Saudi Arabia has decided to give contracts for its development projects only to those international companies and commercial institutions that have their regional headquarters in the Kingdom, senior officials have said, in a move that will have far reaching consequences.

According to a report by Saudi Press Agency, citing official sources, the directive has been made in accordance with the announcement of the strategic goals of the capital, Riyadh 2030, during the Future Investment Initiative Forum which was held recently.

During the event, 24 international companies revealed that they intend to move their regional headquarters to Riyadh, the source said.

Furthermore, he added that the decision aims to incentivise the localisation of businesses by foreign companies that deal with the kingdom’s government or any of its agencies, institutions, and funds, in addition to creating more jobs, limit economic leakage, boost spending efficiency, and guarantee that the main goods and services purchased by the different government agencies are made in the kingdom with appropriate local content.

The cessation will include agencies, institutions and funds owned by the government and will take effect from January 1, 2024, he continued.

Such decision will not affect any 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 during 2021, the source concluded.