On February 15th, 2020  Saudi Arabia announced that by 2024 its government would cease doing business with any international companies whose regional headquarters were not based within the kingdom.

The policy, which comes into effect on January 1, 2024, is designed to encourage foreign firms to open a permanent, in-country regional presence that would help create local jobs, the SPA state news agency reported.

Khalid al-FALIH the Minister of Investment wrote on Twitter: “The decision … will reflect positively in the form of creating thousands of jobs for citizens, transferring expertise, and localizing knowledge, as it will contribute to developing local content and attracting more investments to the kingdom”.

Foreign companies have for years used the United Arab Emirates as a springboard for their regional operations, including for Saudi Arabia.

The Saudi policy will apply to government agencies, institutions, and funds, the source was quoted as saying, with new regulations to be issued this year.

Dubai in the UAE has firmly established itself as the regional business hub for everything from banking to transport and logistics. As part of attempts to open and diversify its economy, Saudi Arabia has though offered firms a package of incentives including tax breaks under a plan dubbed “Project HQ”.

SPA reported that 24 international firms including Deloitte, PwC, Bechtel, and PepsiCo said they were moving their regional headquarters to the kingdom at an annual investment conference organized by Saudi Arabia’s sovereign wealth fund in January.

Once it comes into effect, it would increase the efficiency of state spending, help keep capital within the country and guarantee the main goods and services purchased by the government were of local origin, SPA said.

Crown Prince Mohammed bin SALMAN, Saudi Arabia’s de-facto ruler has pledged to open up the kingdom and diversify its economy under a series of reforms since his father, the king, made him next in line to the throne in 2017.

This article was edited using the data from Aljazeera.com, Cnbc.com, Reuters.com, Livemint.com, Spa.gov.sa, and Ft.com