International Defense Contracting Update: Defense Market Entry for the Kingdom of Saudi Arabia

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DSEI UK (Defence and Security Equipment International) was held in London, England from September 9-12, 2025 at the Excel London. It is advertised as a “a pivotal event for the global defence industry. As the flagship defence event for the UK, DSEI UK promotes the UK’s defence ethos, agenda and leadership while encouraging opportunity and cooperation with our global allies.” This year’s event hosted over 40,000 attendees, 1600 exhibitors, over 90 countries and hundreds of Senior Defense Officials and VIP Delegations from around the world. The Excel London,  a 100 acre exhibition and conference center covering three levels, was divided into four specific defense domains: space, aerospace, land and sea. On the third floor of the center, special break out sessions were hosted by the UK Ministry of Defence targeting small and medium size enterprises (SMEs), the rough equivalent to the U.S. small business industry.

Vision 2030

On September 10, 2025, a special session , “Unlocking  Business in the Kingdom of Saudi Arabia,” was held in this sequestered third floor area of the Excel and was hosted by BAE Systems and the Kingdom of Saudi Arabia’s (KSA) General Authority for Military Industries (GAMI). H.E. Governor of GAMI, Ahmad Al-Ohali opened the event to a room filled with western defense businesses eager to understand how to set up shop in the Kingdom. GAMI was established by Royal Decree in 2017 as the Kingdom envisioned transforming its defense sector into a globally competitive and self-sufficient industry. According to H.E. Al-Ohali’s Power Point slides, GAMI’s mandate is “to achieve a localization rate of over 50% of the Kingdom’s total military spending by 2030.”

GAMI’s mandate is based on the Kingdom’s Vision 2030 launched in 2016 by the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Al Saud and His Royal Highness, Prince Mohammed bin Salman bin Abdulaziz, Crown Prince and Prime Minister of Saudi Arabia. Vision 2030 is a “blueprint” created to diversify the Saudi economy, empower its citizens, create a vibrant environment for both local and international investors as well as establish the Kingdom as a global leader. The Vision has three pillars: create a vibrant society where all citizens can thrive and pursue their passions;  create a thriving economy where everyone has an opportunity to succeed; and create an ambitious nation committed to efficiency and accountability at all levels. Vision 2030 is intended to progress in three five-year phases. Phase one would set the stage for implementing “structural and comprehensive reforms in the public sector, the economy, and society.” Phase two would see an acceleration of these reforms and further investment in key sectors and larger projects, and phase three would focus on sustainment of realized societal and economic transformations and leveraging new growth opportunities.

The Kingdom is now in its final phase of Vision 2030 - enter the KSA GAMI delegation at the DSEI UK conference making a strong push to fulfill its mandate under the Vision’s “thriving economy” pillar. GAMI’s mandate, under this pillar, is linked to unlocking the Kingdom’s non-oil sectors and then drills down more specifically to localizing 50% of the Kingdom’s military spending. So let’s unpack this mandate.

According to the GAMI delegation at DSEI UK, in 2024, Saudi Arabia’s military and defense sector budget was set at $68.9 billion, but total spending in 2023 was $76 billion.^[1] GAMI suggests that these spending levels places KSA 7^th globally in military expenditures on par with the UK’s annual defense expenditures but outpacing France, Germany, Israel and South Korea’s military spending respectively. Importantly, the Kingdom has the highest military spending of all nations in the Middle East and Africa making it a formidable ally in a political-military and geo-politically important region as it sits in the middle of three continents. The Kingdom can easily leverage its influence over allies when it comes to negotiating trade, energy and support during a conflict in the region. GAMI also claimed, for 2024, that it achieved 19.35% localization rate for military spending. This rate is below half of its mandated 50% with less than five years remaining until 2030. Based on this localization rate, GAMI estimated that it in turn contributed $1.36 billion to the KSA’s GDP. The Kingdom’s GDP stood at $1.24 trillion in 2024, so GAMI’s efforts resulted in just over a 1% contribution to GDP.^[2] This appears to be a lack luster return given what a nation’s economy can typically expect from its return on defense spending.[3]

