How to bid for government tenders in Saudi Arabia.

Saudi Arabia at a glance

The law covers ministries, authorities, public institutions and other bodies with independent public legal personality. State-owned companies that are at least 51% government-owned follow their own procurement rules, aligned with the law’s principles and local-content priority. Saudi Arabia isn’t a party to the WTO Government Procurement Agreement.

Two laws: today and from 2027

The 2019 law (M/128) still governs every tender launched now. The Council of Ministers approved its replacement on 5 August 2026, and Royal Decree M/76 was published in the official gazette on 4 September 2026. The new law takes effect 120 days after publication, around the start of January 2027. New Implementing Regulations are due from the Ministry of Finance.

The decree’s transition rules matter if you’re mid-bid:

• Procurements tendered under the 2019 law continue under it. The Minister of Finance may apply some provisions of the new law to them, without disturbing steps already taken.
• Requests to extend contracts, and delays in existing cases, are handled under the new law.
• Local-content preference regulations (Council of Ministers Decisions 245 and 537) stay in force.

What the Ministry of Finance has confirmed about the new law:

• Direct purchase ceiling rises from SAR 100,000 to SAR 1 million;
• bid-opening and evaluation committees merge into one;
• limited tendering extends to independent professionals with specialised services;
• agencies must pay private-sector dues on time before taking on new commitments.

Reported by law firms and trade press, and pending the full text and the new regulations:

• the agency head’s delegation ceiling rising from SAR 10 million to SAR 50 million;
• Ministry of Finance pre-signing review cut from 15 to 4 working days;
• the change-order cap rising from 10% to 20%;
• a standstill of 3 to 10 working days;
• the performance-guarantee waiver rising to contracts below SAR 300,000.

Procedures and thresholds (2019 law)

• The agency head may delegate tender decisions up to SAR 10 million under the 2019 law.
• The Ministry of Finance reviews contracts before signature (15 working days under the 2019 law).
• An unusually low bid can be excluded only if it’s at least 25% below the estimated cost, and only after you’ve been asked to explain it in writing.

Foreign companies: what the law and the RHQ rule require

The law. Agencies may contract only licensed persons. Before contracting a foreign person for work or supplies inside the Kingdom, the agency must make sure that no more than one qualified local person is available (Article 3).

Registration. Bidding on Etimad requires a supplier account backed by a Saudi commercial registration (CR). Foreign companies usually get there in this order:

1. a MISA investment licence;
2. the CR;
3. Chamber of Commerce membership;
4. Zakat, tax and VAT registration with ZATCA;
5. GOSI registration;
6. a Saudi bank account.

We haven’t found an official Etimad route for foreign companies without a CR.

The regional-headquarters (RHQ) rule. Since 1 January 2024, government entities, authorities, institutions and funds may not contract a foreign company whose regional headquarters is outside Saudi Arabia. The exceptions:

• contracts up to SAR 1 million;
• the foreign bid is the only technically compliant bid;
• the foreign bid is at least 25% cheaper than the next-best bid;
• an exemption approved before tendering, requested through LCGPA’s service on Etimad (launched November 2025).

Practical routes for a foreign company:

• set up a Saudi entity, and an RHQ if you’re targeting contracts above SAR 1 million;
• bid jointly with a Saudi company, which the law allows;
• subcontract to a Saudi prime contractor, which needs written approval from the agency and the Ministry of Finance;
• for health-sector supplies, sell through NUPCO, the unified health procurement company, which runs its own supplier registration.

Saudization. A Saudi entity must also meet its Nitaqat quotas, and registration status is checked when you register and contract.

