The recent period witnessed a race between major foreign companies to open headquarters in Saudi Arabia to support its regional presence in the Gulf and the Middle East. According to the platform of the Saudi Projects website, among the companies that opened headquarters in Saudi Arabia are the American Laila Company specialized in the manufacture of products and pharmaceutical industries, the German Bosch company specialized in the industrial and technology sectors, and Schlumberger in the energy sector. The list also witnessed the Chinese company Newtech in security services and the American company PepsiCo in the industry Food and Beverage, American Fluor in engineering services, Etisalat Digital in communications and digital transformation, as well as Indian Oyo companies in hospitality, tourism and hospitality, PwC in advisory and financial services, and Startup 500 in supporting and developing start-ups.
The Saudi government said to foreign companies that it will not be able to obtain government contracts from 2024 unless its regional office in the region is based in the Kingdom, and according to a recent Reuters poll, the American construction company “Bechtel” said that it had taken Riyadh as its regional headquarters to cover the six member countries of the Kingdom. Gulf Cooperation Council, while US technology company CSG announced that it will move its regional office from Dubai to Riyadh, and Indian hotel startup Oyo indicated that it will set up its regional headquarters in the King Abdullah Financial District.
On the other hand, economists indicated that there are 7 economic returns for foreign companies to open regional headquarters in the Kingdom, which are represented in increasing the strength and durability of the economy, the developmental movement, accelerating the completion of projects, the flow of more investments and the transfer of expertise, in addition to providing more job opportunities, and developing national cadres, noting that The Kingdom possesses several elements that make it attractive to these companies, the most prominent of which are its geographical position, the clarity of regulations and laws related to foreign investment, and the exemptions provided by the state.
Professor of Economics at King Abdulaziz University in Jeddah, Dr. Osama Falali, explained that the expansion of foreign companies in opening their headquarters will contribute to the transfer of expertise from local companies, especially in the field of technology and technology, and provide more jobs, especially in light of the improvement of the legislative and regulatory environment and the increase in exemptions provided by the state to companies. And launching more projects, especially those related to technology, energy and services.
Professor of Economics at Al-Faisal University, Dr. Muhammad bin Dalim Al-Qahtani, stated that the economic returns from opening regional headquarters for foreign companies in the Kingdom are represented in accelerating the completion of development projects, the influx of more foreign currencies, increasing job opportunities, and developing existing national cadres, as well as exchanging experiences between local and foreign companies. He stressed that the Kingdom is characterized by several elements that make it attractive to foreign investment, including clarity of regulations and laws related to foreign investment, and the Kingdom’s geographical position. He pointed to the qualitative increase in foreign direct investments last year to more than 5 billion dollars, despite the slowdown in economic activity against the background of the repercussions of Corona, estimating the volume of total foreign investments at two trillion riyals in various sectors.