Monday, March 4, 2024

Saudi Arabia's decision on foreign companies has come into effect… these are the exceptions


A deadline set by Saudi Arabia for foreign companies to set up their regional headquarters in the kingdom, or face losing government contracts worth hundreds of billions of dollars, came into force on Monday, with several exceptions.

According to the kingdom's official newspaper Umm Al-Qura newspaper, exceptions include contracts for up to one million riyals ($266,681), executed outside the kingdom, with companies deemed to be the sole supplier of their services or goods. , and emergency situations are intractable. Except for a foreign company that does not have a regional headquarters.

Companies without regional headquarters can still compete in government bids, but government agencies can only approve their bids if the bid is technically superior and 25 percent cheaper than the next best bid, or if there are no competing bids.

The Saudi cabinet approved the deal restrictions last week, but did not disclose their details at the time.

The council did not specify the number of contracts worth less than one million riyals that a foreign company could sign with the same government agency.

Foreign companies rushed to prepare for the deadline, but complained of lack of clarity on tax regulations and jurisdiction.

The tax incentives, including exemption from corporate income tax for 30 years, were announced within a month of the deadline.

Saudi Investment Minister Khalid al-Balih said in November that 180 companies had agreed to establish their regional headquarters in Riyadh.

As the world begins to move away from oil, Gulf states compete for influence and foreign capital.

The deadline puts Riyadh in competition with its neighbor, the United Arab Emirates, and is part of efforts by Crown Prince Mohammed bin Salman to end the economy's dependence on oil and attract foreign companies to the kingdom.

See also  Sunday and Monday are official holidays in the Sultanate of Oman due to the weather
Rolf Colon
Rolf Colon
"Creator. Award-winning problem solver. Music evangelist. Incurable introvert."

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