Nitaqat and Saudization are essential components of operating in the Kingdom, and without proper knowledge and application of the program, your company is at risk of unnecessary consequences. Many companies are unsure of their Nitaqat requirements and recent changes such as the canceling of the yellow zone in Nitaqat make it vital to know. 

Saudization is the program the Kingdom developed to increase the number of Saudi nationals in the private sector. To measure compliance, the Nitaqat system was created and groups companies into color categories. The compliant categories are; platinum, high green, mid-green, and low green, and these companies are granted benefits that noncompliant companies do not receive. The noncompliant zones recently changed from yellow and red to just red, meaning companies who were in the yellow zone will automatically drop to red. 

The change, initiated by the Ministry of Labour, hopes to stimulate the Nitaqat system and push companies in the red zone to become compliant. This will increase the number of compliant companies and increase employment opportunities for Saudi nationals in the private sector workforce.

Companies in the yellow band who’ve had their benefits revoked will now need to adjust their Saudization plan to become compliant. Noncompliant companies are not allowed work visas, sponsorship visas, changing the profession of employees, renewing work permits, or opening a new branch file with the labor office. To become compliant, companies need to implement a strategy. This compliance strategy could include; setting Saudization goals of when compliance will be reached, employee forecasting to manage when expats contracts are finished and when Saudi nationals can be hired in replacement, and analyzing the company’s long-term employee requirements.

Implementing a Nitaqat check into your strategy will ensure that you are compliant and benefit companies beyond government incentives. As a noncompliant company, you’re at risk of losing high-performing employees to compliant companies as they don’t need employer permission to change the company. This risks client relationships along with employee loss and can make the company seem less trustworthy. It can also have long-term effects on company objectives and success. However, with the right strategy, your company can become compliant and gain a competitive advantage.

The change, initiated by the Ministry of Labour, hopes to stimulate the Nitaqat system and push companies in the red zone to become compliant. This will increase the number of compliant companies and increase employment opportunities for Saudi nationals in the private sector workforce.

Companies in the yellow band who’ve had their benefits revoked will now need to adjust their Saudization plan to become compliant. Noncompliant companies are not allowed work visas, sponsorship visas, changing the profession of employees, renewing work permits, or opening a new branch file with the labor office. To become compliant, companies need to implement a strategy. 

Saudization is a program that promotes Saudi nationals in the private sector. To measure compliance, the Kingdom created the Nitaqat system, which groups companies into color categories. The compliant categories are; platinum, high green, mid-green, and low green. The Kingdom grants these companies benefits that noncompliant companies do not receive. The noncompliant zones recently changed from yellow and red to just red. As a result, companies that were in the yellow zone will automatically drop to red. 

This compliance strategy could include the following; setting Saudization goals, such as when compliance will be reached, employee forecasting, and analyzing the company’s long-term employee requirements.

Implementing a Nitaqat check into your strategy will ensure that you are compliant and benefit companies beyond government incentives. As a noncompliant company, you’re at risk of losing high-performing employees to compliant companies as they don’t need permission to change employers. This risks client relationships along with employee loss and can make the company seem less trustworthy. As a result, it can have long-term effects on company objectives and success. However, with the right strategy, your company can become compliant and gain a competitive advantage.