Saudization: Pioneering Local and Global Business Harmony

For Those Entering the Saudi Market, Understanding Saudization Is Crucial

Saudization is driving KSA’s transformation, and we can help you stay compliant while securing your business’s future.

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What it means to your business:

Complying with Saudization is essential for legal operation and accessing government incentives, local talent, and a strong reputation in the Saudi market.

Saudization Fundamentals

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 in detail

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: Exceeds Saudization targets; enjoys maximum benefits.

• Green: Meets Saudization targets; considered compliant.

• Yellow: Below Saudization targets; faces potential restrictions.

• Red: Non-compliant; subject to penalties and limitations.

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.

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Ensuring businesses meet Saudization requirements while fostering local talent and economic growth.

How Saudization is Calculated

Saudization rates depend on three key factors:
✅ Saudi Employee Percentage – The proportion of Saudi nationals in the workforce.
✅ Company Size – Larger businesses have higher Saudization requirements.
✅ Business Classification – Certain sectors have stricter quotas.

For example:
🔹 International companies must ensure their second employee is a Saudi national.
🔹 Companies with over 100 employees typically need a Saudization rate of at least 30%.

Understanding Saudization Quotas & Reserved Jobs

📌 Saudization Certificate – Required for bidding on government projects (Etimad platform) and accessing business incentives.
📌 Salary Considerations – Employees earning below SAR 4,000 count as 0.5 towards the quota.
📌 Inclusion of GCC Nationals – GCC employees contribute to the Saudization quota.
📌 Hiring People with Disabilities – Each employee with a disability counts as four towards the quota.
📌 Shared Employment – A Saudi employee registered under two companies counts only for the first employer.

Additionally, specific roles are strictly reserved for Saudi nationals, including:
🔸 HR Managers & Recruitment Clerks
🔸 Government Relations Officers
🔸 Directors of Labour Affairs

Staying compliant is key to securing business success in Saudi Arabia. Let us guide you through Saudization effortlessly.

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