Saudi Arabia has introduced a significant policy shift in its approach to government contracting, allowing public sector entities to seek exemptions for working with international companies that have not yet established regional headquarters in the Kingdom. The move signals a pragmatic recalibration of the ambitious headquarters relocation policy that took effect at the start of 2024.
New Exemption Framework Through the Etimad Platform
The Local Content and Government Procurement Authority has formally notified all government bodies of the new mechanism, which operates through the Etimad digital platform. Under the framework, government entities may submit exemption requests for specific projects, groups of projects, or defined time periods before issuing tenders or initiating direct contracting procedures.
The authority issued two circulars detailing the submission process and outlining how contractual cases should be handled under the new regulations. The electronic service for exemption requests was launched on the Etimad platform in November 2025 and is available to all government entities that publish tenders through the system.
The original policy, which suspended government contracting with foreign companies and commercial establishments whose regional headquarters are located outside Saudi Arabia, applies across all government agencies, institutions, sovereign funds, and their affiliated bodies.
Balancing Ambition With Practicality
The exemption mechanism reflects Saudi Arabia’s effort to balance two priorities: maintaining the momentum of its regional headquarters attraction program while ensuring that critical government projects are not delayed by a lack of specialized expertise or competitive pricing.
Companies without a regional headquarters in the Kingdom are not barred from participating in public tenders. However, their bids are accepted only under specific conditions. If only one technically compliant bid is submitted, the company may proceed. Alternatively, if the bid is deemed the most advantageous following a comprehensive technical evaluation and is at least 25 percent lower than the second-best offer, it qualifies for consideration. Projects valued at less than one million Saudi riyals are exempt from these restrictions altogether.
Over 700 Companies Already Relocated
The policy update comes against a backdrop of remarkable success in attracting multinational companies to Saudi Arabia. By early 2026, more than 700 international firms had relocated their regional headquarters to the Kingdom, surpassing the original Vision 2030 target of 500 companies well ahead of schedule.
The Etimad platform, operated under the Ministry of Finance, continues to serve as the central digital gateway for government financial services. It supports the Kingdom’s broader digital transformation agenda by enhancing transparency and efficiency across budgets, contracts, payments, and procurement processes, creating a seamless interface between government entities and the private sector.
The introduction of a structured exemption process demonstrates Saudi Arabia’s willingness to adapt regulatory frameworks in real time, ensuring that its ambitious economic diversification goals remain achievable without compromising the delivery of essential government services and strategic projects.
