Saudi Arabia Update - May 2015

1 LEGAL DEVELOPMENTS

1.1 New Saudization Rules Proposed

Saudization is the colloquial term used to refer to Saudi Arabia's official government policy of encouraging the employment of Saudi Arabian nationals in the private sector. The policy of Saudization is enforced and implemented through several programs and regulations in Saudi Arabia, including the Nitaqat Program.

New rules proposed by the Ministry of Labor seek to measure the Saudization level of companies in Saudi Arabia based on the wages and years of service of its expatriate workforce.

If approved, the rules would treat an expatriate worker with 3-5 years of working in Saudi Arabia as two expatriate workers, an expatriate worker with 5-7 years of working in Saudi Arabia as three expatriate workers, and an expatriate worker with over 7 years of working in Saudi Arabia as four expatriate workers for Saudization purposes.