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PR-59-2011 QA Saudization Nitaqat

PR-59-2011 QA Saudization Nitaqat

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Published by Ezzedin Tago
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Published by: Ezzedin Tago on Dec 07, 2011
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1
Embassy of the Republic of the Philippines 
Riyadh, Kingdom of Saudi Arabia 
AdvisoryNo.2011/5914July2011
Q & A on the Saudi Nationalization Policy (“Saudization”) 
as of July 13, 2011
 
ThisisatextofaQ&AontheSaudiNationalizationPolicyorSaudizationpreparedbytheDepartmentofLaborandEmployment.
 
What is Saudization?
 “Saudization,” officially known as the Saudi nationalization scheme, or the
Nitaqat 
 system in Arabic, is the newest policy of the Kingdom of Saudi Arabia
ʼ
s (KSA)Ministry of Labor, whereby Saudi companies and enterprises are required topopulate a larger portion of their workforce with Saudi nationals. It calls for anincrease in the share of Saudi manpower to total employment and for expandingwork opportunities for Saudi women and youth.
Why is the KSA implementing Saudization?
 The Saudization scheme is the Saudi government
ʼ
s response to improve theparticipation of Saudi nationals in employment in the private sector and ultimatelyaddress the Kingdom
ʼ
s unemployment problem.
How is the Saudization scheme implemented?
 To carry out the scheme, the Ministry of Labor is coming up with 41 classifications ofits employment sectors. It will also classify Saudi companies into five categoriesaccording to the number of their workers. Lastly, it will also categorize companiesinto four zones or bands—
Nitaqat 
—according to compliance or non-compliance withSaudization requirements.
What are the five company classifications?
No. of Employees Classification Required Nationalization1–10 employees10–49 employeesNoneSmallExempted5 – 24%
 
2
Embassy of the Republic of the Philippines 
Riyadh, Kingdom of Saudi Arabia 
No. of Employees Classification Required Nationalization50–499 employees500–2,999 employees3,000 or more employeesMediumLargeBig6 – 27%7 – 30%8 – 30%
What are the categories or zones of companies according to compliance ornon-compliance with Saudization?
These categories or zones are Blue (VIP category), Green (excellent category),Yellow (poor compliance), and Red (non-compliant). Blue and Green companies aremore or less already compliant, while Yellow and Red companies are not.
When did the Saudization scheme take effect?
 June 11, 2011. From this date, all Saudi companies, estimated to number around300,000, are required to “nationalize” or populate their workforce with Saudis (forthose who have not done so) or speed up their hiring of Saudis (for those who areslow to comply or are not complying). Yellow category companies have nine months(June 11, 2011 to March 11, 2012) to improve their compliance, while Red categorycompanies have six months (June 11 to December 11, 2011) to comply withSaudization.
Has the categorization of companies according to compliance or non-compliance been completed?
 The categorization would be completed on August 30, 2011.
What will happen after August 30, 2011?
 Starting September 11, 2011, the Ministry of Labor will provide incentives forcompliant companies and will impose restrictions to those that are not.
What are the privileges of compliant companies?
 Companies categorized as Blue (VIP) will enjoy a number of privileges. They will beallowed to:
 
Hire anybody from anywhere in the world;
 
3
Embassy of the Republic of the Philippines 
Riyadh, Kingdom of Saudi Arabia 
 
Apply for new visas for foreign workers with open professions throughe-services, provided they remain in the blue category after issuance ofnew visas;
 
Change the professions of their foreign workers to other professions,including those restricted to Saudi nationals, but except those whichhave been identified by the Saudi Council of Ministers;
 
Hire foreign workers from Yellow and Red categories without thepermission of their employers;
 
Renew work permits of their foreign workers irrespective of their periodof stay in the Kingdom; and
 
Apply for replacement visas.
 
Companies categorized as Green (Excellent) may
 
Apply for new foreign workers
ʼ
visas not more than once every twomonths;
 
Obtain one replacement visa for every two transactions for exit-onlyvisas;
 
Change the professions of their foreign workers to other professions,except those which are restricted to Saudi nationals;
 
Renew work permits of its foreign workers regardless of their period ofstay in the Kingdom; and
 
Hire foreign workers from companies in the Red and Yellow categorieswithout the permission of their employers.
 
What are the restrictions for companies under the Yellow and Red categories?
 Yellow
 
category establishments will NOT be able to:
 
Apply for new visas;
 
Hire or transfer foreign workers from any of the categories; and
 
Change the profession of its foreign workers.
 
They will also lose control over their foreign workers because they will be freeto sign contracts with new employers in the Blue and Green categories.
 
However, they would still be able to:
 
Obtain one replacement visa for every two workers who have left theKSA for good;
 
Renew the work permits of its foreign workers regardless of their stay,provided the remaining period in their foreign workers
ʼ
residencepermits is at least three months on the date of renewal; and
 
Renew the work permits of its foreign workers, provided these workershave not spent a total of more than six years with their employers.
 
Red
 
category companies will NOT be able to:
 
Apply for new, replacement, or seasonal visa;

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