How Saudi Arabia’s HQ rules affect UAE firms bidding for government projects
What UAE-based companies need to know about Saudi exemptions on public contracts
Dubai: Days after Saudi Arabia confirmed it would allow exceptions to its regional headquarters requirement, questions remain over how the revised rules work in practice and what they mean for foreign companies, including many based in the UAE, that bid for Saudi government projects.
The updated framework does not abolish the regional HQ policy introduced in early 2024. Instead, it sets out when and how Saudi government entities can seek approval to contract with foreign companies that do not have a regional headquarters in the Kingdom.
The change primarily affects international firms, including UAE-based companies, that were previously barred from Saudi government tenders unless they relocated their regional headquarters. Saudi authorities say the revised approach is intended to protect public spending efficiency and ensure the timely delivery of strategic projects.
What has changed now
Under a rule introduced in early 2024, Saudi government entities were prohibited from contracting with foreign companies whose regional headquarters were outside the Kingdom. That restriction has now been relaxed.
Government bodies can apply for exemptions that allow them to contract with foreign companies and institutions that do not have a Saudi regional HQ, provided specific conditions are met.
Who manages exemptions
The Local Content and Government Procurement Authority has notified government entities that exemption requests must be submitted digitally before a tender is launched or a direct contract is issued.
Requests are reviewed by a competent committee and can apply to:
A specific project
A group of projects
A defined time period
Two official circulars outline how requests are submitted and how existing contractual cases are handled under the revised framework.
Key role of Etimad platform
Exemptions are processed through the Etimad Platform, the Ministry of Finance’s digital system for managing budgets, tenders and government contracts.
Tenders issued through Etimad are eligible for the exemption service. Projects launched before the platform rollout, or outside it, continue under earlier procedures.
Saudi authorities say the platform supports transparency, efficiency and digital transformation in public procurement.
When foreign bids are accepted
Foreign companies without a regional HQ are not banned from participating in tenders, but their bids can only be accepted in limited cases:
When only one technically compliant bid is received
When the foreign bid is the best offer and at least 25% cheaper than the next competitor
Projects valued at SAR1 million ($267,000) or less are fully exempt from these controls.
Why this matters for UAE firms
Many UAE-based firms serve Saudi clients without having relocated their regional headquarters. The revised rules give Saudi entities flexibility to access specialised technical expertise or more competitive pricing when needed.
Saudi Arabia said in January that more than 700 international companies have already established regional headquarters in the Kingdom. The earlier policy had prompted some multinationals to restructure, including setting up parallel headquarters in both Dubai and Riyadh.
The revised approach keeps the regional HQ policy in place while allowing exceptions where project requirements or cost considerations make them necessary.
