Elite Wall Street boutique investment banks are encountering difficulties complying with Saudi Arabia’s regulatory requirements for regional headquarters (RHQ), prompting some firms to question their participation in the country’s drive to become a leading financial hub in the Middle East. The RHQ program, launched in 2024, aims to encourage multinational companies to establish their regional bases in Riyadh by imposing conditions that link business opportunities, particularly with government entities such as the kingdom’s $900 billion Public Investment Fund (PIF), to obtaining an RHQ license.
While firms like Lazard have embraced Riyadh as their Middle East headquarters, several prominent advisory firms including Moelis, Rothschild, PJT Partners, and Evercore continue to operate primarily out of Dubai and have yet to secure RHQ licenses despite opening offices in Saudi Arabia's capital. According to senior bankers at some of these boutiques, the program’s uniform requirements do not align with their operational models. The regulations mandate that companies maintain at least 15 full-time employees at their Saudi regional offices within a year of licensing, with staff expected to hold senior, managerial roles rather than revenue-generating positions. This stipulation presents a significant financial burden for smaller boutiques, which typically function with leaner teams.
Bankers expressed that the current RHQ conditions are not pragmatic, emphasizing the need for sufficient business volume to justify the added expenses. Some firms have reportedly sought clarifications or exemptions from the Ministry of Investment, which oversees the program. One bank described its application as “on hold,” while another indicated it might forgo pursuing the RHQ license entirely.
The reluctance of some boutiques to commit to the RHQ regime coincides with broader economic and geopolitical challenges facing Saudi Arabia. Capital markets and merger and acquisition activity in the kingdom have slowed in the first half of 2026, according to Dealogic data. Sources noted that the PIF is expected to reduce its international dealmaking, adopting a more inward-focused strategy. Furthermore, the ongoing conflict involving the United States and Israel against Iran has contributed to a reassessment of Saudi domestic and international spending priorities.
Despite these headwinds, Saudi officials claim the RHQ program has made strong progress, reporting more than 700 companies registered by mid-2026, surpassing the initial target for 2030. As of July, 19 financial institutions had secured RHQ licenses, with additional applications in the pipeline.
Bankers remain optimistic that the Saudi government, under the leadership of the newly appointed investment minister Fahad Al-Saif—a former HSBC executive—may adopt a more flexible approach to the RHQ requirements. Nevertheless, most maintain that while the Saudi market remains strategically important, they prefer to continue their involvement without necessarily committing to the full RHQ framework.
“We want to continue investing in our Saudi office, we’re happy with our Saudi business,” one senior banking executive stated. “Just not under the RHQ programme.”