Saudi Arabia's Ministry of Human Resources and Social Development (MHRSD) has recently announced a significant change in the classification of certain categories of individuals under the Nitaqat program. This change is expected to impact the calculation of the Saudization percentage, a key factor in the country's labor market.
Previously, foreign investors who owned private companies were counted as foreign nationals under the Nitaqat program. However, under the new regulations, these individuals will now be classified as Saudi nationals. The conversion rate for this classification is one foreign investor to one Saudi national. This shift in policy represents a significant change in the way foreign investors are viewed within the context of the Nitaqat program.
In addition to this, the MHRSD has also announced that other foreign nationals will be factored into Saudization percentages at lower ratios. Specifically, a Palestinian holding an Egyptian passport or a Baluch will now count as a quarter of a foreign national for Saudization purposes. This means that hiring four individuals from these groups would be equivalent to hiring one non-Saudi national.
The same rule applies to nationals of Myanmar, who will also be counted as a quarter of a standard foreign national worker in all regions of Saudi Arabia. However, an exception is made if they reside in Makkah or Madinah, where they are counted as a standard foreign national worker.
These changes are expected to benefit companies operating in Saudi Arabia, potentially helping them achieve a higher tier level under the Nitaqat program. This higher tier level, which would be automatically updated in the Qiwa platform, could lead to certain immigration incentives for companies.
Pros:
The new classification system could potentially benefit companies by helping them achieve a higher tier level under the Nitaqat program.
The changes could lead to certain immigration incentives for companies.
The new regulations could encourage more foreign investment in Saudi Arabia.
Cons:
The changes could potentially lead to an increase in the hiring of certain foreign nationals over others, leading to an imbalance in the workforce.
The new rules may be seen as discriminatory towards certain nationalities, particularly those from Myanmar residing in Makkah or Madinah.
The changes could potentially lead to exploitation of the system by companies seeking to achieve a higher Saudization percentage.
Previously, foreign investors who owned private companies were counted as foreign nationals under the Nitaqat program. However, under the new regulations, these individuals will now be classified as Saudi nationals. The conversion rate for this classification is one foreign investor to one Saudi national. This shift in policy represents a significant change in the way foreign investors are viewed within the context of the Nitaqat program.
In addition to this, the MHRSD has also announced that other foreign nationals will be factored into Saudization percentages at lower ratios. Specifically, a Palestinian holding an Egyptian passport or a Baluch will now count as a quarter of a foreign national for Saudization purposes. This means that hiring four individuals from these groups would be equivalent to hiring one non-Saudi national.
The same rule applies to nationals of Myanmar, who will also be counted as a quarter of a standard foreign national worker in all regions of Saudi Arabia. However, an exception is made if they reside in Makkah or Madinah, where they are counted as a standard foreign national worker.
These changes are expected to benefit companies operating in Saudi Arabia, potentially helping them achieve a higher tier level under the Nitaqat program. This higher tier level, which would be automatically updated in the Qiwa platform, could lead to certain immigration incentives for companies.
Pros:
The new classification system could potentially benefit companies by helping them achieve a higher tier level under the Nitaqat program.
The changes could lead to certain immigration incentives for companies.
The new regulations could encourage more foreign investment in Saudi Arabia.
Cons:
The changes could potentially lead to an increase in the hiring of certain foreign nationals over others, leading to an imbalance in the workforce.
The new rules may be seen as discriminatory towards certain nationalities, particularly those from Myanmar residing in Makkah or Madinah.
The changes could potentially lead to exploitation of the system by companies seeking to achieve a higher Saudization percentage.
Does anyone know if there are any downsides to these changes?
I can't wait to see how it impacts the economy and job market in Saudi Arabia!