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Why Did 630 Int’l Companies Choose Saudi Arabia as Regional Headquarters?

An aerial view of the Saudi capital, Riyadh (AFP)
An aerial view of the Saudi capital, Riyadh (AFP)
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Why Did 630 Int’l Companies Choose Saudi Arabia as Regional Headquarters?

An aerial view of the Saudi capital, Riyadh (AFP)
An aerial view of the Saudi capital, Riyadh (AFP)

While Saudi Arabia is preparing to host 450 new regional headquarters for a number of international companies, in addition to issuing 180 licenses, Asharq Al-Awsat interviewed experts about the factors that attract companies to the Kingdom.

Saudi Minister of Investment Eng. Khaled Al-Falih has recently announced an agreement to grant 450 foreign investors licenses to establish their regional headquarters in Saudi Arabia, mainly in Riyadh.

Giant projects

Experts confirmed that the Kingdom offers giant investment opportunities and projects that are attractive to international companies, in addition to the country’s strategic location that connects three continents and allows reaching 40 rapidly growing markets within four hours by plane.

Experts say the Kingdom is the ideal place for multinational companies to establish their regional headquarters. The country is witnessing economic transformations and has an attractive investment environment, as the government has worked on regulatory and legislative reforms that facilitate the process of foreign companies accessing the Saudi market.

Geographical location

The head of the Saudi Governance Center, Nasser Al-Sahli, told Asharq Al-Awsat that Saudi Arabia was the largest economy in the Middle East and North Africa, and occupied the 18th place among the largest economies in the world, in addition to its distinguished geographical location that makes it the focus of attention of major international companies.

Al-Sahli stated that Saudi Arabia was currently working on several giant projects, in addition to having all the capabilities and incentives that attract the private sector.

In return, many foreign firms are looking for opportunities to expand their business and access these projects, he remarked, noting that not having a regional office in the Kingdom will deprive them of these promising opportunities.

For his part, economic expert Ahmed Al-Shehri told Asharq Al-Awsat that international companies are choosing Saudi Arabia as the headquarters for their regional offices, based on the country’s economic prosperity and tangible progress in all international indicators.

He added that the government has implemented legislative and regulatory amendments, in addition to providing incentives to facilitate entry procedures for foreign companies.

Al-Shehri stated that Saudi Arabia currently represents an attractive investment destination due to its geographical location that connects three continents, making it an ideal place for multinational companies to establish their regional offices.

In February 2021, Saudi Arabia announced plans to cease contracting with companies whose regional headquarters are not in the Kingdom by Jan. 1, 2024, to help create local jobs, boost investment, and ensure economic diversification within Vision 2030 and the strategic plan for Riyadh.

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China Approves $840B Plan to Refinance Local Government Debt, Boost Economy

Visitors walk past a shop under construction with a dragon mural at the Sanlitun shopping district in Beijing, Friday, Nov. 8, 2024. (AP Photo/Ng Han Guan)
Visitors walk past a shop under construction with a dragon mural at the Sanlitun shopping district in Beijing, Friday, Nov. 8, 2024. (AP Photo/Ng Han Guan)
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China Approves $840B Plan to Refinance Local Government Debt, Boost Economy

Visitors walk past a shop under construction with a dragon mural at the Sanlitun shopping district in Beijing, Friday, Nov. 8, 2024. (AP Photo/Ng Han Guan)
Visitors walk past a shop under construction with a dragon mural at the Sanlitun shopping district in Beijing, Friday, Nov. 8, 2024. (AP Photo/Ng Han Guan)

China on Friday approved a 6 trillion yuan ($839 billion) plan to help local governments refinance their mountains of debt, in the latest push to rev up growth in the world’s second largest economy.

The plan will be implemented over the next three years, Xu Hongcai, vice-chairman of the National People's Congress's financial and economic committee, said at a news conference Friday.

Finance minister Lan Fo'an estimated that the hidden debt of local governments was 14.3 trillion yuan ($2 trillion) at the end of 2023. Hidden debt refers to debt that has not been disclosed publicly, The Associated Press reported.

Lan said 2 trillion yuan would be allocated each year from 2024 to 2026 to help local governments resolve their debts. He estimated that the amount of hidden debt will drop to 2.3 trillion yuan ($320.9 billion) by the end of 2028.

Officials also said Friday that the ceiling to issue special bonds will be raised to 35.52 trillion yuan ($4.96 billion) from 29.52 trillion yuan ($4.12 billion) for local governments.

Lan said that the implementation of such a large-scale replacement measure indicates a “fundamental shift” in China's approach to debt restructuring and said that China’s government debt risk was “controllable.”

Analysts have called for bold, multi-trillion-yuan measures to reinvigorate the world's second largest economy, which has yet to bounce back fully from the COVID-19 pandemic.
Local government debts have ballooned partly due to high spending and low tax revenues during the pandemic, but also due to a downturn in the property industry, since sales of land use rights, a key source of local government revenue, have sagged.

The central bank loosened restrictions on borrowing in late September, sparking a stock market rally, but economists say the government needs to do more to ignite a sustained recovery. Government officials have indicated that could come at this week's meeting of the Standing Committee of the National People's Congress, which must give official approval to any new spending.

The economy has shown signs of life in the past two months. Purchase subsidies offered to people who trade in old cars or appliances for new ones helped auto sales rebound in September. A survey of manufacturers turned positive in October after five straight months of decline, and exports surged 12.7% last month, the largest increase in more than two years.

For most of the year, the ruling Communist Party appeared more focused on addressing long-term structural issues with the economy rather than short-term ones. Previous steps to boost the economy were piecemeal, seemingly aimed at keeping the economy afloat rather than sparking a robust recovery.

In recent weeks, the party has signaled a growing concern about the economy's sluggishness as it tries to meet its goal of achieving growth of around 5% this year. The central bank's monetary easing was followed by government pronouncements that it still has ample funds to pump into the economy.

Still, the longer-term goals of transforming China into a high-tech and green energy economy seem likely to remain the chief aims of the Communist Party, which doesn't face election pressures like the ones that toppled the Democrats and swept Donald Trump's Republicans to power in America this week.