New Program for Companies Not Able to Meet Saudization Requirement
September 28, 2017
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Executive Summary
Companies in Saudi Arabia not meeting their Saudization targets may now subscribe to the Parallel Saudization Program, which allows the company to pay a monthly fee instead of hiring more Saudi employees.
The situation
Companies now have a temporary workaround to the requirement to meet Saudization levels.
A closer look
- A new arrangement, called the Parallel Saudization Program, has been introduced for companies that cannot meet the recently-elevated Saudization levels under the Nitaqat program, which require companies to hire a certain amount of local workers before they can hire foreign nationals.
- Under the arrangement, companies that cannot meet the requisite Saudization level can pay a monthly fee based on a specific formula (this website is only accessible in Saudi Arabia).
- For instance, if a company employs 10 Saudi citizens and it requires an additional three local employees to meet its Saudization target, it may instead choose to pay a monthly fee of SAR 12,600.
- Companies may modify or cancel their subscription to the program at any time. Companies may also choose to pay their outstanding costs under the program up to six months in advance in order to upgrade their Nitaqat tier level immediately.
What this means for employers and foreign nationals
Employers in Saudi Arabia can now increase their Saudization levels by subscribing to the Parallel Saudization Program. Although this may work as a temporary solution for certain businesses, companies are advised to meet Saudization levels in the long-term instead of continuously utilizing this system.
This alert is for informational purposes only. If you have any questions, please contact the global immigration professional with whom you work at Fragomen or send an email to [email protected].
