Saudi Arabia softens regional HQ rule after surpassing initial target

Saudi Arabia has softened its strict regional headquarters rule just two years after requiring foreign firms to base their Middle East hubs in the kingdom to win government work.

Officials said government agencies may now seek exemptions to award contracts to companies that don’t have Saudi regional headquarters, using its Etimad procurement platform.

The Local Content and Government Procurement Authority is still setting tight conditions, allowing such bids only when a company is the sole qualified bidder or offers a price at least 25% lower than competitors.

Small contracts worth 1 million riyals ($266,000) or less are automatically exempt, and cabinet ministers can adjust the thresholds or halt the exceptions if they deem necessary.

The shift comes as more than 700 multinationals have already moved regional headquarters to Riyadh, well above the government’s earlier target of 500 by 2030.