Foreign firms race to open offices in Saudi Arabia before deadline

A wave of ribbon-cutting ceremonies is sweeping the Saudi capital as multinationals face a January deadline to open regional headquarters in the Gulf kingdom or lose out on government contracts.

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In what has become a common scene, executives in suits and Saudi officials in white robes gather to inaugurate the new offices, sipping Arabic coffee in a haze of incense smoke while singing the praises of 2022's fastest-growing Group of 20 economy.

Announced in February 2021, Saudi Arabia's regional headquarters (RHQ) programme is widely seen as a bid to compete with Dubai in the neighbouring United Arab Emirates (UAE), a favourite base for global firms with business in the Middle East.

Despite complaints from some executives that there remains a lack of clarity on key details of the Saudi programme, the Jan 1 deadline is holding, the Saudi Investment Ministry told AFP in a written response to questions.

"Multinational companies that are part of the RHQ programme will be well positioned to bid for projects funded by the Saudi government," it said.

"Only multinational companies with regional headquarters in the kingdom will be eligible for tenders and contracts floated by government entities."