Offset and localisation, country by country: Saudi Arabia, the UAE, Qatar, Kuwait, Jordan and Egypt

One regional strategy is the mistake

Companies entering this region routinely build a single localisation plan and carry it from capital to capital. It is an understandable simplification and it does not survive contact with any of these markets, because the differences are not differences of degree. They are differences of kind.

In one country the obligation is a published percentage of contract value, discharged in credits, with a defined threshold and a performance security attached. In another there is a scored certificate belonging to a legal entity, sitting alongside a separate contractual offset regime. In a third a government in-country value programme and an energy-sector one share a name and are constantly confused. In a fourth the offset programme everyone still refers to has been suspended since 2015, while the local-content rules that remain are frequently overlooked. In two more the lever is not offset at all but a price preference, and in one of those it moved this year.

What follows is what each of these is, as at August 2026, with the mechanism named so it can be checked. All of them are subject to revision. Start with applicable law and regulation and any controlling international or government-to-government instrument, then identify binding policy and buyer-specific rules. The tender documents govern the competition; the executed contract, including whatever tender documents it incorporates and its own order-of-precedence clause, governs performance. Nothing here overrides any of that.

Saudi Arabia — the most explicit rules in the region

Saudi Arabia publishes what most of the others do not. The General Authority for Military Industries operates an Industrial Participation Policy that states its own thresholds and percentages.

It applies to supply contracts placed by military and security entities for military goods and services with a value at or above SAR 150 million, including all amendments, and it applies whether the contractor is a foreign or a local company. The level of commitment is set at a minimum of sixty per cent of the total amount payable to the contractor under the supply contract.

That sixty per cent figure is the one most often misread, and the misreading is expensive in both directions. It is an Industrial Participation Commitment measured in credits, not a requirement to spend sixty per cent of the contract value inside the Kingdom. Credits are earned across categories covering localisation of work with local companies, capability development, and direct investment or transfer, and capability-development activity carries valuation factors that can multiply the credit awarded well above the cash deployed. GAMI determines eligibility and valuation. So a bidder can calculate the base commitment from the published rule, but not its final size — GAMI can adjust the supply contract value, for instance by removing scope not directly related to military procurement, and sixty per cent is stated as a minimum — nor the actual cost of discharging it — that depends on the mix of activities and the valuations GAMI applies to them.

Three features are easy to miss. The policy applies to qualifying contracts delivered on a government-to-government basis, with the contractor required to sign an Industrial Participation Agreement with GAMI, so a foreign military sale route does not avoid it. GAMI may at its discretion apply the policy below the SAR 150 million threshold, including to a series of related contracts that individually fall below it. And the commitment applies to qualifying contracts whether or not it was expressly stated in the request for proposals.

There is an incentive structure on top: bonus credits of ten per cent of the industrial participation commitment where the contractor achieves at least thirty per cent localisation in delivering it, bankable against future obligations. Performance security is set at ten per cent of the supply contract value.

All of this sits under a national target to localise more than half of military equipment and services spending by 2030. GAMI reported that localisation of military spending reached 24.89 per cent at the end of 2024.

The UAE — two mechanisms, and they are not alternatives

The UAE runs two things that both get called "localisation", and they work differently.

The first is the National In-Country Value programme, administered by the Ministry of Industry and Advanced Technology. It certifies a specific legal entity with a score built from that entity's audited accounts and supporting records, and the score earns advantage at award. In federal government procurement the Ministry of Finance describes an evaluation framework allocating up to 25 per cent of the total score to certified ICV suppliers, across the federal entities in scope. That figure comes from the federal evaluation framework and procurement manual rather than from the procurement law itself, which permits a preferential margin and leaves the mechanics to be set below it. It is a scoring advantage rather than a contractual obligation.

The second is the Tawazun Economic Program, under which qualifying defence supply contracts generate obligations discharged by earning credits through approved project routes. That is a contractual obligation attached to the award, and a different animal from a scoring preference.

