Saudi Arabia's cabinet has approved legislation governing contracts for companies without regional headquarters in the kingdom.

However, the statement on the cabinet meeting did not disclose the regulations. It is also not clear if the regulation permits the government to award contracts to foreign companies that do not have their regional headquarters in the kingdom.

The Regional Headquarters (RHQ) Programme aims to attract foreign companies to set up their regional headquarters in the kingdom.

In February 2021, Saudi Arabia announced its plans to stop contracting with companies that do not have their RHQ situated in the kingdom. The RHQ Programme is set to be effective from January 1, 2024.

In December 2022, Saudi Arabia's Council of Ministers issued a resolution approving the regulations of government agencies contracting with entities that do not have a RHQ in the kingdom and their related parties.

The regulations will not apply to government works or procurements with an estimated value of less than SAR 1 million.

(Writing by Seban Scaria seban.scaria@lseg.com; editing by Daniel Luiz)