Nitaqat System: Saudization of Business in Saudi Arabia
Nitaqat is a labor nationalization program introduced by the Ministry of Human Resources and Social Development of Saudi Arabia. It obliges companies to hire a certain percentage of Saudi citizens. The system is managed through the Qiwa portal, where companies can calculate quotas and obtain certificates.
Company categories
"The Nitaqat program is part of Saudi Arabia's strategy to reduce dependence on oil and increase employment for its citizens. Similar measures include restrictions on foreign ownership outside special economic zones." Ivan Egorov, юрист
Companies are divided into categories based on the percentage of Saudi employees
Platinum level
High Saudization (26.52-100%). Gives the company access to privileges including easy access to visas, simplified work permit processing, expedited account opening, participation in government tenders and preferences in business operations.
Green level
Divided into low, medium and high degrees of Saudization (16.22-26.51%). Companies in this category are considered compliant and have basic privileges.
Red level
The degree of Saudization is low (0-16.21%). Companies face difficulties in renewing work permits, hiring foreigners or obtaining new visas. Some banking services (such as loans) may also be denied.
Which companies fall under Nitaqat?
Companies in Mainland
Fully covered by the program.
Companies in SEZ
There may be exemptions or partial exceptions, but some requirements may remain. Generally, such companies are required to meet the basic requirements for Saudization for certain roles or a minimum number of Saudi employees. There are exemptions for SEZ companies: there is no requirement to hire Saudis in the first 5 years of operation, and from the 6th to the 10th year, a minimum of 15% of positions must be Saudi citizens.
Exceptions
Companies with fewer than 5 employees are exempt from the strict requirements but are required to hire at least one Saudi to remain compliant.
Quotas
How are quotas calculated?
The Qiwa portal allows companies to monitor the status and calculate the necessary indicators ( Nitaqat Calculator ).
IT companies
The requirements are higher, as the industry is considered a priority. For companies with 10-50 employees, the share of Saudis can be 30-50%, and for large companies - even higher.
Other industries
In retail and construction, quotas are usually lower (5–20%), but still significant.
Quotas depend on
- The size of the company.
- Industries (e.g. IT, construction, retail).
- Percentage of Saudi employees.
Special conditions
- Employees with disabilities are counted as 4 employees.
- Part-time employees (e.g. students or part-time employees) are counted as 0.5 employees.
Requirements for wages and accounting of employees in the quota
- The salary of Saudi employees must be at least SAD 4,000 per month for the employee to be counted towards the Nitaqat quota.
- Employees with a salary between SAR 2,000 and SAR 3,999 are only counted as 0.5 employees in the Nitaqat quota.
Recommendations
Our recommendations for Nitaqat compliance for businesses:
Integrating Nitaqat into a Business Plan
Hire Saudis for management roles (e.g. HR or PR) to improve the company's profile.
Use hybrid models
Combine localised talent with international expertise, especially in SEZ.
Constant monitoring of the company status via Qiwa
Update employee data regularly to avoid entering the red zone.
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