International companies without headquarters in Saudi Arabia “will have to make a choice” to land contracts with the government in 2024 -finmin

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LONDON, Feb. 16 (Reuters) – International companies wishing to participate in Saudi government investment opportunities “will have to make a choice” and establish a regional headquarters in the kingdom from 2024 or they will not win government contracts, a Said Saudi Minister of Finance. told Reuters on Monday.

Saudi Arabia, the region’s largest economy and the world’s largest oil exporter, plans to stop contracting with companies and commercial institutions that are not regionally headquartered in the Kingdom in the aim to encourage foreign companies to open a permanent presence in the country which would help to create local jobs. Read more

They will however be free to work with the private sector.

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“If a company refuses to move its headquarters to Saudi Arabia, it is absolutely their right and they will continue to have the freedom to work with the private sector in Saudi Arabia,” Mohammed al-Jadaan said by telephone. “But as long as it’s tied to government contracts, they’ll have to have their regional headquarters here.”

He added that some sectors will be exempt from the decision and detailed regulations will be published before the end of 2021.

“Saudi Arabia has the largest economy and the largest population in the region, while our share of regional headquarters is negligible, less than 5% currently. You can imagine what this decision means in terms of FDI (foreign direct investment), knowledge transfer and jobs. creation, ”Jadaan said.

Saudi Arabia’s de facto ruler, Crown Prince Mohammed bin Salman, has pledged to open up the kingdom and strengthen its economy as part of an ambitious reform strategy that aims to diversify the oil-dependent economy , attract foreign investment and create jobs for millions of young Saudis.

Foreign companies have for years used the neighboring United Arab Emirates as a springboard for their regional operations, including Saudi Arabia.

Jadaan said the current business environment could be improved and the government would complete judicial and regulatory reforms and improve the quality of life so that businesses and people feel comfortable relocating to Riyadh.

At the same time, he stressed that Dubai, as a major regional business hub, has its own competitive advantage. “We will continue to complement each other and have healthy competition,” he said.

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Reporting by Marwa Rashad; additional reporting by Nayera Abdullan in Cairo; Editing by Dan Grebler

Our Standards: Thomson Reuters Trust Principles.

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