Saudi Arabia is serious about its Jan. 1 deadline for companies to move regional headquarters to Riyadh — or lose out on government contracts

RIYADH — Saudi Arabia is holding on to its ultimatum that foreign companies will need to base their regional headquarters in the kingdom or be barred from lucrative government contracts. The deadline: Jan. 1, 2024.

In a bold surprise move back in February 2021, the Saudi government announced that it would, by 2024, cease doing business with any international companies whose regional headquarters were not based within the country.

The news stunned investors and expat workers, many of whom saw the move as a shot at Dubai, the United Arab Emirates commercial capital that is home to the highest concentration of Middle East regional headquarters.

Faisal Al Ibrahim, Saudi minister of economy and planning, told CNBC that the plan is still going ahead and discussed how the kingdom aims to support foreign companies with the change.

When asked by CNBC’s Dan Murphy if the deadline is still in place, Al Ibrahim replied “Yes. And when you move, there are some benefits and some incentives that will make that make sense.”

The minister was speaking from Riyadh at the Future Investment Initiative, an annual three-day finance and investment conference hosted by Saudi Arabia’s Public Investment Fund and a brainchild of the Vision 2030 project.

“There’s a slew of incentives and benefits and support that’s always changing, always evolving, that are being discussed with these players as well,” Al Ibrahim said. “So it’s not just a negative reinforcement. There’s a lot of positive reinforcement as well.”

Vision 2030, an ambitious campaign launched by Crown Prince Mohammed bin Salman in 2016, aims to create private sector jobs and diversify its economy away from oil as as Saudi Arabia’s population — more than 60% of whom are under the age of 30 — booms. The kingdom’s regional HQ drive is a part of that.

When first announced, the HQ ultimatum engendered skepticism and…