Saudi Arabia clarifies that regional headquarters will not be mandatory in all government tenders under new exemption rules | World News

Saudi Arabia now allows conditional exemptions for foreign companies lacking regional headquarters in the kingdom/Image: File

Foreign companies without regional headquarters in Saudi Arabia are no longer automatically excluded from competing for government contracts. Under the revised procurement framework, government entities can apply for structural exemptions that would relax strict relocation requirements in 2024 while retaining broader policy objectives.

Starting in early 2024, government agencies will not be allowed to sign contracts with foreign companies with regional headquarters outside Saudi Arabia. The directive applies to all government agencies, agencies, funds and their affiliated entities.The new steps do not undo that decision. Instead, it introduces a structured route to exceptions where projects require highly specialized technical expertise or are justified by strong financial competitiveness.The Local Content and Government Procurement Authority has formally communicated the regulatory framework governing such contracts, including arrangements involving related parties.

Government entities may now submit requests to designated committees seeking exemptions:

This request must be made before issuing a tender or initiating the direct contracting process.To streamline the process, the authority has launched electronic services through the “Etimad” digital platform. The service will go live in November 2025 and will be available to government entities issuing tenders through the platform.For tenders published prior to the launch of the service, or outside of “Etimad”, the previously established submission mechanisms will continue to apply.The “Etimad” platform is the official electronic portal for financial services of the Ministry of Finance. It supports the digital transformation of government operations and aims to increase transparency and efficiency in budget, contract, tender, payment and procurement processes.The system also aims to enhance interaction between government entities and the private sector.

The regulation clarifies that companies without regional headquarters in the Kingdom are not automatically excluded from public tenders. However, their bid will only be accepted under two specific conditions:

Projects with an estimated value not exceeding QR1 million are exempt from these restrictions.

By early 2026, more than 700 international companies will have moved their regional headquarters to Saudi Arabia. This number exceeds the original target of attracting 500 companies by 2030.The relocation policy was introduced to deepen the integration of foreign companies working with Saudi government entities and affiliates. It also seeks to create jobs, reduce economic leakage, improve spending efficiency and ensure that key products and services are provided domestically with appropriate local content.The latest exemption mechanism reflects an effort to maintain these goals while leaving room for expertise and competitive advantage when needed.