From the start of 2024, Saudi Arabia introduced a new requirement for companies seeking to do business with the government: they must have a regional headquarters in the country.
The change was first introduced three years ago to give firms time to fully move their offices to Saudi as they seek the vast investment opportunities on offer throughout the Kingdom’s economy.
When the new rule was announced in 2021, critics argued that it would be difficult to implement. Some said global companies would not come, or that the rule would deter foreign investment and would likely be reversed before going into effect.
Now that 2024 has arrived, the situation on the ground shows that such fears were misplaced. There has been a steady flow of companies applying to set up offices in the country, in general, and Riyadh, in particular.
Their arrival will stimulate further development and highlight the seriousness of the Kingdom’s ambitions to open up and diversify its economy – as outlined in the Vision 2030 reforms – and will maximise the potential positive impact on its gross domestic product (GDP), which measures the value of all the goods and services produced by a country.
Before the launch of Vision 2030, Saudi GDP was estimated at about $666.7bn, or 2.5tn riyals in local currency. Today, it has grown to $1.1tn, or 4tn riyals.
This represents unprecedented growth. It is widely seen as a remarkable development in global terms. As well as some of the strongest growth rates in the world, the Kingdom now has a more vibrant economy, which has become one of the most dynamic in the region as well as the most influential.