Saudi Arabia is ramping up pressure on foreign companies to shift their Middle East headquarters to the kingdom by 2024 or they will not win government contracts, news reports said Tuesday quoting the Saudi finance minister.
Saudi Arabia plans to suspend contracting companies whose regional hubs are in the Kingdom, posing a direct challenge to neighboring Dubai as regional competition escalates.
The decision by Saudi Arabia, the region's biggest economy and the largest oil exporter in the world, is aimed at persuading international companies to open a permanent, in-country presence that would help create employment opportunities for locals.
The move, to take effect starting Jan. 1, 2024, aims to attract foreign investment, increase the efficiency of government spending and spur local jobs, the state-run Saudi Press Agency reported quoting an official source.
Saudi Crown Prince Mohammed bin Salman has pushed a $800 billion masterplan to double the size of Saudi Arabia's capital of Riyadh and turn it into a world finance and trade destination.
Last month, a group of 24 foreign companies including PepsiCo, Deloitte and Bechtel said during an investment conference organized by Saudi's sovereign wealth fund that they were moving their regional operations to the kingdom.
"True growth begins in the city, whether in terms of industry, innovation, education, services or other sectors," Arab News quoted the prince as saying during a recent trade event. "I have no doubt that the global economies are not based on nations, but on cities," he said.
Dubai established itself as a regional business center for everything from banking to shopping malls and transport and is a close ally of the kingdom.
The decision won't affect any investor's ability "to enter the Saudi market," The Associated Press said, noting that further measures will be announced throughout the year.
