close
Share with your friends

New Saudization measures

On 28 February 2021, Saudi Arabia announced new measures for the further Saudization of IT and Communications with a specific quota that applies for each of the following sub-categories:

  • operation and maintenance of information technology,
  • operation and maintenance of communications,
  • infrastructure for information technology, infrastructure for communications, IT solutions, telecom solutions, and mail activities.

If companies do not meet the set percentages for Saudization, there will be consequences that affect the business severely such as:

  • The inability to contract with the government or entities owned by the government
  • A prohibition from obtaining block visa applications, renewing Iqamas, or changing job titles
  • The inability to renew the visas of foreign nationals where job titles have been Saudized
  • A penalty of SAR 20,000 per employees in a role reserved for Saudi Nationals
  • A penalty of SAR 25,000 for false Saudization ratio

Temporary Work Visit Visa

Saudi Arabia's new business visa, called the Temporary Work Visit Visa, which is valid for one year, allows foreign nationals to conduct work in Saudi Arabia for up to 90 days per visit, and permits multiple entries, provided they work for a visa-sponsoring entity.

Employers must meet certain eligibility criteria to qualify for the new visa quota such as:

  • Meeting the prescribed Saudization ratio and being classified at the "medium-green" level in the Nitaqat scheme.
  • Complying with obligations in the Wages Protection System
  • Ensuring that their foreign workers have valid work authorization.

Eligible employers can obtain a visa quota through the Qiwa portal where they are able to receive up to 50 visas. The Temporary Work Visit Visa cannot be transferred to other employers and it must be obtained from a Saudi consular post or visa agent abroad.

Labor Reform Initiative (LRI)

On 14 March 2021, the Ministry of Human Resources and Social Development launched the new Labor Reform Initiative (LRI) to improve the contractual relationship for workers in the Kingdom’s private sector.

Employee Mobility

Following the implementation of the LRI, foreign workers will be able to change employer without their current employer’s consent subject to certain qualifying conditions. These stipulate that a worker must:  

  • Be an expatriate working under the Saudi labor system
  • Complete a total of one calendar year of service for the current employer
  • Have a valid duly attested employment contract
  • Be presented a job offer by the new employer through the “Qiwa” portal
  • Submit a notice of the transfer request to the current employer, taking the notice period into consideration

The eligibility conditions for new employers to request the transfer of expatriate workers are:

  • The establishment must be eligible to obtain visas as per applicable regulations.
  • Compliance with the Wage Protection System (WPS) regulations.
  • Compliance with the electronic Contract Registration Program (CRP) regulations.
  • Compliance with the Self-evaluation Program regulations.

Automatic Exit Re-entry and Final Visa

The automatic exit re-entry and final visa service enables expatriate workers to exit and re-enter the Kingdom during the contract`s validity period by submitting an e-application through the «Absher» platform. The conditions for obtaining the service are the following:

  • The worker must be an expatriate working under the Saudi labor system
  • The worker must have a valid residency visa
  • The worker must have a duly attested employment contract
  • The expatriate worker must not have any outstanding fees or fines
  • The worker must declare through the “Absher” portal that they fully understand the measures entailed by their failure to return before the leave period approved by the employer ends.
  • For Final Exit, the worker must declare through the “Absher” platform that they understand the measures entailed by their decision to exit the Kingdom before fulfilling their contract or applying through the “Absher” platform

Implications and future expectations

Saudi Arabia is a fast-paced and constantly evolving immigration jurisdiction. We expect further changes on visa categories and procedural guidelines moving forward.

We shall keep you up to date on any further developments. In the meantime, our Employment and Mobility Services teams are available to discuss the regulations and assess their impact on your business

Get in touch

Employment and Mobility Services Contacts

Wadih Abu Nasr

Head of Tax, Saudi Levant Cluster

E: wabunasr@kpmg.com

Stuart Ciocarelli

Head of Tax, Lower Gulf

E: scioccarelli@kpmg.com

Shaima El Shezly

Manager, Employment and Mobility

E: selshazly@kpmg.com