Compare this to the numbers posted on the Vision’s 2024 Annual Report which beg the question, unanswered by this article, what is the Kingdom’s targeted effect for military spending on GDP especially if military spending comprises 7.1% of its GDP according to the Worl Bank.[4] Does the Kingdom expect its military investments to achieve only a 1% return on investment for its non-oil sector GDP or should a 50% localization rate on military spending result in a higher return on non-oil sector GDP? ^[5] Achieving this higher GDP return in the defense sector investment is correlated to higher returns for businesses seeking to enter the Saudi defense market especially with dual use solutions. This is something to consider in terms of whether the Saudi defense market can actually manifest the profit potential for international companies

Localization and International Normalization

The Kingdom has identified localization of industry as a key enabler of its GDP growth. So then what does Saudi localization actually mean? Localization (sometimes also referred to as Saudization) refers to several concepts embedded in both Saudi labor law and also in the Kingdom’s overall economic and investment policies. In its most simplistic form, the Nitaqat Mutawar Program is a state-sanctioned quota system that requires employers to prioritize hiring Saudi nationals over third country nationals and to hire Saudi nationals at a rate based on a calculation that takes into account the economic sector and the employer’s total workforce. The rate increases over time for an employer allowing it to slowly increase its hiring of Saudi nationals.^[6] Employers can request a temporary waiver from the Ministry of Human Resource and Social Development (HRSD) if hiring Saudi nationals proves especially challenging during an employer’s recruitment period. The Nitaqat Program was implemented in 2005 by Royal Decree. Historically, the Kingdom has welcomed large numbers of third country nationals who made up the majority of the Kingdom’s workforce.^[7] The Kingdom has been attempting to reverse this trend for two decades as it has led to stigma related to the Saudi work ethic (i.e., the lack thereof) and perhaps apathy within its younger populations.^[8]

Though the GAMI delegation at DSEI UK did not define what a 50% localization rate in military spending actually meant for foreign companies, it became clear throughout the panel’s presentations and during the question-and-answer session that this rate would be achieved in part by “Saudizing” foreign companies who are licensed to do business in the Kingdom. In other words, once licensed, a foreign company becomes a Saudi company and counts against the Kingdom’s localization laws. Bear in mind that companies (whether a true domestic or domesticated) will still need to calculate their Saudization labor rates and comply with the Nitaqat Program. Ostensibly, becoming a Saudi company would unlock additional subsidies reserved only for Saudi nationals and also bring these companies (and likely their employees) under the jurisdiction of the King and Islamic law. ^[9]/^[10] In a deeper sense, localization is a recasting of foreign entities who take on the corporate persona of a Saudi national and in the process must co-opt the mandates of the Kingdom’s social and economic reforms. These newly domesticated foreign companies are now integral to how Saudi will grow and transform its defense industrial base.^[11]

And in some ways broadening localization by co-opting foreign companies and requiring them be the horses that drive Saudi’ economic reform seems a necessary albeit difficult feat. The Kingdom has come to terms with its need to attract global talent, investment and innovation in order to achieve the vision it has for a future state. This reckoning has led to this renaissance of sorts and rapprochement toward international norms.^[12] The following laws highlight the Kingdom’s very real steps towards adopting international norms in investment, corporate law, real estate and government procurement.

1. New Companies Law (Royal Decree No. M/132 of 2022)

The New Companies Law overhauls how the KSA approaches corporate structuring by allowing now for example: single shareholders, no minimum capital requirements, no mandatory reserve requirements and broader share classes.

2. New Investment Law (Royal Decree No. M/19 of 2024)

This law and its implementing regulations aim to facilitate the diversification of the Kingdom’s economy by attracting more global investment. They were designed based on benchmark studies and international standards. The Ministry of Investment lists eight principles around which the new framework was built.

