Saudi Arabia Approves Contracting Regulation Sans Regional HQs In The Kingdom

The Saudi Cabinet, which is chaired by Crown Prince Muhammed bin Salman, approved regulations impacting government contracts with companies that lack regional headquarters in the Saudi Kingdom. The decision came days before the deadline given by the Saudi government for such companies. They were asked to move out before by January 2024, or lose billions of dollars in lucrative government contract.

On February 2021, the Arab nation announced that it would terminate contract with any foreign companies or commercial institution that does not have a regional headquarters in the country, effective from January 2024. On November, Investment Minister of Saudi, Khalid Al-Falih said that 180 companies have obtained licenses for regional headquarters, surpassing the target of 160.

However, the statement on the Cabinet did not reveal anything about the regulations. Whether the foreign companies that do not have regional headquarters in the Kingdom will be given government contract is to be clarified yet. The ultimatum is said to be one of the move from Muhammed bin Salmaan in weaning the country’s economy off oil and to draw foreign business into Saudi Arabia, making the country a tough competitor of its neighbour, United Arab Emirates.

The Cabinet session that took place on Tuesday included international discussions that are aimed at enhancing cooperation and global initiatives. Situation in the Palestinian territory was also on the table during the Cabinet meeting. Saudi Arabia expressed gratitude towards the UN Security Council’s decision in increasing the humanitarian aid to Gaza. The Cabinet called for international community to address Israeli forces’ violation of rules including the killing and displacement of innocent civilians.