On Saturday, 21 February, Saudi Arabia reversed previous restrictions to allow government entities to contract with international companies that do not have regional headquarters in the Kingdom.
The Local Content and Government Procurement Authority informed government agencies about the new mechanism for submitting exception requests through the Etimad digital platform.
Etimad is a unified Saudi digital platform under the Ministry of Finance that streamlines government procurement, budget management, and financial transactions between public entities and the private sector.
This shift balances the enforcement of the “regional headquarters relocation” rule, introduced in early 2024, with the practical demands of projects requiring specialized expertise or competitive pricing.
Under the earlier directive, all government entities, institutions, and affiliated authorities were barred from contracting with foreign companies lacking regional headquarters in Saudi Arabia. This decision was initially intended to bolster local business engagement.
With the new exception process in place, government entities can request exemptions for specific projects, groups of projects, or defined periods, provided these requests are submitted prior to initiating any direct contracting procedures.
The Etimad platform, operated by the Ministry of Finance, will facilitate the exception service to promote transparency and efficiency in government operations.
While foreign companies are not entirely barred from participating in public tenders, their bids will only be accepted in two scenarios: when only one technically compliant bid is submitted, or if the bid is at least 25 percent lower than the next best offer.
Additionally, projects valued at SAR 1 million ( USD 266,000) or less are exempt from these controls.
This strategic change comes as Saudi Arabia continues to attract multinational companies to relocate their regional headquarters to the Kingdom, with over 700 companies having made the move by early 2026, surpassing initial targets. Finally, Saudi authorities have emphasized that this decision will not hinder any investor’s ability to enter or operate within the Saudi market, further solidifying the Kingdom’s position as a competitive setting for foreign investment.
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