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Saudi Arabia issued an ultimatum to international companies that they will no longer be eligible for government contracts starting in 2024 unless they have a regional headquarters (HQs) in the kingdom. That strategy is paying off.
In a recent interview with Bloomberg, the Minister of Investment, Khalid Al-Falih, said that Saudi Arabia has exceeded its target for attracting regional HQs, with over 180 companies now established in the kingdom. This impressive achievement surpasses the initial goal of securing 160 HQs by the end of 2023.
Major companies like Pepsico, PwC Middle East, and GE Healthcare have opened regional HQs in Saudi Arabia.
In the interview, Al-Falih underscored that the regional HQs program is a “long-term journey” and emphasized the kingdom’s commitment to fostering a business-friendly environment that attracts and retains global companies.
“The rate is picking up to the tune of 10 companies per week that are being licensed in Saudi Arabia, and they are being provided with a good set of incentives,” the minister said.
This influx of global companies is a significant milestone for Saudi Arabia’s Vision 2030, which aims to diversify the economy and attract foreign investment. Above all, the HQ program is designed to create more jobs for Saudis.
Saudi Arabia’s FDI inflows have soared to 10th place globally, amassing a staggering $33 billion in 2021 and 2022 alone.
“It is the impact of Vision 2030. Within 2016 and 2022, our FDI has grown significantly by double digits on an annual basis,” he added.
Al-Falih describes the kingdom as a “friendly” and “stable jurisdiction” for international investors, offering a sanctuary of political and economic steadfastness.
Saudi Arabia aims to get 480 companies to open regional HQs by 2030.
In 2021, Saudi Arabia hosted less than 5% of regional company headquarters, starkly contrasting to the UAE, which currently hosts the regional HQ for 76% of companies.