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Saudi Arabia has officially issued a new Government Tenders and Procurement Law, which will take effect 120 days following its publication in the Official Gazette. Replacing the existing legislation under Royal Decree No. M/128, the updated framework introduces comprehensive guidelines aimed at enhancing public spending efficiency, strengthening market transparency, and preventing unfair competitive practices across all state-funded projects. The new regulations enforce strict procurement practices, requiring state entities to buy only according to actual operational needs and fair pricing while considering lifecycle costs and risk management. Notably, the law emphasizes prioritizing qualified local service providers before engaging foreign entities and establishes clear mandates favoring local small and medium enterprises (SMEs), local content, and companies listed on the Saudi Exchange (Tadawul). This legislative shift is designed to retain capital within the Saudi economy and foster domestic business participation in major national projects. Investors and corporate traders will monitor the detailed implementing regulations to evaluate which listed sectors stand to gain the most from government contracting preferences.
