Saudi Arabia said it will stop working with foreign firms that don’t base their Middle East headquarters in the kingdom, in its latest effort to shift the Gulf region’s business hub away from Dubai.
From Jan. 1, 2024 the government as well as agencies, institutes and funds owned by the state will no longer contract any companies or commercial institutions unless they have a regional hub in Saudi Arabia, according to a statement on the Saudi Press Agency attributed to an official source. The move is intended to encourage foreign firms to hire more Saudi nationals and limit “economic leakage,” according to the SPA report.
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Dubai in the United Arab Emirates has firmly established itself as the regional business hub for everything from banking to transport and logistics. As part of attempts to open and diversify its economy Saudi Arabia has though offered firms a package of incentives including tax breaks under a plan dubbed “Project HQ.”
A group of 24 international firms including Deloitte, PwC, Bechtel and PepsiCo said they were moving their regional headquarters to the kingdom at an annual investment conference organized by Saudi Arabia’s sovereign wealth fund last month.