The Minister of Investment – Khaled Al-Falih revealed 5 qualitative advantages for limiting contracting with international companies that have their headquarters in the Kingdom, starting from 2024, with the development of local content, attracting investments, increasing localization and transferring knowledge. He said that the decision reflects healthy competition in the economic field, and aims at obtaining the Kingdom what it deserves from foreign investments, noting that 24 major companies have applied to establish their headquarters in the Kingdom. He stressed in a press statement that foreign companies wishing to invest are considered as partners in the growth of the national economy, indicating that the foreign companies ’decision will not be at the expense of any country, but rather as a continuation of the economic partnership. Al-Falih said in a tweet on his official Twitter account: The decision to limit government agencies’ contracting to international companies that have a regional center in the Kingdom will positively reflect in providing thousands of jobs for citizens, transferring expertise, and localizing knowledge, as well as contributing to the development of local content. And attract more investment. A responsible source said that the Kingdom’s government is determined to stop contracting with any foreign commercial company or establishment that has a regional headquarters in the region in a country other than the Kingdom, starting from January 1, 2024, and that includes the government agencies, institutions and funds or any of its apparatus. The source indicated that this comes as an incentive to adapt the work of foreign companies and institutions that have dealings with the Kingdom’s government, government agencies, institutions and funds or any of its apparatus, in an effort to provide jobs, reduce economic leakage, raise the efficiency of spending, and ensure that the main products and services that are purchased from Before the various government agencies are implemented on the land of the Kingdom, and with appropriate local content. The source pointed out that this trend comes in line with the announcement of the strategic goals of the Kingdom of Riyadh 2030 during the Future Investment Initiative Forum, which was held recently, during which the intention of 24 international companies was announced to transfer their regional headquarters to Riyadh. The source emphasized that this will not affect the ability of any investor to enter the Saudi economy or continue to deal with the private sector, and the related controls will be issued during 2021. According to the Ministry of Investment, total foreign investments in Saudi Arabia reached 1.885 trillion riyals at the end of the second quarter of 2020, compared to 1.715 trillion riyals in the same quarter of 2019.
Foreign investments in Saudi Arabia include direct investment in the economy, portfolio investments – including equity, investment fund shares, debt securities, as well as other forms that include loans, currency, deposits, and other accounts payable. The increase in foreign investments, along with the increase in direct investment inside the economy, resulted in a 26.1% growth in portfolio investments to 580.49 billion riyals compared to 460.3 billion riyals at the end of the second quarter of 2019.
Foreign investments in the Saudi economy
1.8 trillion riyals, total foreign investment
24 international companies move their headquarters to Riyadh
$ 4 billion in foreign direct investment last year