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Saudi Arabia – ‘Saudisation’ rules eased for high performing companies

09 June 2014

The Saudi Labour Ministry announced Sunday that it would allow firms in the high and medium Green categories of Nitaqat to recruit foreign workers required for the expansion of their business activities, reports arabnews.com.

It was added that companies in the lower Green, Yellow, and Red categories would not be extended the same privilege.

The Nitaqat system is a process designed by the Saudi Ministry of Labour to boost the employment of locals in the private sector. Launched in 2011, the work programme evaluates private sector companies by calculating the percentage of Saudi employees. Based on their performance, companies are graded as Excellent, Green, Yellow, or Red.

Depending on the type of work undertaken by the companies, the percentage of local employees can vary from between 6% and 50%. 

Labour Minister Adel Fakeih commented: “We have clearly mentioned the categories of companies that would benefit from this service.”

He explained via Twitter that companies would be given visas as per their requirements and in line with recruitment conditions, but their status should not decline to lower Green as a result of the new recruitment.

Ziyad Al-Bassam, Vice Chairman of the Jeddah Chamber of Commerce and Industry (JCCI), said the decision would have limited impact on the labour market as it addresses only those companies that have fulfilled ‘Saudisation’ conditions: “The real estate sector will be the major beneficiary of this decision. It will also benefit tourism companies that have entered the higher green category.”

Abdullah Marae Binmahfouz, a member of the JCCI board, said he had requested that the Minister allow companies in the lower green and yellow categories to benefit from the service to help them expand their activities. “This is a positive step,” he said while urging the ministry to ease recruitment procedures to boost the market as well as the economy. 

“We have made remarkable headway in ‘Saudisation’, which is a continuing process and will not be limited to a specific time,” Mr Binmahfouz explained.

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