Saudi Arabia will not work with foreign firms without local presence from 2024

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CAIRO, Feb 15 (Reuters) – Saudi Arabia will no longer sign contracts with foreign companies which do not have a regional headquarters in the kingdom after 2023, state news agency SPA reported on Monday, citing an official source.

The policy, which comes into effect on Jan 1. 2024, is designed to encourage foreign firms to open a permanent local presence that would help create local jobs, SPA reported.

Foreign firms have for years used neighbouring United Arab Emirates as a springboard for their regional operations, including for Saudi Arabia.

The Saudi policy will apply to government agencies, institutions and funds, the source was quoted as saying, with new regulations to be issued this year.

Once it comes into effect, it would increase efficiency of state spending, help keep capital within the country and guarantee the main goods and services purchased by the government were of local origin, SPA said.

Saudi Arabia’s de-facto ruler, Crown Prince Mohammed bin Salman, has pledged to open up the kingdom and diversify its economy under a series of reforms since his father, the king, made him next in line to the throne in 2017.

SPA earlier this month reported 24 foreign companies had announced their intention to open regional offices in Saudi Arabia, including PepsiCo and Tim Hortons.

(Reporting by Nayera Abdallah, writing by Alexander Cornwell; Editing by Giles Elgood)

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