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Companies to pay levy for hiring non-Saudis

Generated funds to help train local talent, support job opportunities

 Saudi Arabia
Image Credit: Waseem Obaidi/Bloomberg
Traffic passes the Kingdom Tower, left, on King Fahad Road in Riyadh, Saudi Arabia. Last year, Saudi Arabia introduced a quota system that imposed a minimum number of Saudi employees on private companies.
Gulf News

Manama: Saudi Arabia-based private sector companies that employ more foreigners than Saudis will have to pay 200 Saudi riyals (Dh195.80) a month for each excess non-Saudi, the labour minister has said.

The measure, to be implemented on Thursday, aims to help provide Saudi nationals with more employment opportunities, Adel Al Faqeeh said.

“There are no taxes imposed on foreigners in Saudi Arabia and they benefit from all the facilities and assistance provided by the state, including electricity and fuel,” he said. “The application of the measure cannot be considered a tax. It is an opportunity for private companies to enhance their working environment by employing Saudi nationals. It aims at increasing the chances of Saudis of getting hired,” he said at a press conference in Riyadh.

Companies that have equal numbers of Saudis and non-Saudis will be exempted from the new measure.

The generated funds will be channelled to the Human Resources Development Fund to support the employment of Saudis, the minister said.

Saudi Arabia has been pushing for making its nationals more attractive to the private sector by providing them with adequate training and by introducing a series of restrictions on hiring foreigners.

Last year, it introduced a quota system that imposed a minimum number of Saudi employees on private companies.

Non-Saudis dominate the private sector amid reports that they make up around 90 per cent of the labour force.

“Changes in the labour market have to be gradual and it is in everybody’s interests that the private sector does not get seriously affected,” Al Faqeeh said.

The minister said that efforts to employ Saudi nationals have been successful with the hiring of 390,000 Saudis, including 90,000 women, since the launch of the dedicated system “Nitaqat”.

Saudi Arabia is home to around 27 million people, including nine million foreigners, mostly Asians.