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Saudi Arabia announced on Tuesday it would grant 30 years of tax relief to multinationals establishing regional headquarters in the Gulf kingdom.

The announcement is an attempt to clear up a major question surrounding a programme intended to help transform Saudi Arabia, the world's biggest crude oil exporter, into a business hub with a more diversified economy.

It comes less than a month before a January 1 deadline for multinationals to open regional headquarters in Saudi Arabia or lose out on government contracts.

The tax-relief package includes a zero-percent rate for corporate income tax and withholding tax, the investment ministry said in a statement.

Executives had been seeking details of the tax scheme for months.

"This new incentive gives business more visibility and certainty for future planning as (multinational corporations) expand their presence in the region through Saudi Arabia, while also taking part in our own transformation journey," Finance Minister Mohammed al-Jadaan said.

"We look forward to welcoming more (multinational corporations) to participate in projects across all sectors, including our giga-projects and in preparation for the hosting of such events as the 2029 Asian Winter Games and Expo 2030."

Announced in February 2021, the 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.

More than 200 licenses have been granted under the programme to date, the Saudi investment ministry said.

But analysts say it remains to be seen 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 a regional centre.

Other benefits under the programme include the ability to apply for unlimited work visas and a 10-year waiver on quotas for hiring Saudi nationals.