Saudization: Pioneering Local and Global Business Harmony

Expanding to KSA as a non-local? Learn how Saudization may impact your plans and how we can assist.

What is Saudization?

Launched in 2011, the Saudization program, or "Nitaqat," promotes the integration of Saudi nationals into the private sector while supporting international business objectives. By implementing quotas, compliance categories, and a system of incentives and penalties, the program cultivates a thriving business environment. 

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What It Means for Your Business:

Embracing Saudization is not only about compliance but also about strategically aligning your business with Saudi Arabia's vision for the future. By understanding and implementing Saudization, you gain access to incentives, support services, and local opportunities while avoiding penalties. It's a crucial step towards accessing global markets and enhancing Saudi Arabia's global presence.

Saudization is driving KSA's transformation, and we can help you be a part of this journey.

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Four key points highlight the essentials of Saudization: quotas, categories, incentives/penalties, and compliance monitoring.

1. Quota System: Minimum Saudi employment percentages.
2. Color-Coded Categories: Compliance levels indicated by Platinum, Green, Yellow, and Red.
3. Incentives and Penalties: Benefits for compliance, consequences for non-compliance.
4. Monitoring and Enforcement: Regular inspections and audits

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Saudization: Catalyzing Business Synergy. 

This initiative offers businesses a strategic foothold in Saudi Arabia's rapidly evolving market, showcasing a commitment beyond profits to actively contribute to the nation's socio-economic advancement. It unlocks the potential for local job creation while fostering a vibrant synergy between local and international enterprises. 

Here's a detailed look at how the program works:

 1. Quota System:The Saudi government sets quotas specifying the minimum percentage of Saudi nationals that private sector companies must employ in various job categories. These quotas vary depending on factors such as the size of the company and the industry sector.

2. Color-Coded Categories:The Nitaqat program categorizes companies into different color-coded categories based on their compliance with Saudization requirements:

• Platinum: Highest level of compliance.
• Green: Meets compliance standards.
• Yellow: Below required Saudization levels.
• Red: Non-compliance, facing restrictions.

3. Incentives and Penalties:

• Incentives: Companies exceeding quotas may receive preferential treatment in government contracts, expedited visa processing, and access to training programs.
• Penalties: Non-compliant companies may face fines, restrictions on visa issuance, and limitations on participation in government contracts.

4. Monitoring and Enforcement:The Ministry of Human Resources and Social Development regularly inspects, audits, and assesses companies' employment practices to ensure compliance. Non-compliance can lead to corrective actions or sanctions.

Saudization rates are calculated based on three key factors:

1. Saudi Employee Percentages: The proportion of Saudi nationals in the workforce.
2. Entity Size: The total number of employees.
3. Entity Classification: The type of business activities

For example:

• International companies must ensure their second employee is a Saudi national.
• Companies with more than 100 staff typically need a Saudization rate of at least 30%.

•  Companies not meeting the criteria cannot attain the Saudization certificate, which is required for bidding on Etimad and other public sector projects.
• There is no difference in quotas for men and women.
• A Saudi employee with a salary less than SAR 4,000 counts only as 0.5 person towards the quota.
• Employing 1 person with a disability counts as 4 persons towards the quota.
• All GCC nationals are counted towards the Saudization quota.
• A Saudi employee registered under two companies counts towards the first company’s quota only

Certain occupations are reserved for Saudi nationals, including Senior HR Manager, Personnel Specialist, Recruitment Clerk, Government Relations Officer, Director of Labour Affairs, and more.

These key points highlight the essentials of Saudization: quotas, categories, incentives/penalties, and compliance monitoring.

Discover more with us. Benefit from our solid knowledge and experience in Saudization and make it your key asset to thriving in Saudi Arabia.

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