New Rules in Financial Sector Focused on Increasing Local Worker Participation
October 24, 2019
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At a Glance
- The Saudi Arabian Monetary Authority (SAMA) issued regulations by which companies under its purview (including banks, insurance and financial technology firms) must abide when recruiting and employing individuals in leadership positions.
- The regulations aim to ensure that skilled individuals are employed in executive positions and to increase the employment of skilled Saudi nationals.
- SAMA also issued a list of professions in the financial sector that are now restricted to Saudi nationals.
The situation
The Saudi Arabian Monetary Authority (SAMA) issued regulations by which companies under its purview must abide when recruiting and employing individuals in leadership positions in the financial sector.
New requirements for employers
The new regulations require employers under SAMA’s purview, including banks, insurance and financial technology firms, to follow the below new rules:
| New rule | Impact |
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New restricted positions. Under the new regulations, SAMA has adopted a list of 13 professions that are restricted to Saudi nationals employed in financial institutions under its supervision, including the following job titles:
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Foreign nationals currently employed in leadership roles that are on the restriction list may need to obtain a No Objection Certificate (‘NOC’) when they renew their work permits. This will likely involve the employer submitting application documents and letters justifying the situation. It is not clear how long approval of this NOC will take. |
Background
- Role of SAMA. SAMA is the central bank of Saudi Arabia which issues the national currency, supervises commercial banks, manages foreign exchange reserves and ensures the growth of the country’s financial system.
- Saudization. Although Saudi Arabia has sought to relax certain employment policies to attract foreign business, the government is now focused on increasing the employment of skilled Saudi nationals, particularly within sectors that are critical to its economy, and promoting economic diversification in the oil-dependent nation.
- Regional comparison. Oman is another country in the Middle East which has prioritized hiring local workers by setting out the minimum ratios of Omani to foreign workers in different professional levels and restricting the recruitment of foreign workers in certain sectors.
Looking ahead
Saudi Arabia will likely continue to pursue measures that will increase the number of Saudi nationals in the workforce as it seeks to reduce current local unemployment rates, which hover around 12% and are largely the result of high levels of university graduates seeking work in the country.
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].
