Saudi Arabia has announced that it will stop contracting with companies with regional headquarters outside the Kingdom by 2024, state media reported.
The move aims to “to incentivize the localization of businesses by foreign companies that deal with the Kingdom’s government or any of its agencies, institutions and funds,” Saudi Press Agency reported.
The decision also aims to create more jobs, increase spending efficiency, and guarantee goods and services are made with “appropriate local content” among others.
Saudi finance minister Mohammed al-Jadaan said, “Saudi Arabia has the largest economy and population in the region, while our share of regional headquarters is negligible, less than 5% currently. You can imagine what does this decision mean in terms of FDI (foreign direct investment), knowledge transfer and job creation,” he told Reuters.
However, this will not affect the capability of businesses to engage with the Kingdom’s private sector.
The Gulf state’s decision also aligns with its Vision 2030.