Saudization

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Saudization is the national policy of Saudi Arabia to encourage employment of Saudi nationals in the private sector, which, as of 2006, was largely dominated by expatriate workers from Southeast Asia and to a lesser extent with western expatriates. As of 2004, the program had met with little success.[1]

The Saudi government has enacted policies to promote Saudization, including warnings that "companies which fail to comply with Saudization regulations will not be awarded government contracts".[2] Since 2005, the target Saudization rate has been set at 75% for the private sector,[3] however in most sectors the actual rates are still much lower[4]

In June 2006, negotiations between business executives and senior government leaders, including King Abdullah, led to reductions of Saudization targets in some work sectors from 30 percent to 10 percent, and full waivers from Saudization in the case of two Chinese companies, according to discussions between US ambassador James C. Oberwetter and Saudi executives.[5]

As of April 2009, it was reported that a Saudi campaign seeks to reduce the number of foreign workers.[6]

Nitaqat[edit]

Nitaqat ("ranges" or "zones") is a Saudization program introduced by the Saudi Ministry of Labour.[7] The initiative was announced in June 2011, when the Ministry of Labour passed Ministerial Resolution no. (4040). The implementation deadline for the program was in 2013.

The program classifies the country's private firms into four categories: Premium, Green, Yellow and Red. Premium and Green categories include the companies with high Saudization rates, while Yellow and Red include the ones with low rates. The classification of other companies is based on the Saudization percentage (% of Saudi employees) and the total number of employees. The companies with less than 10 employees are exempt from the program, but still need to employ at least one Saudi citizen.[8]

Total no. of employees Saudization percentage
Red Yellow Green Premium
10 – 49 0 – 4% 5 – 9% 10 – 39% ≥ 40%
50 – 499 0 – 5% 6 – 11% 12 – 39% ≥ 40%
500 – 2,999 0 – 6% 7 – 11% 12 – 39% ≥ 40%
3,000+ 0 – 6% 7 – 11% 12 – 39% ≥ 40%

The companies receive incentives or penalties depending on the category they belong to:[9]

  • Premium-category companies (VIP)
    • Can recruit foreign workers using easier visa processing
    • Recruit employees from the Red and Yellow category companies and transfer their visas without their employer's permission
    • Get a one-year grace period when their licenses or registrations expire
    • Transfer the visas of potential employees from other companies, even when the employee has not completed two years with the first employer
  • Green-category companies (excellent compliance)
    • Apply for new visas once every two months
    • Recruit employees from the Red- and Yellow-category companies and transfer their visas without their employer's permission
    • Change the professions of their foreign employees (except for positions restricted to the Saudi citizens)
    • Get a six-month grace period when their certificates expire
    • Renew work permits of foreign employees, whose visas are valid for three months or more
  • Yellow category companies (poor compliance)
    • Cannot get new visas, but can get one visa only when two foreign employees depart
    • Cannot transfer visas
    • Cannot stop Green- or Premium-category companies from transferring their employees' visas
  • Red-category companies (non-compliance)
    • Cannot get new visas
    • Cannot transfer visas
    • Cannot stop Green- or Premium-category companies from transferring their employees' visas
    • Cannot renew employees' work permits
    • Cannot change employees' professions
    • Cannot open new branches or facilities

See also[edit]

References[edit]

External links[edit]