Home General Knowledge GK SPECIAL TOPIC : WHAT IS NITAQAT LAW OF SAUDI ARABIA?
GK SPECIAL TOPIC : WHAT IS NITAQAT LAW OF SAUDI ARABIA?
Tuesday, 22 April 2014 08:19

 

GK SPECIAL TOPIC

 

WHAT IS NITAQAT LAW OF SAUDI ARABIA?

In order to reduce the unemployment rate among the Saudi citizens, the Saudi government issued a new system for the localization of jobs in Saudi Arabia under the name of “Nitaqat”. The new system replaces the system applied since 1994 under the name of “The Saudization”.

The basic principal of the Saudization system was the requirement to appoint certain percentage of the total workforce of all the establishments existing in the Kingdom from the Saudi citizens. This percentage varies in accordance to the activity of the establishment. Generally the percentage was fixed by 30%.

However, due to several reasons, the system did not achieve the desired objectives and mostly the 30% has not been reached. Now, more than 6.5 million non-Saudi are working in the private sector of the Kingdom compared to 700 thousand Saudis. In addition, more than 2 million work visas were issued during the preceding two (2) years.

Thus under the new Nitaqat system, companies will be labelled as “blue or premium”, “green”, “yellow”, or “red” depending on the level of Saudi workers in them to comply with established workers. It assigns different nationalization rates according to the size and activity of companies, so smaller companies have smaller overall quota requirements than larger ones do.

Companies with less than 10 employees will not fall under the Nitaqat program.

The different categories of labels are discussed below:

a) Blue category

In the Blue or Premium Category, many companies have achieved more than 30 per cent nationalization. If classified under this, the companies:

I. Can hire anybody from any part of the world.

II. Easier visa processing

III. New visas with open professions through the electronic system.

IV. Can change professions of their workers even to those that are restricted to Saudis, except jobs such as employment officials, receptionists, government liaison officials, treasury staff, and security officers.

V. Condition-free visa transfer: Can hire employees from Red zone and Yellow zones, and transfer their visas without the permission of their employers

VI. Entitled to a one-year grace period if their municipal and professional licenses or commercial registrations were expired.

b) Green category

If classified under this, the companies:

I.  Can apply for new visas once every two months.

II. Can change their foreign workers’ profession except to those restricted to Saudis

(i.e.human resource managers; liaison officers; cashiers; receptionists; security guards)

III. A six-month respite after the expiry of their zakat & revenue certificates.

IV. Can renew work permits of their employees.

V. Can recruit employees in red and yellow zones and transfer their visas without the approval of their employers.

c) Yellow Category

Under the Yellow Category, the following will be the punishments and incentives of the companies:

Punitive Measures:

I.   No new visas

II.  Can get only one visa after the departure of two expatriates

III. Cannot transfer visas and change professions.

IV. No work permit renewal for employees who have completed six years.

V. No control on workers who can switch over to premium zone companies

Grace Period of 9 months will be given to improve their status.

d) Red category

Red Category companies often have fewer than 10 per cent Saudi nationals working for them and in many cases less than 5 per cent. If classified under this, the companies:

• Given nine months to improve the status by hiring more Saudis before facing punitive measures

• Will not  be able to hire new foreign labour

• Will not be able to renew their foreign workers' visas

• Will not get new licenses or renew their licenses

 


Last Updated on Wednesday, 23 April 2014 07:15