1. Transparency and clarity;
2. Easing regulatory restrictions;
3. Promoting equal treatment between the domestic and foreign investors under similar circumstances;
4. Grant of investment incentives;
5. Promoting investors’ rights - Reemphasize investor basic rights, such as protection from expropriation without fair compensation, fair and equitable treatment, protection of intellectual property and confidential commercial information, freedom to manage his investment and make legal disposal thereof, freedom to transfer his funds inside and outside the Kingdom without delay, facilitating his administrative procedures, and providing statistical information and data;
6. Fair competition: Enhance the principle of fair competition principle by way of ensuring the public sector non-competition to the private sector;
7. Means of effective dispute resolution: The right to seek arbitration, mediation and reconciliation in addition to the right to seek recourse at competent courts;
8. Streamline procedures and enhance investment governance.^[13]

3. New Law on Foreign Ownership of Real Estate (Royal Decree No. M/149 of 2025)

This new law was just passed and will take effect in January 2026. It is a massive shift in the Kingdom’s real property rights’ posture. It allows non-Saudis to now own all types of real estate in the Kingdom: Individuals (resident and non-resident), foreign companies, non-profit foreign entities, diplomatic missions as well as Saudi companies comprised of foreign shareholders may now own residential, commercial, industrial and land in the Kingdom.

4. Executive Regulations of the Government Tenders and Procurement Law (pursuant to Royal Decree No. M/128 of 2019)

These regulations implement the Government Tenders and Procurement Law (GTPL). ^[14] This law in general seeks to: prevent abuses of power and protect public funds from conflicts of interest; achieve optimal value at fair and competitive prices for public contracts; promote integrity, competition, fairness and equal opportunity for bidders; maintain transparency throughout the procurement process; and foster economic growth and development.

These regulations were issued by a Ministers' Council Decision and are designed to complement the main GTPL (Royal Decree No. M/128 of 2019) and its implementing regulations. They represent a significant move to enhance transparency, accountability, and fairness in government procurement, which is a key part of Vision 2030's anti-corruption drive.

Opportunities and Market Entry Considerations

So in addition to the legal reforms in investment, procurement and real estate, the GAMI delegation identified high need areas within the military sector based on five and ten year plans from the Ministries of Defense, Interior and National Guard – the KSA’s three military departments. Both future and current targeted capabilities are in: aerospace manufacturing, assembly and integration; sustainment for avionics, airframes, mechanical systems and propulsion; additive manufacturing; predictive maintenance and ground support equipment; drones integrated squadrons; AI and autonomous driving vehicles; advanced communications systems; thermal radar stealth technology; advanced engines; and integrated sensor systems.^[15]

GAMI further gave the impression that registering to do business in the Kingdom is a “snap.” Its website offers just five steps to take if a business wants to either manufacture military equipment, provide military services or trade military articles in the KSA: 1) issue a commercial register via the Ministry of Commerce’s website; 2) obtain a license via the Ministry of Investment website; 3) register on the unified military industries platform and meet requirements; 4) secure a location after meeting military licensing requirements; and 5) obtain a military license from GAMI. Investors can express interest in GAMI’s Investment Opportunities, before completing the steps above, by providing their company’s information on the website under the opportunity that best aligns with its capabilities.^[16] GAMI gave every indication that its office would facilitate a foreign investor’s entry into the Saudi defense sector. It, more specifically, encouraged the audience at DSEI to attend the World Defense Show in 2026 where a contingent of its officials will be dedicated during the forum to assist investors with this registration process.

Despite the legislative reforms and obvious gains the Kingdom has made towards achieving the reforms under Vision 2030, weigh the following considerations before setting up shop in the Kingdom.

Oil

Saudi Arabia’s GDP remains heavily reliant on its oil revenue.^[17] If oil prices plummet, so goes the Saudi reforms; projects are cancelled; workers are laid off; contracts go unfunded; investments in other sectors shrink. There is an inherent ironic tragedy of untethering the second largest oil producing economy from its main source of revenue - successful untethering depends on the shackle itself remaining strong. Pay close attention to how the Kingdom responds to changes in the oil markets as this will help time entry into the Saudi defense sector.^[18]

