A total of 44 multinational companies on Wednesday received licenses to move their regional headquarters to Saudi Arabia’s capital Riyadh, the official Saudi Press Agency (SPA) reported.
“The licenses were issued at the fifth edition of the Future Investment Initiative, attended by the world’s most influential leaders in business and government,” SPA said.
The Kingdom expects the companies to set up regional headquarters in the capital and move to Riyadh within a year, the President of the Royal Commission for Riyadh City, Fahd al-Rasheed, told Reuters.
“All of them within a year, and some of them have already done that,” al-Rasheed said of the timeline for the moves.
Among the 44 companies are multinationals in sectors including technology, food and beverages, consulting and construction including Unilever, Baker Hughes and Siemens, a press release said.
The world’s top oil exporter and largest Arab economy in February said it would give foreign firms until the end of 2023 to set up headquarters in the country or risk losing out on government contracts.
The new headquarter establishments would add 67 billion riyals ($18 billion) to the economy and provide around 30,000 job opportunities by 2030, al-Rasheed, said in a statement.
Al-Rasheed told Reuters he expects the 44 firms to move to Riyadh within a year, adding that some had already done so. He said the target was for 480 companies by 2030.
The Kingdom earlier this year said 24 companies had signed agreements to establish main regional offices - including PepsiCo, Schlumberger, Deloitte, PwC and Bechtel - rather than oversee operations remotely from the UAE’s Dubai emirate.
European law firm DWF Group said on Wednesday that Riyadh would become its regional headquarters for business services.
“We are simply saying - you need to have your regional headquarter here because this is not simply a contract economy that you come in and come out. We want to see you with us for the long term,” al-Rasheed said.
An initial batch of companies signed MoUs at the last edition of FII in January, with more companies signing up in the following months, the press agency reported.
According to SPA, through the Regional Headquarters Attraction Program of Multinational Companies, these companies now have direct access to the region’s largest economy, gaining financial and geographic opportunities whilst being part of Riyadh’s transformation.
Since the program’s launch earlier this year, regional headquarters have been legally defined as a unit of a multinational group duly established under the laws of Saudi Arabia for the purpose of supporting, managing, and providing strategic direction to its branches, subsidiaries and affiliates operating in the MENA region.
“I am delighted by the number of multinational companies that have chosen to relocate to Riyadh, demonstrating that our national capital is becoming an increasingly attractive place to do business and developing into an investment destination of choice,” Saudi Arabia’s Minister of Investment, Khalid al-Falih, said.
“These companies have recognized the unique opportunities presented by Vision 2030 and are well positioned to reap the potential rewards,” he added.
The minister said this comes two weeks after the launch of Saudi Arabia’s National Investment Strategy, which will further unleash the opportunities on offer through a series of initiatives designed to improve the Kingdom’s business environment.
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