Saudi cabinet approves contracting rules for firms not based there

CAIRO (Reuters) – Saudi Arabia’s cabinet on Tuesday announced its approval of contracting regulations for firms that do not have regional headquarters in the Kingdom, Saudi state news agency SPA reported.

The decision comes just days before Saudi Arabia’s January 2024 deadline for companies to move their regional headquarters to the kingdom or risk losing hundreds of billions of dollars in lucrative government contracts.

The statement on the cabinet meeting did not disclose the regulations. It is not clear if they permit the government to award contracts to foreign companies that do not have regional headquarters in Saudi Arabia.

Saudi officials did not immediately respond to requests for comment outside regular business hours.

Finance Minister Mohammed Al Jadaan told Reuters in October that the deadline for a move would be enforced, even as foreign firms struggled to meet the deadline amid unclear regulations.

The ultimatum, part of efforts by Crown Prince Mohammed bin Salman to wean the economy off oil and draw foreign business into the kingdom, puts Riyadh in competition with its neighbour the United Arab Emirates, the traditional financial hub of the region.

(Reporting by Adam Makary; Editing by Nick Macfie)