Good news for retailers as Saudi Arabia relaxes local headquarters rules


Saudi Arabia will allow some companies to operate without having headquarters in the country, which is great news for small retailers in the kingdom.

Businesses with overseas activities under SAR1 million ($266,000) can operate in the kingdom without having a local headquarters. Firms competing for government contracts without any other bidders are also exempt from the rules, reported Khaleej Times.

The news comes following a Companies’ Law that was passed by the Saudi Cabinet on June 28.

Arab News said the kingdom has two conditions under which government agencies can invite companies that are headquartered outside the kingdom to work.

“The first condition is the absence of more than one qualified competitor other than the companies with a regional headquarters in the kingdom or related parties to carry out the business or secure the required purchases.

“The second condition is the existence of an emergency situation that can only be overcome or dealt with by inviting those companies that do not have a regional headquarters in the kingdom or from the relevant parties “, Arab News reported.

The kingdom previously stated that, starting in 2024, it will no longer sign contracts with international businesses unless their regional offices are established in the kingdom.

According to the regulations reported in Khaleej Times, businesses without a head office in the kingdom will not be permitted to sign contracts with any person, institution, or fund linked with the government or its agencies.

Within 30 days of signing a contract, government organisations working with international businesses without a Saudi headquarters must submit a letter of justification.

In order to create new industries and diversify the oil-rich economy, Saudi officials anticipate that 480 firms would have their headquarters in the country by 2030.

Khaleej Times reported in October 2021 that 44 companies received government licences to set up headquarters in the country, which included Unliver, Philips and Tim Hortons, among others.

Riyadh has put in place investor-friendly infrastructure as part of efforts to diversify its economy and establish itself as a leading business hub.