(Bloomberg) -- Goldman Sachs Group Inc. has become the first Wall Street bank to take a step toward complying with Saudi Arabia’s ultimatum for foreign firms to set up their Middle Eastern base there.

The investment bank received a license recently from the kingdom’s Ministry of Investment to set up its regional headquarters in Riyadh, according to people familiar with the matter. It wasn’t immediately clear how many staffers will move to Saudi Arabia and how much of Goldman’s regional operations will ultimately be based in the kingdom.

A spokesperson for Goldman declined to comment.

Saudi Arabia announced new regulations for state contracts in 2021, saying it wanted to limit “economic leakage” — a term used by the government for state spending that can benefit firms that don’t have a substantial presence in the country.

Under the rules that came into force this year, firms must have a regional base in Saudi Arabia with at least 15 employees, including executives overseeing other countries or risk losing business with the kingdom’s vast network of government entities. 

The kingdom has had some success attracting contracting, manufacturing and technology firms to set up bases in the country. More than 400 global companies have obtained regional HQ licenses, Investment Minister Khalid Al-Falih said earlier this month.

Banks have been more reluctant, though the likes of JPMorgan Chase & Co., Deutsche Bank AG and HSBC Holdings Plc have ramped up hiring.

Bankers have complained about a lack of clarity about how the rules apply to financial services firms. Riyadh’s King Abdullah Financial District does not have its own regulator and financial institutions are currently regulated by the Saudi central bank and the Capital Markets Authority. Abu Dhabi and Dubai, on the other hand, have purpose-built free zones for financial services with independent regulators.

As part of his drive to boost the economy and attract international investment, Crown Prince Mohammed bin Salman has loosened restrictions on gender mixing, women driving, and public entertainment. But limited options available for things like housing, schooling and entertainment, as well as policies like the continued ban on alcohol have made many foreign executives reluctant to live in the country. 

Read More: Saudi Arabia’s Drive to Lure Expat Elite Faces Rocky Start

Neighboring Dubai continues to be the region’s financial hub, with firms also increasingly flocking to Abu Dhabi.

--With assistance from Dinesh Nair.

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