Khaled Al Faleh, Saudi Arabia's investment minister, during a panel session on day three of the World Economic Forum (WEF) in Davos, Switzerland, on January 19, 2023. Image Credit: Bloomberg

Cairo: Around 80 foreign companies have been licensed to set up regional headquarters in Saudi Arabia, the kingdom’s Investment Minister Khaled Al Faleh has said.

“The number of companies, which have been granted licences to establish regional premises in the kingdom until the end of last year, are nearly 80,” Al Faleh said at the World Economic Forum in Davos, according to Saudi news portal Akhbaar24.

The official did not give a breakdown.

Al Faleh said that the kingdom has launched initiatives aimed to attract investment to build a diversified economy.

“The kingdom has allocated incentives for new investments decided by an ad-hoc committee,” he was quoted by the Saudi news website Ajel.

A new investment system in Saudi Arabia ensures equality among Saudi and foreign investors, the official added.

In recent years, Saudi Arabia has introduced investor-friendly facilities as part of efforts to diversify its economy and turn into a business hub.

Saudi Arabia has, meanwhile, set restrictions on its government institutions’ contracting with companies that are not based in the country, Saudi newspaper Okaz reported this month.

According to rules recently approved by the Saudi Cabinet, the government agencies are required to abide by certain stipulations when having to strike contracts with the firms that have no regional headquarters in the kingdom.

Exempted from these restrictions are business and purchases whose estimated cost does not exceed SR1 million, or those implemented outside the kingdom, the paper said, citing regulations published in Saudi Arabia’s Official Gazette, Umm Al Qura.

Under these rules, the Saudi government bodies are not allowed to invite companies with no premises in the kingdom or their subsidiaries to participate in their adjudications except in two specific cases.

The first is the non-existence of more than one qualified competitor outside these companies to implement works, or provide the required purchases. The second is an emergency case in which there is no other way than inviting such firms, the report said.

The stipulations, moreover, obligate the government agencies contracting any firm not based in the kingdom or any subsidiary party to present a report listing reasons for such a contract to the General Bureau for Auditing, and the Expenditure and Project Efficiency Authority within 30 working days of the contract signing date at most.