Saudi Arabia will no longer sign contracts with foreign companies without a regional headquarters inside the Kingdom starting from 2024; state news agency SPA reported on Monday.
"Saudi Arabia intends to cease contracting with companies and commercial institutions with regional headquarters not located in the Kingdom… The cessation will include agencies, institutions and funds owned by the government. It will take effect January 1, 2024," SPA said, citing an official source.
The move also aims to "create more jobs; limit economic leakage; increase spending efficiency; and guarantee that the main goods and services that the different government agencies purchase are in the kingdom."
"The decision… will reflect positively in the form of creating thousands of jobs for citizens, transferring expertise, and localizing knowledge. It will also contribute to developing local content and attracting more investments to the kingdom;" Saudi Minister of Investment Khalid al-Falih also said in a tweet.
The new policy is with Vision 2030, Saudi Crown Prince Mohammed bin Salman's plan to diversify the Kingdom's economy away from a reliance on oil and generate jobs locally.
SPA noted that "24 international companies announced their intent to move their regional headquarters to Riyadh" at last month's Future Investment Initiative (FII).
The Crown Prince said in January that Saudi Arabia's sovereign wealth fund will invest $40bn annually in the domestic economy over the next five years, as the kingdom also seeks to boost job creation.
PIF's role also expanded to finance development projects in the country. Local investments made by PIF reached SAR58bn in 2019 and it aims to invest 96 billion riyals locally in 2020. It managed over the past few years to create 190,000 jobs, the Crown Prince added.