Western Employees in an Islamic State

This update says very little about labor and employment reforms for foreign employees - you know those folks who will likely accompany the foreign company if it relocates to the Kingdom. Foreign companies are obviously not faceless entities; they are staffed and managed by individuals who have families and friends and lives outside of work. These employees will carry with them behaviors, norms and values foreign to and often at odds with the Islamic state.  This is less about cultural sensitivity and more about understanding whether social reforms under Vision 2030 will bridge the difference in cultures that the once closed Kingdom will be forced to cross as its economy and society diversify. In other words, the western influx into the Kingdom will likely lead to frustration for foreign staff, violations of Islamic norms and subsequent civil and/or criminal proceedings under Islamic law. Foreign companies must understand the legal consequences, in light of civil and criminal reforms, for foreign staff who relocate to the Kingdom and violate criminal or civil laws outside as well as within the scope of their employment. Companies must have access to and then hire foreign employees who are adept at conceding some of their own western privileges (like drinking or possessing alcohol, having access to pork products or wearing “immodest” clothing). Having foreign staff in the Kingdom who cannot adapt to the Kingdom’s different cultural landscape will prove detrimental for business. Companies need to ensure that legal protections are in place for staff and their families in the event of civil or criminal violations.

Procurement Regime Nascency

There are several noteworthy articles in the new Government Tenders and Procurement Law (GTPL) and its corresponding regulations that should be scrutinized before deciding to participate in the Saudi procurement process. The GTPL applies for foreign companies who have dual use solutions available for use within the civil and military sectors of the Kingdom.

Direct Purchase (Sole Sourcing) – Articles 44-48 of the GTPL Regulations reveal a broad discretionary regime for sole-sourcing procurements.^[19] By way of example, check out the Etimad site for its advertised competitions. The type of competition is listed in the upper left corner of the grid containing the solicitation. There is a disproportionate number of solicitations identified as a “direct purchase.” There are no linked Justifications and Approvals posted or other rationale indicating why these requirements needed to be sole sourced. See requirements by way of comparison at U.S. Federal Acquisition Regulation (FAR) Part 6 generally at Part 6.303-1 specifically. Appeals to direct purchases could be handled under Article 86 of the GTPL, but there is little documentation available to contest such award decisions. Also, procedures from protesters are very difficult to find at this juncture. It seems awards under this contract type would be justified under the broad discretion Ministries are afforded under the GTPL and its regulations. The regulations require an annual publishing by Ministry of all of its direct procurements, but what follows when this annual publishing reveals an overuse of direct purchasing discretion?

Bid Protests - The GTPL at Articles 53, 86 and 87 and its regulations at Chapter 10, Standstill Period, Article 87 outline the bid protest regime. The Ministry announcing and issuing its award decision is required to “standstill” for no less than five days and no more than 10 days after its award announcement is posted on the e-portal (Etimad). During the standstill period, the cognizant Ministry will receive complaints regarding its award decision and its procedures. The award decision is not effective until after the standstill period expires and any complaints are settled. The GTPL further provides at Article 87 that the cognizant Ministry has 15 working days to decide on the protest issues and no decision by that Ministry is considered a deemed denial of the protest. (at Art. 87(2)) Complainants then have three days from the date of being notified of the denial or from the deemed denial date to appeal to the Ministry of Finance’s Committee that reviews bidder’s and contractor’s grievances. (id. at (3)) This committee has an additional 15 days to resolve the issues and may extend this period for an additional 15 days. (id. at (4)). At the writing of this article, searching and reviewing bid protest decisions or procedures was not apparent.^[20] The nascency of the bid protest regime leaves room for a great deal of discretion for Saudi Ministries and the p.  And until protest decisions are published and precedent is followed, this creates a high level of risk and uncertainty among bidders. Is there any actual recourse for awards that violate the GTPL? How will Ministries rule when hearing ministry-level protests? How will the Ministry of Finance rule when hearing appeals? What body of protest law will result, and will the Ministries actually follow their own precedent? This procedural and precedential void can certainly chill industry participation in the Kingdom’s tender process until these questions have answers that reveal a transparent and equitable protest regime.

