Saudization Compliance and HR
What is Saudization and HR Compliance?
Saudization is a national policy by the Kingdom of Saudi Arabia that aims to increase the employment of Saudi nationals in the private sector. The Ministry of Human Resources and Social Development (MHRSD) monitors Saudization compliance through the NITAQAT Program. Companies are required to meet specific Saudization quotas based on their industry, size, and business activities.
- Non-compliant companies risk fines, work visa restrictions, and even suspension of business operations.
- Understanding the NITAQAT Program: The Nitaqat Program categorizes companies into compliance levels using a color-coded system based on:
- Company size (number of employees)
- Industry sector
- Nature of business activities
- Availability of Saudi talent
- Feasibility of Saudization in the workforce
- Nitaqat Categories a Color-Coded System
| Category | Saudization Level | Compliance Benefits & Consequences |
| Platinum | Highest Saudization level | Priority in government contracts, work visas, and tenders. |
| Green | Meets Saudization quota | Access to standard government services (e.g., visa issuance, license renewals). |
| Low Green | Close to meeting Saudization target | Minor restrictions on government services; required to increase Saudi hires. |
| Red | Fails to meet Saudization quota | Heavy penalties, fines, work visa restrictions, and potential contract bans. |
Saudization quota management
Examples of Company Classification
- Platinum Company: A company in the IT sector that meets or exceeds its required Saudization quota (e.g., 40% Saudis in a 100-employee company).
- Green Company: A logistics firm that has the minimum required Saudization level (e.g., 20% Saudization in a 500-employee company).
- Low Green Company: A small retail business slightly below its required Saudization (e.g., 10% Saudization when 15% is required).
- Red Company: A manufacturing company with less than 5% Saudization, far below its required 20%, leading to fines and restrictions.
Saudi labor market compliance
Some job roles are exclusively reserved for Saudi nationals, including:
- Human Resources Managers
- Customer Service Representatives
Receptionists (Hotels, Hospitals, Government Offices) - Sales Representatives
- Accountants & Auditors
- Security Guards
- Pharmacists
- Taxi & Ride-Hailing Drivers (e.g., Uber, Careem)
- Real Estate Agents
- Airline Reservation Clerks
Penalties for Non-Compliance
Companies in the Red Category or failing to meet Saudization quotas may face:
- Fines per missing Saudi employee
- Work visa restrictions (inability to issue or renew foreign work permits)
- Business license renewal difficulties
- Contract bans (preventing government work opportunities)
How SBH Helps You with Saudization
At Saudi Business Hub (SBH), we offer comprehensive Saudization and HR compliance solutions for local and foreign companies.
Our Services Include:
✅ Compliance Assessment
- Evaluate current Saudization levels
- Identify Nitaqat gaps
✅ Tailored Saudization Solutions
- Customized action plans that fit your business model
- Cost-effective strategies to improve compliance
✅ Continuous Compliance Support
- Ongoing monitoring of your Saudization status
- Proactive management of employee documentation and portal updates
Benefits of Saudi Business Hub services?
- Proven experience with local and foreign companies in Saudi Arabia.
- Comprehensive, cost-effective solutions.
- Protection against non-compliance penalties and risks.
Trusted by 300+ Companies Expanding in KSA
SBH provided invaluable support in our strategic entry into Saudi. With the help of their on-ground specialists, SBH made our whole expansion journey quick and efficient. They simplified the process remarkably.
Omar Mufti
General Manager – Opseacom Phoebe
The team at SBH had in-depth knowledge about the Kingdom’s procedures and the newly issued laws and enabled a very efficient and effective expansion for us
Cedric Gendron
General Manager – POMA
FAQ
❓ Frequently Asked Questions – Saudization & HR Compliance
1. What is Saudization?
Saudization is a national policy by the Kingdom of Saudi Arabia to increase the employment of Saudi nationals in the private sector. It’s monitored by the Ministry of Human Resources and Social Development (MHRSD) through the Nitaqat Program.
2. What is the Nitaqat Program?
The Nitaqat Program classifies companies into categories (Platinum, Green, Low Green, Red) based on their Saudization performance relative to industry, size, and business activity. These categories affect your ability to hire, renew visas, and operate.
3. What happens if my company doesn’t meet Saudization quotas?
Non-compliant companies may face fines, restrictions on work visas, trouble renewing business licenses, and bans from government contracts.
4. Are there jobs exclusively reserved for Saudi nationals?
Yes. Certain roles, such as HR managers, receptionists, accountants, security guards, and customer service representatives, are restricted to Saudi citizens.
5. Is it possible to resolve Saudization issues quickly?
Yes. Many Saudization issues — such as category improvement or quota adjustment — can often be resolved within two weeks when handled properly and efficiently.
6. When do I have to hire a Saudi employee if I’m a newly established foreign company in KSA?
While authorities allow nearly one year before enforcing Saudization quotas, it is highly recommended to hire Saudi employees early to avoid system blocks, especially if you want to participate in government tenders or access MHRSD portals.
7. Are Saudi employees more expensive than expats?
Not necessarily. Many Saudi professionals are well-qualified, dedicated, and available at competitive market-level salaries, especially when compared to the full cost of expat employment (including visa, housing, and benefits).
Ready to Achieve Full Saudization Compliance?
- Stay compliant with Saudization requirements in Saudi Arabia. SBH offers tailored Saudization and HR solutions, Nitaqat compliance, and risk-free government relations. Contact us for expert guidance!
- Achieve full compliance with Saudization regulations while focusing on your business growth
- Contact SBH today for a free assessment and let’s build a compliant, competitive, and sustainable workforce for your business in Saudi Arabia.
