Boeing applied for a licence to establish its Middle Eastern headquarters in Riyadh as the Saudi government increasingly pressures businesses to boost their local presence.

The US commercial aircraft manufacturer lodged its formal application “a few days ago” and is working with the Ministry of Investment for approval, Asaad Aljomoai, president of Boeing Saudi Arabia, said at the World Defence Show in Riyadh.

Global firms had until Jan 1 to shift regional headquarters to Saudi Arabia from other parts of the Middle East, or risk being cut off from contracts with the government and missing out on lucrative deals with the kingdom.

It’s unclear how officials are going about enforcing the new rules since the deadline passed, or whether the government has started limiting contracts for those not in compliance. Companies that have received licences for a regional hub in Saudi Arabia in recent months include Airbus, Oracle and Pfizer.

Saudi Arabia announced the new HQ rules in 2021, saying it wanted to limit “economic leakage” – a term used by officials for state spending that can benefit firms that don’t have a substantial presence in the kingdom. The effort is also seen as a bid to increase competition with Dubai.

Boeing confirmed it currently has Middle East offices in Abu Dhabi, Dubai, Kuwait and Riyadh and said it’s unclear how those operations will be affected by any possible approval of a regional HQ in Saudi Arabia.

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Rolls-Royce Holdings said it’s currently working with the government to understand and meet the new requirements. Leonardo said it’s also applied for a regional headquarters. 

Other companies present at the World Defence Show suggested there’s still an element of confusion around the rules and how the regional headquarters should operate. BLOOMBERG