Registering and bidding on Etimad, step by step

1. Set up the legal basis: MISA licence, CR, Chamber, ZATCA, GOSI and a Saudi bank account; plus an RHQ licence if you need one.
2. Get classified if you’re a contractor. Works and many service categories need a contractor classification from the Ministry of Municipalities and Housing, issued through the Balady platform.
3. Register as a supplier on Etimad with your CR.
4. Watch for tenders and buy the tender documents. Fees are refunded if the tender is cancelled.
5. Check the local-content conditions in the documents: Mandatory List items, local-content baseline or target, and price preference.
6. Submit an encrypted bid on Etimad before the deadline, with the bid guarantee.
7. Keep your bid valid for 90 days from opening; the agency can ask to extend it by a further 90.
8. Watch the award and the standstill, during which you can appeal.
9. Within 15 working days of the award notice, post the 5% performance guarantee and sign. A construction contractor must be allowed to start within 60 days of the award notice.

Guarantees and payment

• Bid guarantee: 1% to 2% of the bid value; a bid without it is disqualified. It isn’t required for:
  • direct purchases and competitions;
  • deals between government bodies;
  • non-profits;
  • local SMEs.
• Performance guarantee: 5% of the contract value, due within 15 working days of the award notice. It isn’t required for contracts up to SAR 100,000 under the 2019 law.
• Who issues them: a Saudi bank, or a foreign bank through a Saudi bank.
• Prices: in SAR and inclusive of all taxes and fees, unless the Ministry of Finance approves another currency.
• Advance payments: allowed against a bank guarantee of the same amount.
• Change orders: up to +10% or −20% of the contract under the 2019 law.
• Delay penalties: capped at 6% for supply contracts and 20% for other contracts under the 2019 law.
• 2026 amendments to the Implementing Regulations: contract-signing deadlines were set, and payment schedules are now agreed at evaluation.

How bids are evaluated, and who gets preference

• Evaluation criteria must be in the tender documents. Non-price criteria have to be objective and measurable.
• Price negotiation is allowed with the best bidder if prices exceed the budget.
• Local content, administered by LCGPA:
  • national products get a 10% price preference: foreign products are evaluated as if they cost 10% more;
  • items on the Mandatory List must be bought from national producers, and a bid that doesn’t comply can be excluded;
  • designated tenders require local-content baselines, targets, plans and reports, with penalties for missing them;
  • LCGPA has announced additional preferences for some sectors (reported at up to 20%, for example in pharmaceuticals).
• Local SMEs need no bid guarantee and get priority in limited tenders and direct purchases. Saudi-listed companies also get a preference.

Challenging a decision

1. Appeal to the agency:
   • within 5 working days of a decision made before the award;
   • within the standstill period (5 to 10 working days) against the award itself. The agency has 15 working days to decide, and silence counts as rejection.
2. Escalate to the Ministry of Finance complaints committee within 3 days. You post a guarantee of half your bid guarantee, refunded if you win. The committee decides within 15 working days (extendable once), and its decisions bind the agency.
3. Go to the Board of Grievances (Administrative Court) for disputes with government entities. Sanctions decisions can be appealed there within 60 days.

A separate violations committee can ban a supplier for up to 5 years, downgrade its classification, or fine it up to 10% of the bid value.

What changed in 2025–2026

• November 2025: LCGPA launched the RHQ-exemption request service on Etimad.
• May–June 2026: amendments to the Implementing Regulations on contract-signing deadlines, payment schedules, final-payment holdbacks and termination.
• 5 August 2026: the Council of Ministers approved the new procurement law.
• 4 September 2026: Royal Decree M/76 was published; the new law takes effect around the start of January 2027.
• 25 September 2026: Ministry of Finance Decision 257 amended Article 113 of the Implementing Regulations.

Live Saudi tenders

See also which countries can bid on which government tenders.

Questions

Sources

• Government Tenders and Procurement Law, 2019 (official English translation)
• Royal Decree M/76 approving the new law (Umm al-Qura)
• Ministry of Finance: Cabinet approves the new procurement law (5 August 2026)
• Etimad
• Local Content and Government Procurement Authority (LCGPA)

This guide explains the rules in plain English; it isn’t legal advice. Procurement rules change, and each tender document sets its own conditions — it always prevails.