Saudi Arabia on Monday heaped pressure on foreign companies to move their Middle East headquarters to the kingdom, saying it will stop signing contracts with firms with hubs in other countries from 2024. The bold ultimatum could intensify competition for business and foreign capital between the kingdom and other Gulf states, especially its principal ally, the United Arab Emirates, as they reel from an economic slump.

“Saudi Arabia intends to cease contracting with companies and commercial institutions with regional headquarters not located in the kingdom,” the official Saudi Press Agency (SPA) reported, citing an unnamed official source. “The cessation will include agencies, institutions, and funds owned by the government and will take effect January 1, 2024.”

The decision seeks to “create more jobs, limit economic leakage, increase spending efficiency and guarantee that the main goods and services purchased by the different government agencies are made in the kingdom,” it added. Saudi Arabia, the biggest Arab economy, has been struggling to attract foreign investment, a key pillar of Crown Prince Mohammed bin Salman’s “Vision 2030” economic diversification plan to boost non-oil revenue.

Source Credit: Voice of America