General view shows the empty garden of the King Fahd Library, following the outbreak of coronavirus disease (COVID-19), in Riyadh, Saudi Arabia March 19, 2020.
General view shows the King Fahd Library in Riyadh, Saudi Arabia March 19, 2020. Image Credit: Reuters

Abu Dhabi: Saudi Arabia is to cease awarding contracts to companies and commercial institutions that have regional headquarters outside the Kingdom, the Saudi Press Agency has reported. The move - to come into effect on January 1, 2024 - will cover institutions and funds owned by the government.

The decision aims to incentivise the localisation of businesses by foreign companies that deal with the Saudi government or any of its agencies, institutions, and funds. Plus, this will create more jobs, limit economic leakage, increase spending efficiency, and guarantee that the main goods and services purchased by different government agencies are made in the Kingdom.

The directive is made in accordance with the 2030 strategic goals of the Kingdom, announced during the Future Investment Initiative forum held recently, during which 24 international companies announced their intent to move their regional headquarters to Riyadh.

The source stressed that such a decision will not affect an investor’s ability to enter the Saudi market, or to continue their business with the private sector, stating that regulations related to this decision shall be issued this year.