Kingdom of Saudi Arabia development: The third year of the Nitaqat Mutawar program

19 November 2023 - The Nitaqat Mutawar program in the Kingdom of Saudi Arabia (KSA) was implemented by the Ministry of Human Resources and Social Development (MHRSD) in May 2021, aimed to stimulate the private sector establishments to localize jobs and ensure the continuity of Saudi nationals working in the labor market.

The program offers many advantages, represented by a clear and transparent localization plan for a period of 3 years, in order to raise the organizational stability in the private sector, providing clear Saudization rate expectations to give businesses time for strategic workforce planning, fostering regulatory stability and supporting the national workforce.

As we enter the third year of the program, significant changes are on the horizon.  On 1 December 2023, the third year of the program will officially commence, and it is imperative for all companies to ensure they have the correct number of employees, both expatriates and Saudi nationals, to adhere to the new Saudization percentages for each activity.

The program has been a cornerstone in the Saudi Arabian labor market, designed to create regulatory stability, foster the growth of appropriate job opportunities for the local workforce, and establish a secure and attractive work environment for all. The ongoing evolution of the program underscores the commitment of the KSA to enhancing its labor market.

What to expect in the third year of the Nitaqat Mutawar program:

Companies are required to ensure they comply with the new Saudization percentages specific to their respective activities.

Saudization percentages may vary depending on the nature of the business, so it is crucial for companies to stay informed and take necessary actions to align with these new requirements.

As per last year, we expect that the MHRSD will announce the updated Saudization percentages and confirm the official start date in December.

For more information about the program please visit: MHRSD Procedural Guideline to the Nitaqat Mutawar Program 

Deloitte’s view

The third year is a pivotal phase of the Nitaqat Mutawar program. We believe that the program will not only improve the labor market in KSA but also present new opportunities for businesses to thrive and contribute to the national workforce.

In order to avoid being penalized or operations being disrupted, due to non-compliance, companies should review their Saudization plans and ensure they comply with the new Saudization percentages in accordance with their respective activities.

To gain a better understanding of the program's intricacies or for support in achieving compliance, companies can reach out to our Global Employer Services (GES) specialists.