.

Frustrations have risen across the board. Scapegoating of foreigners by officials has pushed many South Africans to blame migrants for their economic woes. Migrants, refugees, and asylum seekers suffer from xenophobic attacks and a backlogged asylum system. Home Affairs minister Dr. Aaron Motsoaledi characterized current migration legislation as “unworkable,” citing some contradictions between existing laws.

Among the DHA’s proposals are that South Africa withdraw from the Refugee Convention and reaccede to it with reservations, cherry-picking which rights to respect. However, the need for immigration reforms does not give the government carte blanche to toss away its human rights commitments.

At a November 12 press conference, Motsoaledi claimed South Africa “does not have the resources to grant the socio-economic rights envisaged in the 1951 Convention.” Refugee rights to education and work are likely ones the DHA would put on the chopping block.

This would be a damaging backslide on South Africa’s commitments. In 2018, South Africa endorsed the Global Compact on Refugees, which builds on the Comprehensive Refugee Response Framework. These instruments recognize the importance of refugee integration and inclusion, highlighting that access to education and labor markets promotes refugee self-reliance and contributes to local economies.

DHA is also proposing a “safe first country” rule that could deny asylum to people who transited through other countries en route to South Africa. However, without measures to guarantee impacted asylum seekers would be safe in those countries or have access to effective protection, such a rule would risk sending people to chain deportations and other harms, in violation of international law. For example, Greek authorities have sent back asylum seekers that transited Turkey, claiming it was “safe,” yet refugees and asylum seekers there suffered grave abuses and even deportation to Afghanistan, Syria, and other refugee-producing countries.

South Africa’s constitution proudly proclaims that it was founded on the values of human dignity and that “South Africa belongs to all who live in it, united in our diversity.” Officials should keep these values in mind ahead of the country’s 2024 elections and ensure immigration reforms protect, not undermine, refugee rights.

Home Affairs minister Aaron Motsoaledi caused some confusion this week by claiming that his department was not exacerbating South Africa’s skills crisis because there was no backlog of visas.

This comment came just a few weeks after the minister told parliament that the department was sitting with a backlog of over 74,000 visa applications that would only be cleared up by mid-2024.

In an interview this week, Motsoaledi dismissed criticism that his department is causing a skills crisis in the country by failing to process work-permit applications and said it’s becoming a “scapegoat” for the failures of business.

The minister said there’s no backlog of critical-skills applications and said his department is working expeditiously to process requests in the pipeline.

According to Marisa Jacobs, an immigration specialist at Xpatweb, the good news is that the minister is correct in saying there is currently no skills or work visa backlog.

Jacobs said the department has been fast-tracking applications that have been correctly submitted and are fully compliant.

“In stark contrast to the waiting periods for other categories, work visas and study visas are processed within four weeks by the Department of Home Affairs Head Office,” she said.

However, this does not mean that all is well with this category of visa, she said.

“Work visas submitted at the South African High Commissions and Embassies abroad are subject to their own processing times, and we are seeing inconsistent processing times depending on country of submission,” said Jacobs. 

This is amplified by many offices with a new rotation of officials in the immigration seat still settling in, combined with high volumes of applications pushing the processing times over the estimated period, causing frustration.

“There is also a higher rate of rejection, where Head Office processes the application and this means that the applicant must submit an appeal, causing a backlog on a work visa of more than 12 months,” she said.

The same can be said for waiver applications in support of a General Work Visa application, where the processing time is set at a minimum of 12 months.

“In summary, while work visas are prioritised, and we are consistently seeing good processing times – but there are a variety of exceptions, and this fuels frustration among expats,” Jacobs said.

Visa chaos is still there

Regarding the backlog of tens of thousands of visas, the bad news is that there is still a massive backlog, and several categories are impacted.

These include Permanent Residency applications, Waivers, Appeals, Retired person visas, and visitor’s visas for spouses and dependents.

While not related to work visas, these categories are experiencing an “unprecedented backlog”, where applicants can end up waiting 18 months or longer.

“These applicants are often deeply personally impacted by the backlog, and following a legal route is often the only way to get a legally correct outcome,” Jacobs said.

Motsoaledi told parliament this month that his department has developed a “backlog eradication plan” which aims to have the backlogs cleared by June 2024.

“The plan aims to move the older Temporary Residency Visas applications from 2022 concurrently with the current applications of 2023. This will be done by splitting the temporary residence visa team into two,” he said.

The same approach is being implemented for Permanent Residence Permits, he said.

“The plan includes the utilisation of current capacity in the Immigration Branch supported by the additional officials from other branches, including those in provinces. It also includes those officials who have returned from the Foreign Missions after serving their four-year deployment term.”

Other options to supplement existing capacity and resources are also being looked at and may be implemented should it be deemed necessary to do so to support the eradication plan.

“The Department is also reviewing the immigration permitting delegations as well as Standard Operating Procedures,” he said.