Saudi Arabia will no longer sign contracts with foreign companies that do not have a regional headquarters in the kingdom after 2023.

The policy, which takes effect on January 1, 2024, encourages foreign firms to open a permanent, in-country regional presence to help create local jobs.

“The deadline is not new, and yes, it will be implemented,” Finance Minister Mohammed Al Jadaan told Reuters when asked whether the January deadline is on track.

Jadaan also said that a tax framework had been agreed upon, without elaborating, in response to companies raising concerns about the regulatory framework in Saudi Arabia, including taxation, and speculation that the government could extend the deadline to accommodate investor doubts.

The Saudi policy will apply to government agencies, institutions, and funds. Once it comes into effect, analysts believe it would increase the efficiency of state spending, help keep capital within the country, and guarantee the main goods and services purchased by the government were of local origin.

The country wants 480 companies to open regional HQs by 2030, and already, 80 companies have been granted licenses to establish headquarters in Saudi Arabia, with companies like PepsiCo leading the way.