Contract Disputes - Section IV, Chapter 1, Settlement of Complaints and Final Provisions, at Articles 153-155 of the regulations and at Article 92 of the GTPL describe the contract disputes regime. Arbitration is only allowed for contracts whose estimated value exceeds 100 million SAR (Approximately $26.6 million USD). The arbitration terms and conditions are available in the individual contract documents. Arbitration will be held before a panel inside the Kingdom for all domestic contractors. Arbitration before an international panel is permissible only for foreign persons. Regardless of the national identity of the complainant and the place of arbitration, the Kingdom’s laws will apply to the subject matter of the dispute. For disputes with contracts valued at less than 100 million SAR, the complainant and the Ministry may first try to settle the dispute “amicably.” If amicability fails, then the contractor is brought before an ad hoc dispute resolution body (DSB) appointed by the requirements owner and comprised of three individuals: a representative from the Ministry, a representative from the complaining contractor and a chairperson from either the private sector or from the Ministry. The DSB receives payment for settling the dispute which is born by the Ministry, but the contractor and the Ministry involved share the cost of hiring experts who may provide evidence to the DSB. The DSB must settle the dispute within 30 days. The parties may rebut the decision in a written opinion to the DSB. The DSB then has 15 days to issue a decision which shall be final and enforceable. However, both parties have the right to appeal this final decision to the appropriate judicial authority in the Kingdom.^[21] This section only applies to disputes related to the technical aspects of the awarded contract. Again, the nascency of this regime carries the same risks as the newly created bid protest regime; bidders bear the burden of entering this procedural and precedential void and must hope that the administrative bodies develop a sound body of law whose precedent is followed. The uncertainty of this can have a chilling effect on industry participation until these systems and processes consolidate and mature.

Contract Interpretation, Provisions and Clauses – While they are sure to exist, however, at the writing of this article, the only sample contract provisions and clauses available are at the Etimad site. Only one sample was available for download (and in Arabic), and no other provisions or contract clauses appear to be publicly available. Finally, the GTPL at Article 55 states that all contracts will be drafted in Arabic. Translations are allowed, but the parties agree to use Arabic for contract interpretation and execution.

GAMI’s Regime – Recall that the GTPL regulations afford GAMI control over its own procurements and outside the purview of the Unified Procurement Agency. (at Art. 14). The GTPL also sets aside direct purchase authority for GAMI and its procurements of weapons, military equipment and spare parts. (at Art. 32)^[22] The regulations go on to stipulate that GAMI will issue the rules that organize the works and missions under both of the above GTPL articles. (at Regulations Article 157) GAMI’s acquisition policies and processes differ greatly from the GTPL as they focus on how industry will bring solutions to develop the Kingdom’s military sector. The Industrial Participation Policy outlines a co-creation of requirements between GAMI and the industry partner. This policy requires that industry make a substantial commitment to localization and developing capabilities within the Kingdom. While having an opportunity to develop requirements (in fact a Kingdom’s defense industrial sector) in collaboration with military departments is exceedingly rare, GAMI asks in return that industry adopt Vision 2030 as its own - that foreign industries become the drivers themselves of the Kingdom’s economic and social reforms.  A successful collaboration appears to result in a direct purchase contract for the industry partner, but it is unclear whether these are protestable under the GTPL regulations. Industry must have a thorough understanding of what this co-dependency means for its corporate bottom line. Bidding for military opportunities are only on the GAMI Investment Opportunities page, and it is very sparse.

Islamic Capitalism^[23] Meet Western Capitalism

For those unfamiliar with the Islamic law on trade and commerce, compare the following Islamic tenets to general knowledge about western capitalism: prohibition of interest^[24] and speculation;^[25] the enforcement of Shari’ah-compliant profit–loss and sharing;^[26] and the enforcement of wealth redistribution.^[27] This article cannot do justice to how complex the endeavor of pulling off Vision 2030 actually is. But something strikes hard at the economic senses when the actual seat of Islam decides to transform its economy and open it up to a world replete with western capitalists. Reflect, for example, on answers to these more nuanced questions when conducting a market entry analysis. What economic world does the Custodian of the Two Holy Mosques preside over when financial theories collide in the seat of Islam? Could the world see a new age of Islamic Capitalism that not only benefits Saudi nationals, but also benefits those foreigners willing to risk the uncertainty of oil prices, the nascency of Saudi procurement rules and the discretion of effectively two ruling monarchs?^[28] Will Islamic capitalism influence the western capitalists in this endeavor or will the western capitalists overly influence the Kingdom? What barriers would prevent the two economic theories from meeting in the middle where all can benefit from the Islamic tenets of low interest rates, greater risk and profit sharing and a more equal distribution of wealth? While there may be no readily available answers to these questions, the answers will begin to reveal themselves in short order as the Saudi’s vision becomes a willing foreign company’s economic reality.

