Starting 1 January 2024, Saudi Arabia will halt government contracts with any company whose regional headquarters is not located in the kingdom. This decisions comes in addition to other initiatives offering companies tax breaks and incentives to move their headquarters onto Saudi soil. The decision, as announced by Saudi Press Agency, is intended to attract more foreign capital, as well as “create more jobs, limit economic leakage, increase spending efficiency and guarantee that the main goods and services purchased by the different government agencies are made in the kingdom.” By making this decision, Saudi Arabia – trying to further diversify its economy to rely less on oil – will escalate competition with other Gulf States, primarily the United Arab Emirates, which is currently home to many if not most regional headquarters of foreign businesses in the Middle East. The Saudi Minister of Finance Mohamed Al-Jadaan addressed the issue, stating that the Dubai as a major regional business center has its competitive advantages, and that Saudi Arabia is working to increase complementarity and healthy competition. Al-Jadaan further highlighted that private companies may still have contracts with companies whose regional headquarters are…
KSA Issues Shock Decision With Potential Business Impact on Egypt and the Region
February 17, 2021
