The Saudi Ministry of Labor and Social Development (“MLSD”) is expected to implement a new instant calculation for Saudi and foreign employees as part of its existing Nitaqat System. This change is anticipated to come into effect on 2 February 2019. In this alert, we provide a brief outline of the impact of this change.
The Nitaqat program was introduced in 2011 in order to increase the employment of Saudi nationals in the private sector. Currently, companies in Saudi Arabia are assigned a unique company-specific Nitaqat status based on the below three factors which in turn determines the type of immigration facilities, incentives and privileges these companies are able to avail when recruiting employees in Saudi Arabia.
Under the current Nitaqat program (and based on the above factors), companies are classified under one of the below four different Nitaqat colour coded statuses:
On 2 February 2019, the following amendments to the current Nitaqat program are expected to come
into force and will apply to companies that have been classified High Green or Platinum for a period of
at least 13 or more weeks:
Under the proposed new changes to the Nitaqat program, there is a welcome reduction in the overall timeline for Nitaqat calculation purposes, which will be viewed positively by impacted companies operating in Saudi Arabia.
We will continue to monitor these changes and inform you of any developments.
Middle East Tax & Legal Services Leader, PwC Middle East
Tel: +966 56 704 9675
Legal Leader | Head of Corporate, PwC Legal Middle East
Tel: +971 (0)56 418 9768
Immigration Leader, PwC Legal Middle East
Tel: +971 (0)55 876 1249