Reforms to Nitaqat Program Forthcoming

• Saudization plan. A fixed three-year Saudization plan will be introduced to increase the Saudization rates gradually on a yearly basis.

Currently, Saudization ratios are adjusted on an ad hoc basis.

Employers will be better able to plan and recruit for their workforce as they will not have to adjust to rapidly-changing Saudization ratios without advance notice.

• Consolidation of categories. Select small economic activities (based on the business sector in which the company operates) will be combined to create one larger economic activity, which will result in 32 economic activity categories. For example, pharmacies, laboratories, health services and medicine agents will become “health services”. 

Currently, there are 85 existing economic activities. 

With a smaller group of economic activity categories, companies will be better able to categorize their business sector when calculating their Nitaqat tier rating.

• New company classification system. A new system will be introduced to classify employers based on a proportional relationship between the company’s headcount and the required Saudization ratio. The color-coded tier level that classifies which companies are compliant with Saudization ratios (i.e., red, low-green, medium-green, high-green and platinum) and grants benefits within the immigration system based on these levels, will remain in place.

Currently, Saudization rates are prescribed based on company size.

This will allow the Saudization rate to increase gradually and proportionally with respect to the company’s headcount, instead of rising dramatically when the company becomes subject to a larger headcount tier group (for example, going from 199 to 200 employees, with 200 being the lower threshold for a new category).