Impact of Saudi Arabia's HQ Rules on UAE Firms

Feb 26, 2026

67 min

Feb 26, 2026 01:30

How Saudi Arabia’s HQ rules affect UAE firms bidding for government projects

## Revised HQ Rules in Saudi Arabia

Saudi Arabia has recently adjusted its regional headquarters (HQ) policy, impacting foreign companies, including those based in the UAE, that bid for government projects. The original rule, introduced in 2024, required foreign firms to have their regional HQ in Saudi Arabia to participate in government tenders. However, the new framework allows for certain exemptions.

## Exemptions and Conditions

Saudi government entities can now seek approval to contract with foreign companies without a Saudi-based HQ, provided specific conditions are met. These exemptions are managed through the Local Content and Government Procurement Authority and must be submitted digitally via the Etimad Platform before a tender is launched.

## Criteria for Foreign Bids

Foreign companies without a regional HQ are not entirely excluded from bidding. Their proposals can be accepted if they are the sole technically compliant bid or if their offer is at least 25% cheaper than the next competitor. Projects valued at SAR1 million or less are exempt from these restrictions.

## Implications for UAE Firms

Many UAE-based companies have been serving Saudi clients without relocating their HQs. The revised rules provide Saudi entities with the flexibility to access specialized expertise or more competitive pricing. This change maintains the regional HQ policy while allowing exceptions when necessary, supporting both strategic project delivery and cost efficiency.

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