RIYADH (24 Jan 2023): The second phase of the revised Nitaqat scheme, which will make Saudization mandatory according to the total number of employees in companies in Saudi Arabia, will be implemented from next week.
In Saudi Arabia, it is mandatory for all private companies to employ Saudi nationals. Nitaqat is a process of classifying companies according to the number of Saudi and foreign employees in different colors such as red, light green, medium green, dark green and platinum. It has been implemented since 2017.
Most companies are required to hire more Saudi nationals under a program that stipulates 1 to 5 percent Saudization. Meanwhile, the Ministry of Social Human Resource Development has warned that companies in the light green category will fall into the red category if they do not employ Saudi nationals.
Companies with less than five employees must hire a Saudi national, a notification to this effect has been sent to all employers by the Ministry of Manpower.
As per the revised Nitagad 2021, it has been announced in three phases for three years from December 1. The Ministry has advised that the scheme is for 2022, 2023 and 2024 and all the companies should prepare in advance according to their sector of operation.
All companies in Saudi are classified into 37 categories according to their mode of operation such as retail and wholesale, industry, healthcare, contracting, business services, school, foodstuff, bakala, maintenance, restaurant, coffee shop, transportation.
In percentages to achieve light green this year, 12.08, contract 12.17, maintenance 16.12, wholesale and retail 20.25, restaurant 12.47, fast food 14.08, coffee shop 15.98, bagala 13.46, mobile shop, 1010 financial institutions, road transport, 82. 0.57, Marine 40.57.02 Business Service 30.78, Foreign Schools 4.95, Lab Health Service 23.74, Hotel 22.60, Petrol Pump 8.86, Recruitment Office 74.50, Telecom 25.76, Postal 17.10 and IT 15.
Three to four percent saudiization is required to achieve medium green, three to four percent to achieve dark green, and three to four percent to achieve platinum.
Firms in some sectors are expected to maintain the same level of Saudization next year, with all services being denied category red.
All light green or mid-green companies will nominally hire Saudis to get out of the red category if they soon fade into the red. Earlier, small companies and certain sectors of operations were exempted from Saudization, but this has now been repealed with some reforms.
By eliminating the classification of small, medium and large companies, all companies must hire a certain number of Saudis according to the number of expatriates.