DUBAI (Reuters) - Bank of New York Mellon ( BK ) has received a licence to set up a regional headquarters in Saudi Arabia, it said on Thursday, joining others lured by incentives as the kingdom seeks to boost its appeal as a financial hub.

WHY IT'S IMPORTANT

Riyadh has been looking to attract more companies to set up their regional headquarters in the kingdom by offering tax breaks as Crown Prince Mohammed bin Salman looks to wean the economy off oil by attracting foreign investment.

Saudi Arabia's new rules mandate foreign firms to have regional headquarters in the kingdom before they can access lucrative government contracts.

CONTEXT

In May 2024, Goldman Sachs ( GS ) received a licence to set up its regional headquarters in Riyadh. U.S. lender Citigroup ( C/PN ) secured a similar approval late last year.

The Middle East has emerged as a crucial growth market for global banks like BNY, driven by a surge in sovereign wealth fund activity, large-scale infrastructure investments, and deepening capital markets across the Gulf.

As regional economies diversify beyond oil and attract foreign capital through reforms and regulatory upgrades, international financial institutions are ramping up their presence to tap into new business opportunities in asset servicing, custody, and advisory.

WHAT'S NEXT

The new regional headquarters in Riyadh will offer strategic, administrative and corporate support for BNY's operations across the Middle East, the custodian bank said.