What is Nitaqat?
Nitaqat is a new Saudization program, introduced by the Saudi Ministry of Labour. Under the program, private firms are classified into Premium, Green, Yellow, and Red categories based on their percentage of Saudization. The program sets penalties and incentives for companies based on which category they fall under.
Companies with high Saudization rates will fall under the Premium or Green categories, while those who fail to achieve the required rates will be included in the Yellow and Red categories. Nitaqat ensures that Saudization rates are based on the actual performance of private businesses, and takes into consideration the sector as well as the size of the workforce for each company.
The criteria used for classification depends on the company’s sector and size. In the Nitaqat program, the labor market is segmented into 41 commercial activities, and companies are categorized into five sizes based on the number of people employed.
Companies that fall under the red category will not be allowed to renew work visas for their foreign employees. They will be barred from opening new branches or facilities.
Companies that fall under the Yellow category can renew work visas for each foreign employee on the condition that the employee has not spent more than six years in the kingdom. Yet, they cannot transfer visas for non-Saudi workers to fall under their own sponsorship. Read: How to Check Company Nitaqat Color Status Online
If a company falls under the Yellow category, it will face the following penalties:
- Only be allowed to get one visa upon the departure of two foreign employees.
- The company will not be allowed to get new visas.
- The company will not be allowed to transfer visas.
- It will not have control over employees as the employees would be able to to move to companies under Green or Premium categories.
If the company falls under the red category, it will face the following penalties:
- Will not be allowed to get new visas.
- Will not be allowed to transfer visas.
- Will not have control over employees as the employees would be able to to move to companies under the Green or Premium categories.
- Will be deprived of basic ministry services such as renewal of employees’ work permits, change of profession, transfer of visas, issuance of new visas and opening files for new business branches.
What happens if a company falls under the Premium or Green categories?
Companies that fall under the Premium or Green categories will be able to benefit from an easier visa-approval process for their employees. They will also be able to recruit workers from the other categories without having to obtain consent from the other employer. Similar: HRSD launched new “Updated Nitaqat” program
If your company falls under the Premium category, you will be entitled to:
Recruit foreign workers without needing to apply for a visa once every two months.
Transfer the visas of potential employees from other companies, without having them fulfill the condition of completing two years with the first employee.
Recruit employees from companies within the red or yellow categories and transfer their visas without the permission of their employer.
Get a one-year respite if your municipal and professional licenses or commercial registrations expire. Also Read: Ministry of Labor Cancels Yellow Category of Nitaqat system
If a company falls under the green category, it will be able to:
- Apply for new visas once every two months.
- Change the professions of your foreign workers, with the exception of positions restricted to Saudis.
- Get a six-month grace period after the expiry of your Zakat and revenue certificates.
- Renew work permits for current foreign employees given that their residency visas are valid for at least three months.
- Recruit employees from companies within the red or yellow categories and transfer their visas without the permission of their employer.
Foreign Investors is Equal to Saudis
In a recent amendment to the Nitaqat program, Saudi Arabia has updated its regulations to consider foreign investors — specifically, owners of private businesses within the kingdom — on par with Saudi nationals. This means that for the purposes of calculating Saudization percentages, these foreign entrepreneurs will be regarded as equivalent to Saudis.