Saudi Arabia – “Saudization” brings major visa changes

Pro-Link GLOBAL's latest Global Brief covers Saudi Arabia and the "Saudization" policy which aims to increase employment rates among Saudi nationals.

Saudi Arabia \"Saudization\" Immigration Policy
The Saudi Arabian Ministry of Labour has announced several immigration changes designed to protect its local labour market and boost government revenues from immigration. The changes include a new requirement of a local labour market test before applying for block visas and major increases in fees for several visa categories. 

“Saudization” and the Saudi labour market

With over 90 per cent of the private sector jobs in Saudi Arabia currently filled by foreign labour, one might assume that the local Saudi labour pool was at full employment, thus the need for all those foreign workers. However, that assumption is not the reality. In recent years the unemployment rate among Saudi nationals has reached as high as 12 per cent. Policy makers in Saudi Arabia continue to debate the reasons for this unusual dichotomy – lower prices in the world oil market, demographics, cultural norms, education and job training, the high demand for temporary workers on construction projects, and the lower wages and poor working conditions of many private sector jobs – but the problem persists.This issue is precisely what has led the Saudi government in recent years to pursue its policy of “Saudization” of its workforce, the goal of which is to increase the percentage of private sector jobs held by Saudi citizens. It then goes without saying that this necessarily involves decreasing the number of foreign nationals working in the Kingdom. However, striking the right balance between the needs of local workers and the demands of Saudi companies for foreign labour has proven an elusive goal, leading to multiple permutations of “Saudization” in their labour and immigration policy. Several recent immigration changes are part of this continuing effort.

What's changed?

New, more extensive labour market-testing requirements

On 1 August the Ministry of Labour (MOL) introduced its new Taqat online national labour portal and database of available jobs. The stated goal of Taqat is to “offer and facilitate employment and training services, efficiently and effectively, to further sustain and develop the labour force.” As of this writing, the Taqat website now lists over 1,500 available employment postings. This is obviously welcomed news to Saudi job seekers. However, in a major step beyond simple job advertising, the MOL is now requiring Saudi employers to first post all available job positions on Taqat before applying for any new block visas for foreign workers.The “block visa” scheme is the principle route that Saudi employers take to meet their needs for foreign workers. Under the scheme, employers receive a pre-approval through the MOL for several (a “block” of) positions for which they need foreign labour. After approval of the block visa, applications for work visas are in turn submitted at the Saudi Embassy or Consulate in the job applicant’s country of residence. It now typically takes three to four months from the time that the block visa application is filed until the foreign employee receives his individual work visa and arrives in Saudi Arabia ready for work. With the addition of employers having to first post the job on Taqat in order to show an effort to recruit a local worker, this process is lengthened. The length of time the position is posted on Taqat and time spent considering the resulting local applicants now increases the overall timeframe before employers can have a foreign national begin work. The MOL has yet to publish guidelines for employers specifying how long a position must be posted on Taqat and what efforts must be made to review local applicants. However, employers at a minimum should be prepared now as part of the block visa process to show documentation of the Taqat position posting, the length of time it was posted, the number and qualifications of any local applicants for the position, and the reasons why the candidates were found unsuitable. 

Increased visa application fees 

Also announced by the Saudi Cabinet this month were the following new higher visa fees:
  • Single-entry visit visa fee of SAR 2,000
  • Six-month multiple-entry visit visa fee of SAR 3,000
  • One-year multiple-entry visit visa fee of SAR 5,000
  • Two-year multiple-entry visit visa fee of SAR 8,000
  • Single two-month exit re-entry visa fee of SAR 200 (+SAR 100 for each additional month)
  • Multiple-entry three-month exit re-entry visa fee of 500 (+SAR 200 for each additional month)
  • Transit visa fee of SAR 300
  • Departure visa fee at seaports of SAR 50
These new fees, which take effect 2 October, represent major increases over current fee levels. Currently, all visit visas are SAR 500 regardless of validity period. So in the case of a two-year multiple-entry visit visa, this represents a SAR 7,500 hike in fees, the equivalent of USD 2,000 or EUR 1,775. Further, the transit visa fee and seaport departure fee are new fees that foreign employees and their employers must now take into account. According to the Saudi Press Agency, these increased immigration fees are part of efforts in a number of areas to boost state revenues through higher fees in an era of lower oil prices. 

How these changes affect you 

For employers of foreign nationals in Saudi Arabia, both the time and the cost of doing business have now increased. Employers will certainly need to consider the new, longer process for obtaining block visas when planning for their work force needs. While we await more specific guidance from the Ministry of Labour regarding the new labour market testing requirement, employers should be immediately examining – and revising, if need be – their recruitment practices to include posting open positions on the new Taqat employment portal. Human resources managers should keep thorough documentation at each step of the process, as proof that the new requirements have been met will likely be required when applying for any future block grants.Further, with the new higher re-entry fees, employers may want to plan business travel more strategically to minimize their foreign national employees’ needs to frequently exit and re-enter the country. Also, these higher visit visa fees should be taken into account when budgeting travel for employee assignments, client visits, and business meetings and considered in negotiating future contract terms as an additional cost of doing business in Saudi Arabia.

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Caveat Lector – Warning to ReaderThis is provided as informational only and does not substitute for actual legal advice based on the specific circumstances of a matter. We would like to remind you that Immigration laws are fluid and can change at a moment's notice without any warning. Please reach out to your immigration specialist or your client relations manager at Pro-Link GLOBAL should you require any additional clarification. This alert was prepared by your Pro-Link GLOBAL Knowledge Management team. We worked with our PLG | KGNM Saudi Arabia Office “Proven” to provide you this update.Information contained in this Global Brief is prepared using information obtained from various media outlets, government publications and our KGNM immigration professionals. Written permission from the copyright owner and any other rights holders must be obtained for any reuse of any content posted or published by Pro-Link GLOBAL that extends beyond fair use or other statutory exemptions. Furthermore, responsibility for the determination of the copyright status and securing permission rests with those persons wishing to reuse the materials. Interested parties are welcome to contact the Knowledge Management Department (km@pro-linkglobal.com) with any additional requests for information or to request reproduction of this material.