Guide
Nitaqat and Saudization: the obligation that decides your hiring
Updated
Saudization is a classification, not a budgetable fee. It decides whether you may hire expatriates at all, and can shut down a hiring plan without appearing on an invoice.
The five ranges
The Nitaqat Mutawar programme, introduced by Ministerial Decision No. 182495 of 23 May 2021, classifies employers into five ranges: Red, Low Green, Medium Green, High Green and Platinum. An entity's range comes from comparing its Saudization rate with the thresholds for its economic activity (Ministry of Human Resources and Social Development, Nitaqat Mutawar Procedural Guideline).
What each range lets you do
| Range | New expatriate visas | Renew existing work permits | Transfer sponsorship in |
|---|---|---|---|
| Platinum | Yes | Yes | Yes |
| High Green | Yes | Yes | Yes |
| Medium Green | Yes | Yes | Yes |
| Low Green | No | Yes | No |
| Red | No | No | No |
A Red range entity cannot apply for new expatriate visas, issue work permits for new expatriate workers or renew work permits for existing ones. It cannot change occupations or receive transferred sponsorships. In practice that is a freeze on the expatriate workforce, which for a newly established foreign-owned company is the workforce.
Why we publish no required percentage
There is no single Saudization rate. The programme abandoned fixed size bands for a smooth relationship between headcount and required Saudization: a logarithmic curve. Its gradient and intercept are published per economic activity and per year in the guideline's annex. Two companies with the same headcount in different sectors face different thresholds, and the coefficients are revised.
So the only honest answer to "what Saudization rate do I need" is: look up your economic activity, your headcount and the current year's coefficients. The Ministry publishes a Nitaqat calculator on Qiwa that does it for you, and an entity can identify its range electronically.
The obligations attached to a foreign licence
A 100% foreign owned commercial licence carries its own commitments over the first five years, set out in the Investor Guide:
- training 30% of Saudi employees annually;
- complying with localisation rates as determined by the Ministry of Human Resources and Social Development;
- developing a plan to place Saudis in senior management posts and keep them there.
Saudization interacts with real cost through GOSI contributions, salary levels for Saudi hires and expatriate levies. Price it as a workforce strategy, not a compliance line.