Saudi cabinet approves contract rules for firms not based in Kingdom

Saudi Arabia’s cabinet announced on Tuesday its approval of contract regulations for firms that do not have regional headquarters in the Kingdom, state news agency SPA has reported.

According to Reuters, the decision comes just days before Saudi Arabia’s January 2024 deadline for companies to move their regional headquarters to the Kingdom or risk losing hundreds of billions of dollars in lucrative government contracts.

The statement on the cabinet meeting did not disclose what the regulations are. It is not clear if they permit the government to award contracts to foreign companies that do not have regional headquarters in Saudi Arabia. Saudi officials did not immediately respond to requests from Reuters for comment outside regular business hours.

Finance Minister Mohammed Al-Jadaan told Reuters in October that the deadline for a move would be enforced, even as foreign firms struggled to meet the deadline amid unclear regulations.

The ultimatum is part of the efforts by Crown Prince Mohammed Bin Salman to wean the Saudi economy off oil and draw foreign business into the Kingdom. It puts Riyadh in competition with its neighbour the UAE, the traditional financial hub of the region.

 Poll: 96% of Saudis oppose normalisation with Israel