Stock - Saudi economy / Riyadh skyline
Riyadh skyline, Saudi Arabia. Image Credit: Bloomberg

Cairo: Saudi Arabia has set restrictions on its government institutions contracting with companies that are not based in the country, a local newspaper has reported.

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, Okaz added.

Exempted from these restrictions are business and purchases, the estimated cost of which 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.

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