Saudi companies have been ordered to exclude Dutch firms from future projects over an anti-Islamic stunt by a far-right Dutch politician, in a royal decree made public by the Mecca Chamber of Commerce.
The decree bans "Dutch firms from taking part in future projects in the kingdom, whether directly or through subcontracting", according to the chamber.
It also reduces to a minimum the number of visas "for Dutch companies and investors who are not part of vital projects in the kingdom". And it orders an end to visits by trade delegations between the two countries.
In November, anti-Islamic Dutch lawmaker Geert Wilders printed stickers imitating the Saudi flag. The Arabic text on the flag, which reads "There is no god but Allah and Mohammed is the messenger of Allah," was changed to "Islam is a lie, Mohammed a criminal, the Koran is poison."
The Dutch Foreign Ministry said earlier that Saudi Arabia felt "insulted" by Wilders, and spokesman Friso Wijnen said this could entail "commercial measures against the Netherlands".
The Dutch government distanced itself from Wilders' actions at the time, pointing out that the populist firebrand is not part of the government and his ideas are not representative.
Wilders' Party for Freedom (PVV) is expected to make gains in European elections that begin this week, and has allied with other far-right parties including France's National Front led by Marine Le Pen.
Wilders previously compared the Koran to Adolf Hitler's Mein Kampf, and claimed the religion is fascist.
Attempts to prosecute him for his claims have failed. He was acquitted on charges of inciting hatred in 2011, with judges arguing that his comments were directed against a religion rather than an ethnic group.
The Netherlands should have boycotted Saudi Arabia "a long time ago", Wilders said in a statement commenting on potential trade measures, adding that it is an "awful" and undemocratic country. "Who do they think they are to lecture a Dutch politician?"
Wilders, who has gained backing in the Netherlands as support for Prime Minister Mark Rutte's coalition of Labour and Liberals declines, said an alliance of anti-European groups would push to repatriate powers to national capitals after this month's elections.
Additional reporting by Bloomberg