[1] The World Bank has KSA’s military expenditure at 7.1% of its gross domestic product for 2023. For a bit of context, the United States’ military expenditure, as a percentage of GDP, was at 3.4% for the 2023.
[2] This article assumes that both World Bank and the KSA have used the expenditure approach in calculating the Kingdom’s GDP. The International Monetary Fund defines gross domestic product (GDP) as: “Total income earned through the production of goods and services in an economic territory during an accounting period. It can be measured in three different ways: using either the expenditure approach, the income approach, or the production approach…Expenditure approach - Total final expenditure on goods and services produced in an economic territory during an accounting period.” [emphasis added] The Saudi General Authority for Statistics (GASTAT) defines GDP as: “G.D.P (at market prices) - ... In expenditure approach, it is the sum of final expenditure at purchasers' prices minus all imports valued at the delivered prices on the vessels.” [emphasis added] The GASTAT calculates GDP under the expenditure approach using the following equation: GDP (E) = private final consumption expenditure + government final consumption expenditure + gross fixed capital formation + change in inventories + exports of goods and services - Imports of goods and services. By way of comparison, the U.S. Bureau of Economic Analysis calculates GDP using a four part formula - C + I + G + NX = GDP : “Personal Consumption Expenditures Also called consumer spending: the goods and services people buy, such as groceries, clothing, cellphone service and health care. + Investment This is business spending on fixed assets such as land, buildings and equipment, plus investment in unsold inventory; also includes purchases of homes by consumers. +Government Spending Spending by federal, state and local governments to provide goods and services, such as schools, roads or national defense. + Net EXports Also known as exports minus imports (X – M): the value of exports to other countries minus the value of imports into the United States. Why are imports subtracted? Consumers, businesses and governments spend some of their money on imports. U.S. production would be overstated if the formula didn’t remove imports. = GDP The total market value of the goods and services produced within the United States in a year.”
[3] While this article does not question the macro-economic analysis likely conducted by the Kingdom’s General Authority for Statistics, the Rand Corporation’s Research Report, How Does Defense Spending Effect Economic Growth?, compares defense and peace economics literature and applied macro-economics literature to reach the conclusion, though with some conflicting results, that “the results of macroeconomic studies examining the effect of defense spending on growth are captured by a multiplier. A multiplier measures how much economic growth $1 of defense spending produces in the economy over a specified period of time. For example, if, over a five-year time horizon, a $1 spending increase leads to a $1 increase in GDP, this would return a multiplier of 1—i.e., a 1-to-1 increase.” (at p. 5 [para. 4]. The report finds that scholars generally agree on a multiplier between 0.6 and 1.2 in terms of defense spending’s anticipated effect on GDP. That is for every dollar increase in defense spending a country can expect that increase to lead to between a $0.60 and $1.20 increase in GDP. (at p. 6 [para. 1].  (Bryan Rooney, Grant Johnson & Miranda Priebe, How Does Defense Spending Effect Economic Growth?, Rand Corporation 2021, http://www.rand.org/t/RRA739-2).
[4] See, Vision 2030 Annual Report 2024 beginning at pdf pg. 40.
[5] The Vision 2030’s 2024 Annual Report baselines (presumably beginning in 2016 at the start of the Vision 2030 campaign) non-oil sector GDP at $534.27 billion. Non-oil sector GDP has now reached over $697 billion in 2024 with a target to reach $1.3 trillion by 2030. It is worth noting that the World Bank has total (including oil and non-oil sectors) Saudi GDP at $1.24 trillion in 2024. There is an assumption that the Kingdom would increase GDP in these non-oil sectors while also maintaining the GDP rate in its oil sector which stood at 22.3% of GDP in 2024.
[6] The Saudization rate calculation is actually more complicated and follows: y = m * ln(x) + c; “’y’ is the minimum Saudization of the range.; ‘m’ is the gradient of the curve and differs by economic activity (Annex No. 1); ‘c’ is the y-axis intercept of the curve and differs by economic activity and year (Annex. No. 1). The third-year value will be used in the third year and beyond; ‘x’ is the total workforce in the entity; ‘ln(x)’ calculates the natural logarithmic value of the total labor.” (See, Procedural Guideline: Nitaqat Mutawar Program Version 2 at p. 6)
