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Sun 3 Jul 2011 03:19 PM

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Expat-run Saudi outlets facing the axe

Stores where Saudis illegally get expats to run them face being closed under new labour regulations

Expat-run Saudi outlets facing the axe
The move is likely to impact up to 120,000 outlets in Jeddah alone (Getty Images - for illustrative purposes only)
Expat-run Saudi outlets facing the axe
(Getty Images)

Small retail outlets in Saudi Arabia illegally run by expatriate workers, including over 120,000 in Jeddah, face being closed as part of new labour regulations, according to a report on Sunday.

Officials in the kingdom are seeking to clamp down on Saudi nationals illegally hiring expatriate workers to manage their stores and service outlets in return for a shake of the profits, a practice commonly known as "tasattur".

The move would impact up to 120,000 outlets in Jeddah alone, a source told the Saudi Gazette newspaper on Sunday.

"Shops, stores and outlets operating under tasattur are rife across the country, and many guest workers have expanded their tasattur businesses by bringing in relatives, thereby depriving Saudi nationals of their right to work in their own country," a source at the Saudi Ministry of Labour is quoted as saying.

Businesses will be given a grace period to legalise their labour practices but the move is part of wider bid by Saudi officials to reduce the level of unemployment among nationals and force firms to hire more Saudi workers.

Last week, companies operating in the kingdom which are not employing enough locals were told they had until November 26 to improve their situation.

The Ministry of Labour said it will start implementing the third phase of the new Nitaqat system that aims to improve employment opportunities for Saudis on that date.

Under the Nitaqat system, companies are to be labeled “green”, “yellow” or “red” depending on the level of Saudis working for them.

Companies in the “yellow” category will not be able to extend their foreign employees’ work visas beyond six years while “red” companies will not be able to renew their foreign workers’ visas at all.

“Green” companies will be entitled to a number of benefits, such as expedited services for foreign workers’ visas and the ability to change the job categories of foreign workers into job categories reserved for Saudis.

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Zara 8 years ago

After living in Saudi for a number of years... I would question the effectiveness system.. They can change the rules for companies but I doubt it will solve the unemployment problem