Guide to Saudi Nationalisation Scheme (Nitaqat)

Understanding Saudization and Nitaqat Program in Saudi Arabia

If you are considering conducting business activities in Saudi Arabia, understanding Saudization or the 'Nitaqat Program' is crucial. This initiative by the Saudi government mandates businesses to reserve a fixed portion of jobs in the private sector for Saudi nationals. Let's delve deeper into what Saudization entails, its significance, benefits, and requirements.

What is Saudization/Nitaqat?

Saudization, also known as the Nitaqat Program, aims to address employment challenges faced by Saudi nationals by ensuring that a share of jobs in the private sector is reserved for them. This program, initiated in 1985, was a response to the influx of expatriate workers drawn to the kingdom's growing economy.

Why is Saudization Important?

Saudization plays a pivotal role in ensuring that Saudi nationals are not excluded from opportunities in Saudi’s rapidly developing private sector economy. By distributing the benefits of private sector growth, including a skilled workforce and higher salary incomes, Saudization contributes to economic inclusivity and diversification, aligning with the goals laid out in Saudi Vision 2030.

Benefits of Saudization

Saudization has the following benefits for the Saudi Arabian economy:

• Reduction of Unemployment: By absorbing Saudi workers into the expanding private sector, Saudization helps keep the unemployment rate in check.
• Development of Skilled Workforce: It facilitates the growth of a skilled Saudi workforce by giving them access to opportunities in the private sector and upskilling programs.
• Diversification of Economy: Saudization supports the diversification of the economy by increasing the share of Saudi nationals employed in the private sector workforce.
• Economic Growth: Increased participation of Saudi nationals in the workforce boosts economic growth by enhancing domestic productivity and demand.
• Social Stability: Saudization fosters social stability by ensuring a balance between local and migrant workers, and enhancing citizens' quality of life.
• Enhancing Investor Confidence: The program builds investor confidence by paving the way for a skilled workforce and fostering competition.

How Does Saudization Work?

The Nitaqat system rates businesses based on their compliance with Saudization regulations. Companies with high compliance enjoy benefits such as streamlined immigration processes, while non-compliant businesses face restrictions on employing foreign workers. This system has evolved to align with the objectives of Saudi Vision 2030.

Do You Want to Learn More?

Understanding Saudization and the Nitaqat Program is indispensable for anyone looking to engage in business activities in Saudi Arabia.?We provide a comprehensive guide to navigating the program in our blog and ensure that you do not miss out on any important details.