There is a further point specific to defence. Federal Law No. 11 of 2023 on Procurement in the Federal Government excludes the Ministry of Defence and the Armed Forces from its scope under Article 4, along with the UAE security authorities. Procurements of a military or security nature by the Ministry of Interior or another security or military federal entity are excluded where approved by the relevant Minister or entity head. A defence-related purchase by an ordinary civilian federal entity can still fall inside the law.

The mistake to avoid is treating these as a menu. Falling outside the federal procurement law does not by itself mean ICV considerations disappear, since they can be imposed through other policy or through the tender itself. The question to answer for a specific opportunity is not which mechanism applies but whether each of them does.

Qatar — two in-country value programmes, and the wrong one gets quoted

Qatar is where confident advice most often goes wrong, because there are two in-country value programmes and they are routinely conflated.

Tawteen is QatarEnergy's in-country value programme, built around supplier development and an ICV policy in the energy supply chain, where the ICV score gives an advantage at commercial evaluation. It is real and substantial, and it is not the framework for selling into government generally.

Separately, the Qatar In-Country Value programme sits under the Ministry of Finance as a pillar of its TAHFEEZ programme, and has been applied to government tendering since 2022. It works through an ICV certificate below a published contract-value line, and at or above QAR 500 million a forward-looking ICV plan submitted with the tender as a commitment to be met during execution, with stated exclusions and particular treatment for framework and divisible contracts. A company quoting Tawteen requirements in a government procurement context has matched a keyword rather than understood the market — and the reverse error is equally available.

For defence specifically, Barzan Holdings is a central channel: the strategic investment and procurement arm of the Ministry of Defence, working through joint ventures, direct investment and technology transfer. It is not the only one, and the Qatari Armed Forces maintain their own procurement authority that contracts with suppliers directly.

What we have not found is a published Barzan or Ministry of Defence document setting numerical offset thresholds, minimum local-content percentages or defence-specific ICV weightings. There is also a scope limit worth knowing: Qatar's tender law carves out confidential contracts of the armed forces, police and other military authorities, so QICV cannot be assumed to govern a defence acquisition simply because it governs ordinary government tendering. Where the defence-specific numbers are not published, the shape of the industrial offer may be specified confidentially by the procuring authority or established in negotiation — either way the credibility of what you propose to build locally carries more weight rather than less.

Kuwait — the offset programme is suspended, the local-content rules are not

Kuwait ran a well-known offset programme from 1992, unusual in the region for applying to civil government contracts as well as military ones, with a multiplier system for earning credits against the obligation.

New government contracts were removed from the programme in July 2014, and the Council of Ministers permanently suspended it in 2015. Responsibility for outstanding obligations passed to the Kuwait Direct Investment Promotion Authority, which still administers that legacy portfolio and reports on legacy projects. The precise word matters: the programme is permanently suspended rather than wound up, and companies carrying obligations incurred before the 2014 halt remain inside it and should be dealing with KDIPA directly.

For new business, no offset obligation arises, and a proposal built around offering Kuwaiti offset credits is working from a brief roughly a decade out of date.

The more common error, though, is the opposite one: concluding that Kuwait therefore has no local-content requirements. It does. For procurements governed by the Public Tenders Law, national-product, local-purchasing and subcontracting rules remain live. Military materials for defence, interior and national guard, and contracting for military installations, follow specialised procedures outside the ordinary route, so the regime applying to a specific acquisition has to be checked rather than assumed. "Offset" and "local content" are not synonyms, and in Kuwait treating them as such produces exactly the wrong plan.

Jordan — price preference, and industrial participation by negotiation

We have not identified a published, codified defence offset regime in Jordan comparable to Saudi Arabia's, as at August 2026. There is no published percentage of contract value to plan an offset obligation against.

There is, however, a formal and recently strengthened lever. In June 2026 the Jordanian Cabinet raised the price preference granted to national industrial products in government tenders from fifteen to twenty per cent. It means a technically compliant Jordanian product can be preferred even when priced up to twenty per cent above an imported alternative; it is not a requirement to localise twenty per cent of anything, and the Cabinet allowed justified exceptions where applying it is impractical or where technical or operational reasons argue against it. That is not an offset regime, but it means local production can carry a defined procurement advantage rather than functioning only as a negotiated goodwill gesture.

