Saudi government contracts ‘will only be awarded to firms headquartered in the kingdom’

16 Feb 21

Companies seeking government contracts in Saudi Arabia will need to set up regional headquarters in the country by 2024, an official has said.

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Saudi oil fields

Oil fields in Saudi Arabia. Image © Shutterstock

According to the Saudi Press Agency, the kingdom’s government wants to encourage businesses to create jobs in the country, which is already the region’s largest economy.

The agency reported an official source as saying authorities want to “limit economic leakage, increase spending efficiency and guarantee that the main goods and services purchased by the different government agencies are made in the kingdom with appropriate local content”.

A source told news agency Reuters that some sectors would be exempt from the move, with details to come later this year.

Saudi Arabia is trying to shift its economy away from its historic dependence on oil exports, with Crown Prince Mohammed bin Salman trying to open the kingdom and attract more foreign direct investment.

His reform agenda, known as Vision 2030, involves privatising state-owned enterprises and property, building the Public Investment Fund into the world’s largest sovereign wealth fund, supporting the renewable energy sector, investing in the digital economy and exploring Saudi Arabia’s mineral resources.

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