[7] Peruse Gulf Labour Markets and Migration to get a snap shot of these trends not only in Saudi but also in other Gulf countries. There have been years where Saudi nationals and foreign nationals equally made up the Kingdom’s population and where the unemployment rate was at times seven times higher among the Saudi men than among foreign national men and 33 times higher among the women respectively.
[8] The Social Protection the Kingdom provides to its citizens may be an enabler of this apathy as it affords generous social programs that are not necessarily tied to income or need.
[9] The GAMI delegation delighted in revealing to the audience that preferred treatment as a Saudi company is now an option for foreign companies despite the obvious challenges of being under Islamic law for criminal and civil procedures. Disputes involving a Saudi Ministry would fall under the Board of Grievances whose reforms have it adhering more to international norms. The board is nonetheless inextricably bound to Islamic law in that none of its procedures or rulings could violate Islamic law. Also, in order to serve as a judge on the Board, one must be trained under Sharia’ah law. The Kingdom’s Embassy website provides an overview of Saudi system of government as well as its legal and judicial structure.  “Since Saudi Arabia is an Islamic state, its judicial system is based on Islamic law (Shari’ah) for both criminal and civil cases. At the top of the legal system is the King, who acts as the final court of appeal and as a source of pardon. The Saudi court system consists of three main parts. The largest is the Shari’ah Courts, which hear most cases in the Saudi legal system. The Shari’ah courts are organized into several categories: Courts of the First Instance (Summary and General Courts), Courts of Cassation and the Supreme Judicial Council. Supplementing the Shari’ah courts is the Board of Grievances, which hears cases that involve the government. The third part of the Saudi court system consists of various committees within government ministries that address specific disputes, such as labor issues… Shari’ah refers to the body of Islamic law. It serves as a guideline for all legal matters in Saudi Arabia. In the Shari’ah, and therefore in Saudi Arabia, there is no difference between the sacred and the secular aspects of society. Muslims derive Shari’ah law primarily from the Holy Qur’an and secondarily from the Sunnah, the practices and sayings of the Prophet Muhammad during his lifetime. The third source is Ijma’, the consensus of opinion of Muslim scholars on the principles involved in a specific case occurring after the death of the Prophet. Qias, analogy, is the fourth source of law. Shari’ah presumes that a defendant is innocent until proven guilty, and only in serious crimes or in cases of repeat offenders is one likely to witness severe punishments.” [emphasis added]
[10] Do note that the Kingdom’s legal and judicial system have strategic objectives as well that align with Vision 2030. The Ministry of Justice strives to: promote swift justice, enhance real estate security, improve legal notarization, develop judicial assets and stemming the influx of lawsuits. Developing judicial assets objective entails in part: “Raising and highlighting the judiciary’s rating locally and globally…This objective is concerned with raising the Kingdom's global ranking in the contract enforcement sub-index; highlighting the advantages of the Saudi justice system; and disseminating legal culture, which would help enhance satisfaction with legal services; in addition to raising the Kingdom's global ranking in various judicial aspects, activating agreements with international institutions, and raising awareness of legal rights and processes in Saudi society… A. Highlighting the advantages and achievements of the Saudi judiciary and disseminating legal culture. B. Raising the Kingdom's global rating.” See also, the Board of Grievances’ (BOG - the irony of this acronym for English speakers is unfortunate) Strategic Plan FAQs. See also, Saudi Judicial System Profile noting that “Saudi judges [in the Shari’ah Courts] have wide discretion in deciding cases. Most court decisions are not published, and there is no common-law concept of precedent. However, the government recently has begun to publish books of legal principles and procedure to enhance consistency in judicial decision making.” [emphasis added]
[11] This is apparent in GAMI’s The Industrial Participation Policy.
