Gulf countries are rethinking their approach to attracting multinational companies as they prepare to adopt a global minimum corporate tax of 15 percent by January 2025. Historically known for their tax-free environment, these nations are now offering targeted incentives to stay competitive and lure investments.

The UAE, which introduced a 9% corporate tax last year, has announced plans for additional tax benefits starting in 2026. According to the UAE’s Finance Ministry, these include a refundable tax credit ranging from 30% percent to 50% for companies engaged in research and development.

Saudi Arabia is also taking bold steps, offering foreign firms a 30-year tax exemption for establishing regional headquarters in the kingdom. This exemption includes zero corporate tax and no withholding tax during the period.

While Bahrain still maintains a zero percent corporate tax for most sectors, its participation in the OECD global tax agreement suggests potential changes in the coming years. Oman, on the other hand, had already aligned with the OECD minimum tax rate back in 2017.

Despite the shift, Gulf nations remain attractive to global businesses due to their cheap energy, world-class infrastructure, and high quality of life. Recent moves by major corporations highlight this appeal. Financial giant Morgan Stanley is relocating its Middle East headquarters to Riyadh, while hedge fund Marshall Wace is establishing a base in Abu Dhabi.

Energy firms, including Shell and BP, are backing a major liquefied natural gas initiative led by Adnoc, and US beauty brand Kosas has entered the Gulf market through Sephora.

The region’s governments are not only focused on financial incentives but also on aligning investments with their long-term visions, such as Saudi Vision 2030 and UAE Centennial 2071. These ambitious plans aim to diversify economies away from oil, with major investments in AI, renewables, and logistics.

Events like Abu Dhabi Finance Week reflect the region’s growing focus on innovation and global relevance. The 2024 edition of ADFW attracted 20,000 delegates managing over $42.5 trillion in assets, showcasing the Gulf’s commitment to economic transformation.

For companies looking to expand or set up in the Gulf, aligning with these nations’ goals for diversification, innovation, and localisation is becoming vital. Those that contribute ideas, expertise, and talent alongside capital stand to gain the most in this evolving economic landscape.