Citigroup Inc. (C), one of the leading financial institutions in the United States, has received approval to establish its regional headquarters in Riyadh, Saudi Arabia. This development marks a significant milestone for the bank as it expands its presence in the Middle East. The approval was granted by the Ministry of Investment Saudi Arabia (MISA), as revealed in an internal memo seen by Reuters and Bloomberg News.

Saudi Arabia has been actively encouraging international companies to set up regional bases within its borders by offering incentives such as tax breaks. This initiative is part of Crown Prince Mohammed bin Salman's broader strategy to diversify the kingdom's economy away from oil dependency by attracting foreign investment. The new regulations require foreign firms to establish regional headquarters in Saudi Arabia or risk losing access to lucrative government contracts.

Citi's move follows similar steps by other financial giants. Earlier this year, Goldman Sachs received a license to set up its regional headquarters in Riyadh, and BlackRock Inc. has also recently been granted a license. According to a senior adviser to the investment ministry, over 500 companies have established their regional headquarters in Riyadh since the program's inception.

Fahad Aldeweesh, CEO of Citi Saudi Arabia, expressed optimism about the bank's future growth in the kingdom, highlighting the strategic importance of this expansion. This development underscores Saudi Arabia's growing appeal as a hub for global financial firms, reflecting the kingdom's success in attracting major players in the industry.