Economy11 minutes ago (Feb 15, 2021 02:36PM ET)
© Reuters. FILE PHOTO: Cars drive past the King Abdullah Financial District in Riyadh
CAIRO (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, in-country regional presence that would help create local jobs, SPA reported.
“The decision … will reflect positively in the form of creating thousands of jobs for citizens, transferring expertise, and localizing knowledge, as it will contribute to developing local content and attracting more investments to the kingdom,” Minister of Investment Khalid al-Falih later wrote on Twitter.
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 (NASDAQ:) and Tim Hortons.
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