[12] In addition to elaborating on the benefits associated with registering as a Saudi company, the GAMI delegation also offered up the following incentives for foreign investors: zero value added tax; ready built infrastructure for factories; human capital support; facilitation with the import and export of military items; financial support for military projects; export credit financing guarantees and insurance; employment funding; customs duty exemptions; ecosystem stimulus for small and medium size enterprises; and financial incentives for research and development. This list is not exhaustive based on the delegation’s Power Point presentation. These incentives are based on a series of new laws, royal decrees and regulations the Kingdom has adopted in the past several years to improve foreign investors’ accessibility to its markets.
[13] Additional related laws can be found at the Saudi Ministry of Commerce’s website and the Ministry of Investment’s website.
[14] The GTPL also required implementation of regulations on: Conflict of Interests when Implementing the Government Tenders and Procurement Law and its Implementing Regulations (ROCOI); Code of Ethics and Professional Conduct in Implementing the Government Tenders and Procurement Law and its Regulations (ROCOE); and Preference for Local Content and Local SMEs and Companies Listed on the Capital Market in Business and Procurement Transactions (ROPL).
[15] The Ministry of Investment also presented during the GAMI panel discussion and highlighted ten additional untapped market opportunities in its defense sector: defense electronics; conventional ammunition and weapons; guided missiles, munitions and rockets; UAV platforms and structural components; UAV maintenance, repair and overhaul (MRO); MRO and spare parts for fixed-wing aircraft; systems and structural components of land systems; MRO and spare parts for land systems; systems and structural components of naval systems; MRO and spare parts for naval systems.
[16] At the writing of this article, this site appears to be the only public source for accessing solicitations related to the KSA’s requirements for defense articles and services. (GTPL at Article 32(1)) For non-military solicitations, referred to as “tenders,” the Kingdom has a new procurement platform - Etimad. The GTPL requires all Ministries to announce its procurements on this e-portal except: “The works and procurements related to the national security, weapons, and military equipment shall be excluded from publishing.” (GTPL Regulations at Art. 3).
[17] Oil rents in 2023 still comprised almost a quarter of the Kingdom’s GDP.
[18] See for example World Finance article, “Saudi cuts spark global ripples,” August 29, 2025.
[19] ”Where the Government Authority wishes to procure the works and procurements which are only available at one supplier, contractor, or producer, it shall observe the following: 1. It is necessary to procure the works and procurements and there is no appropriate alternative that can be secured from other sources; 2. Announcement shall be published on the E-Portal and the website of the Government Authority, which term may not be less than ten (10) working days, to make sure that the works and procurements are only available at one contractor, producer or supplier. The Government Authority shall also verify the same through other official sources and the databases and information available at other authorities.” (at Art. 44)
[20] The GTPL requires the Ministry of Finance to publish additional regulations concerning its bid protest procedures. Again, at the writing of this article no additional procedures for the Committee or protesters were immediately available. (See, Art. 86(1)).
[21] The Board of Grievances has jurisdiction to hear appeals from the dispute resolution body’s decisions.
[22] On GAMI’s Suppliers Portal, it lists oddly procurements screened from Etimad that seem military-related. They were all awarded on a sole-source basis. This portal does not lead to supplier tenders posted by GAMI.
[23] Islamic Finance: “Islamic banking is a financial system that adheres to the principles of Sharia law. Islamic banking prohibits the use of interest, speculation, and excessive risk. It emphasizes profit and loss sharing, fairness, honesty, and transparency in financial dealings. Islamic banking, or Islamic finance, strives to remove harm from financial transactions. Both Muslims and non-Muslims can participate in Islamic banking and benefit from its principles.”
[24] Riba.
[25] Gharar.
[26] Murabaha.
[27] Zakat; Waqf.
[28] See, Islamic and capitalist economies: Comparison using econophysics models of wealth exchange and redistribution. Takeshi Kato, September 22, 2022. The author applies new econo-physics models to quantitatively show that, “in the Islamic economy, disparity is restrained by prohibiting riba and promoting reciprocal exchange in mudaraba and redistribution through waqf. Comparing Islamic and capitalist economies provides insights into the benefits of economically embracing the ethical practice of mutual aid and suggests guidelines for an alternative to capitalism.”