Alongside that sits a substantial history of industrial partnership negotiated case by case, frequently taking the form of joint production or local assembly involving the Jordanian defence industrial institutions. Willingness to build something locally works as a competitive differentiator on top of, not instead of, the formal preference.

On process, Jordan's government procurement framework was reworked in 2022 and includes provision for armed forces and security service procurement, and the Jordan Armed Forces operate a dedicated defence procurement directorate. So there is a defence-specific route, but it is not accurate to say the general framework is simply irrelevant. Establish which applies to the specific opportunity.

Egypt — a price preference tied to a local-content test

Egypt works through the same broad lever as Jordan, and it is worth understanding precisely because it is frequently described wrongly.

Public contracting is governed by Public Contracts Law No. 182 of 2018 and its executive regulations, issued by Ministry of Finance decision in 2019, which replaced the older procurement law and set out the contracting methods, evaluation rules and award mechanisms. Sitting alongside it, Law No. 5 of 2015 on the preference of Egyptian products gives qualifying bidders a price preference of fifteen per cent.

The distinction that gets lost: the fifteen per cent is the price preference margin, not the amount of local content required. To qualify, a product must contain Egyptian content exceeding forty per cent of its cost, following an amendment made by Law No. 90 of 2018, with the implementing rules governing how that is calculated and certified. So there are two separate questions — does the product clear the forty per cent test, and what advantage does clearing it give a competitor bidding against you.

Then the exclusion that matters most to readers of this article: the preference law does not govern specified defence, military production, interior, intelligence and national-security contracts, and Law No. 182 provides for special national-security contracting methods of its own. So the fifteen per cent price preference described above should not be assumed to apply to a defence acquisition at all. As in every other market here, establish the applicable regime for the specific opportunity before pricing it.

What this means when you are planning

The first consequence is that the localisation cost of a programme cannot be estimated regionally, and in some cases cannot be estimated from the published rule alone. In Saudi Arabia, above the threshold, you can calculate the minimum commitment before you bid, though neither its final size nor its delivery cost. In the UAE you may be facing a scoring advantage, a contractual obligation, or both. In Qatar you need to know which of two in-country value programmes is in play before you can say anything useful. In Kuwait there is no new offset line, but there are local-content rules. In Jordan and Egypt there is a price preference with a number attached, though in Egypt qualifying depends on a separate 40 per cent local-content test, and the specified defence, military production, interior, intelligence and national-security contracts sit outside that preference law.

The second is that the partner decision is not portable, which we cover in why local partnerships matter more than product. A partner selected to carry a strong ICV score in the UAE is solving a problem that does not exist in the same form in Jordan.

The third is a sequencing point. Where the rules are published, read them before pricing, because the obligation is a cost of the contract rather than an afterthought to it. Where the defence-specific numbers are not published, budget time for negotiation and arrive with a considered industrial proposition rather than an offer to discuss one later.

• Saudi Arabia — published threshold and a minimum 60% commitment in credits; size the base obligation before bidding, and model the delivery cost separately
• UAE — check for ICV treatment and Tawazun obligations both, and establish whether the federal procurement law applies at all
• Qatar — identify which in-country value programme applies, and whether a defence carve-out removes it; defence-specific figures are not published
• Kuwait — no new offset obligations; national-product and subcontracting rules are live, but military procurement follows specialised procedures
• Jordan — a 20% price preference for national industrial products, plus negotiated industrial participation
• Egypt — a 15% price preference conditional on Egyptian content above 40% of product cost; specified defence, military production, interior, intelligence and national-security contracts sit outside the preference law

A necessary caveat

Every regime described here is subject to change, and several have already been revised more than once. Thresholds move, policies are reissued, programmes are extended to new entities, and the discretion written into them means a published rule does not always describe what a specific programme will require.

This is a map of how differently these markets are structured, not authority for a bid, and it is not legal advice. Before anything commercial depends on it, work from the current policy document, the tender in front of you and the executed contract — in the official language text, which governs over any translation.