These are the reasons why international companies should have a head office in Saudi Arabia

With the intention of the Saudi government to end government agency contracts with any foreign company or business establishment with regional headquarters in the region outside the Kingdom, from 2024, a responsible source explained the reasons for the decision.

The Saudi government source said the move was an incentive to work by foreign companies and institutions that deal with the Kingdom’s government, authorities, institutions and funds affiliated with the government or one of its agencies.

The move also comes in an effort to create jobs, reduce economic leakage, increase spending efficiency and ensure that key products and services purchased by various government agencies are implemented on Kingdom lands and with content. appropriate local.

This move is in line with the announcement of the Kingdom’s capital ‘Riyadh 2030’ strategic goals at the recent Future Investment Initiative Forum, at which 24 international companies were announced. to move their regional headquarters to Riyadh.

The decision will not affect the ability of any investor to enter the Saudi economy or continue to do business with the private sector, and related checks will be issued in 2021.

At a time when foreign direct investment in the world has declined by more than 40% due to the Corona pandemic, foreign investment in the Kingdom has seen growth in 2020 specifically, according to the report of the United Nations Conference on the trade and development “UNCTAD”.

Going back to the year 2019, foreign direct investment in the world fell 42% to $ 859 billion from $ 1.5 trillion in 2019, while Saudi Arabia attracted foreign investment in 2019 worth $ 4.562 billion, $ 1.249 billion in the first quarter, and $ 1,122 billion in the second quarter, $ 1,150 billion in the third quarter and $ 1,042 billion in the fourth quarter.

In contrast, in the first three quarters of 2020 (the year of the pandemic), Saudi Arabia received foreign investment worth $ 3.56 billion, which exceeds the value of the first three quarters. of 2019 of $ 39 million.