In a major move, Saudi Arabia has allowed limited exemptions to its regional headquarters rule, permitting government entities to sign contracts with  international companies which do not have a base in the kingdom, reported the Saudi Gazette. This directive applies to all government agencies, institutions, funds, and their affiliated bodies.

Under the government’s earlier decision, contracting with any foreign company or commercial establishment whose regional headquarters is located outside the Kingdom was suspended as of early 2024. 

The Local Content and Government Procurement Authority has notified all relevant entities of the mechanism for submitting exemption requests through the “Etimad” digital platform. 

This measure seeks to strike a balance between adherence to the “Relocation of Headquarters” decision that came into effect from the beginning of 2024, and the practical requirements of projects involving highly specialized technical expertise or strong financial competitiveness, stated the report.

These exemptions are governed by specific regulations designed to preserve spending efficiency and ensure the timely execution of strategic projects, said the Saudi Gazette report.

According to reliable sources, the Local Content and Government Procurement Authority has formally communicated the regulatory framework governing government contracts with companies that do not maintain a regional headquarters in the Kingdom, as well as with related parties. 

The regulations permit government entities to submit a request to the designated committee seeking an exemption for a specific project, a group of projects, or a defined period. Such requests must be filed prior to issuing a tender or initiating direct contracting procedures, it stated.