Saudi Arabia Streamlines Foreign Firm Access to Government Projects

Saudi Arabia has revised its regulations to allow foreign companies to participate in government projects even without establishing a regional headquarters within the Kingdom. This move aims to enhance spending efficiency and ensure the timely completion of strategic initiatives, signaling a more flexible approach to foreign investment. The changes, announced on February 21, 2026, build upon a previous policy introduced in early 2024 that initially mandated a regional headquarters for foreign firms seeking government contracts.

Easing Restrictions on Foreign Contractors

Previously, a government decision suspended contracting with any foreign company whose regional headquarters was located outside of Saudi Arabia, effective from early 2024. This directive applied to all government entities, institutions, funds, and affiliated authorities. However, the recent revisions introduce exceptions, allowing government bodies to request exemptions through the digital Etimad Platform . These exceptions are granted when specialized technical expertise or financial competitiveness are key factors.

The Role of the Etimad Platform

The Etimad platform, the Ministry of Finance’s official digital gateway for budget, contract, and procurement management, plays a central role in this new process. Exception requests are submitted through Etimad, ensuring transparency and efficiency. Tenders launched before the rollout of the new rules or those conducted outside the platform will continue to follow the previous submission procedures.

Conditions for Bid Acceptance

While the rules do not outright bar foreign companies from participating in public tenders, acceptance of bids is limited to specific scenarios:

• Only one technically compliant bid is submitted.
• The bid represents the best offer following evaluation and is priced at least 25% lower than the next competitor.

Projects valued at SAR 1 million or less are exempt from these controls.

Tendering Committee Management

Governmental entities can establish and manage tendering committees through the Etimad platform, covering areas such as bid examination, awarding contracts, handling appeals, and managing technical tenders. Committees must have at least three members, plus a chairman, and be reconstituted every three years.

Implications for Foreign Businesses

This policy shift represents a significant development for foreign companies seeking to engage in Saudi Arabia’s substantial government procurement market. The ability to bid on projects without a regional headquarters reduces barriers to entry and fosters greater competition. However, navigating the Etimad platform and understanding the exception process will be crucial for success.

Looking Ahead

Saudi Arabia’s move to allow exceptions for foreign companies underscores its commitment to attracting investment and accelerating the implementation of its ambitious Vision 2030 plan. The flexibility introduced by these new regulations is expected to boost project efficiency and ensure access to specialized expertise, ultimately contributing to the Kingdom’s economic diversification and growth.