Saudi Arabia has revised a key procurement policy, allowing government entities to contract foreign companies that lack regional headquarters in the Kingdom, reversing a restriction introduced in early 2024.
The decision, announced through guidance circulated by the Local Content and Government Procurement Authority, is intended to preserve cost efficiency and ensure strategic projects proceed without delays caused by limited bidder pools. Authorities said entities can now request exemptions before launching tenders or direct contracting processes.
Under the earlier directive, all state bodies and affiliated institutions were barred from engaging foreign firms whose regional headquarters were located outside Saudi Arabia. The policy formed part of a broader initiative encouraging multinational companies to relocate regional bases to the Kingdom.
The revised framework introduces conditional flexibility. Government agencies may apply for exceptions covering individual projects, groups of projects, or defined timeframes, subject to committee approval. Two official circulars outline procedures for submitting requests and managing contracts under the new rules.
Applications for exemptions must be filed via the Etimad Platform, the Finance Ministry’s digital system for public budgeting and procurement. Tenders issued before the platform’s rollout or conducted outside it will continue under earlier submission mechanisms. The platform is designed to enhance transparency, oversight, and administrative efficiency across government contracting.
Participation by foreign firms is still subject to strict acceptance conditions. Bids may be approved only if a single technically compliant offer is received, or if a foreign bidder submits the best evaluated proposal priced at least 25 percent lower than the next competitor. Contracts valued at SAR 1 million or less are exempt from these controls.
Analysts say the adjustment reflects a pragmatic shift aimed at balancing national localisation goals with the practical need for specialised expertise, advanced technology, and competitive pricing in major infrastructure and development projects.
