Nov 22 (Reuters) - U.S. bank Citigroup ( C/PN ) has

received approval to establish its regional headquarters in

Saudi Arabia's Riyadh, according to an internal memo seen by

Reuters on Friday.

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 also mandate foreign firms to have

regional headquarters in the kingdom or risk losing hundreds of

billions of dollars in lucrative government contracts.

The Wall Street giant received the approval from the

Ministry of Investment Saudi Arabia (MISA), according to the

memo.

"This marks a significant leap forward for our franchise

in Saudi Arabia and we look forward to our continued growth in

the kingdom," Citi Saudi Arabia CEO Fahad Aldeweesh said in the

memo.

Bloomberg News reported the development earlier in the day.

Wall Street titan Goldman Sachs ( GS ) also received a

license in May to set up its regional headquarters in Saudi

Arabia's Riyadh.

(Reporting by Arasu Kannagi Basil in Bengaluru and Tatiana

Bautzer; Editing by Devika Syamnath)