Saudi micro SMEs forced to hire nationals

  • Share via facebook
  • Tweet this
  • Bookmark and Share

Small businesses in Saudi Arabia that employ ten or fewer staff must have at least one Saudi worker from next month, the Ministry of Labour reportedly ruled.

According to English language Saudi Gazette, the ministry recently revealed that 340,000 businesses in the kingdom currently have no Saudi citizens working for them.

The newspaper said that small businesses that do not comply with the new regulation face being stripped of their operating license and hit with financial penalties, while their workers’ residency permits will not be renewed.

Earlier in March, a source at the Ministry of Labour was quoted as saying that almost half of all companies in Saudi Arabia are failing to comply with rules on employment of citizens.

The source said 48 percent of 248,828 firms based in the Gulf Arab state are currently classified in the ‘Red’ zone, or in violation of, Saudi Arabia’s Nitaqat system.

The unnamed source told Arab News that 19 major international companies were in violation of Nitiqat, while 80,347 were classified as ‘Green’, or in compliance, during 2012.

Saudi Arabia, the Gulf’s most populous nation and world’s biggest oil exporter, is in the midst of a major drive to push more of its citizens into private sector employment. According to government estimates, 12 percent of Saudis are currently unemployed, while nine-tenths of workers in the private sector are overseas workers.

In November last year, the Ministry of Labour introduced a controversial new policy that would see companies that employ more foreign staff than nationals fined SAR2,400 (US$640)  per overseas employer, per year.

The move has drawn praise from Prince Alwaleed bin Talal, Saudi Arabia’s richest businessman, but criticism from others, including the kingdom’s top Muslim cleric and the legislative Shoura Council.

Related:
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

Posted by: jon

employment for the nationals, thats what will be achieved. you must understand in the future slowly but surely expats will be leaving. that young man in tunisia, that sparked the uprisings across the region, was the result of him not being able to provide for his family. the gulf will do whatever they can for such things not to happen, like the nationlization programs they have. okay taxi drivers, maids, construction workers, will still be dominated by migrants but the majority of people who work those profession in the west are minorities or migrants as well. yes the price for services and goods will rise, but so will the spending power of the average citizen in ksa and across the gulf. i never did understand why people here take it so personal when such government programs are introduced. the best thing to do if you are an expat is accept such changes are coming and to be financially prepared for the worse case scenario.

Posted by: andy

just an additional cost to businesses that will eventually be passed onto the consumer.. its just a form of taxation and will achieve precisely nothing in the end...

Posted by: procan

Andy is so right about this. Just start sending selected foreigners home then fit your own people in and monitor for complacence.

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
Smoke-free Dubai - the big debate

Smoke-free Dubai - the big debate

Will the emirate ever be smoke free? We spark up the conversation...

4
Mentoring matters: Mowgli Q&A

Mentoring matters: Mowgli Q&A

Kathleen Bury, CEO of mentoring foundation Mowgli, on why mentoring...

Guide to getting married in Dubai on a budget

Guide to getting married in Dubai on a budget

Alarmed by how expensive weddings are? Our experts reveal how...

2
Most Discussed
  • 24
    World's most pierced man refused entry to the UAE

    Tolerance has its limits everywhere including Dubai and those who considered Dubai a lawless circus were held accountable...so thank you Dubai authorities... more

    Thursday, 21 August 2014 10:51 PM - Khalil
  • 23
    Baby NOT on board?

    Some of you cry babies need to get your own personal apartments on the plane ! You cry more then the babies I have seen in my travels. LOL more

    Thursday, 28 August 2014 9:10 AM - Jim
  • 21
    Israel “must be punished” over Gaza, says Dubai police chief

    This high moral ground that Mick is talking abt sound very familiar. May I remind Mick that the US & its British ally alone killed over 1 million innocent... more

    Thursday, 7 August 2014 4:12 PM - Mathew