By Globalization PartnersJanuary 2020
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In recent years, Saudi Arabia has turned its attention to its Vision 2030 program. Under the leadership of Crown Prince Mohammed bin Salman, this program, which consists of over 30 different initiatives divided into three main themes, aims to diversify the Saudi Arabian economy and reduce the Kingdom of Saudi Arabia’s (KSA) dependency on oil.
One goal of this program is to increase the employment of Saudi nationals in Saudi Arabia. For instance, the National Transformation Plan, part of Vision 2030, calls for the creation of 1.2 million private sector jobs for Saudis in the Kingdom by 2020.
To be employed in Saudi Arabia as a foreign worker, you must be sponsored by a Saudi company, a Saudi individual, or a foreign entity properly registered to do business in Saudi Arabia. The employer must show that no Saudi can fill the position that they want the expat employee to fill, and you will need to obtain a work visa.
After the work visa is approved, the Saudi sponsor must then obtain an iqama, which is a work permit and residency card.
What Is the Process of Being Able to Have An Expat Employee Work in the Kingdom?
It starts with a work visa.
Saudi work visas are issued through the Ministry of Labor and Social Development Issues (MLSD). The visa is actually issued by the Saudi Embassy in the country in which a person wishing to work in Saudi Arabia applied for it. So for instance, in the United States, the best place to apply for a work visa is the Saudi Embassy in Washington DC. A potential employee cannot apply for a work visa, however, unless they are sponsored by a Saudi employer.
To acquire a Saudi work visa, you will need the following.
1. A Valid Passport
A passport must be valid for at least the next six months. If an individual applies for a work visa with a passport that expires in two or three months it will not be granted. The passport must have at least two consecutive blank pages, and this cannot include the last few pages of the passport which are only to be used for things like name changes.
Also the passport cannot be torn, frayed, separating, or altered in any way.
2. Color Photographs
An applicant needs to provide two, color, 2” x 2” (passport-type) pictures printed on photo quality paper — no photocopies! This must be taken within the last three months and have an all white background. There is also to be no smiling, no eyeglasses, and no non-religious headgear, and photos must not be stapled, taped, or affixed in any way the picture to the application.
3. A Cover Letter
The US-based company that is hiring the employee to work in Saudi Arabia needs to provide a business cover letter. It needs to be printed on company letterhead and include a US mailing address.
4. A Work Contract in Arabic
The employee must submit a copy of the work contract in Arabic.
5. A Visa Application
The applicant needs to include the actual visa application. It must be completed in block letters using black ink.
6. An Invitation Letter
To obtain a work visa, the potential employee needs an original invitation issued by the KSA Foreign Ministry. The organization or the individual in Saudi Arabia hiring the potential employee is responsible for obtaining the invitation. The letter should be addressed to the Embassy of Saudi Arabia in Washington DC, include the address and phone number of the organization or person employing the applicant in Saudi Arabia, and specify the number of entries you are requesting. You can request single or multiple entries, depending on the nature of your business.
This letter must be stamped by the Foreign Ministry or the organization that is sponsoring the job applicant.
7. A Certificate of Business Registration
The potential employee needs to provide a copy of the business registration for the Saudi company sponsoring them. It must also have a stamp of approval issued by the KSA ministry of foreign affairs.
8. An Enjaz Registration
This is an online registration form that needs to be completed along with the visa application form.
9. A Signed Saudi Laws and Regulations Form
The potential employee needs to provide a signed Saudi Laws and Regulations form. This form basically says that they will observe all the relevant Saudi laws and regulations.
As you can see, Saudi Arabia has one of the most complex visa application processes of any nation. Additional forms and documents may also be required. Before any expat can work in Saudi Arabia, however, there are necessary steps to take.
Once the individual receives their work visa, they can travel to Saudi Arabia and begin to work for the company that hired them. When they arrive in the KSA, their employer then has 90 days to apply for and finalize their iqama application. The employer, not the employee, is responsible to apply for an iqama and pay for it.
What Is an Iqama, and Why Does a Foreign Worker Need One?
Basically, an iqama is the national residency permit that allows expats to work and live in Saudi Arabia while it is valid. Issued by the Ministry of Foreign Affairs, an iqama is only valid for one year, although it can be renewed yearly.
An expat worker must always carry the physical iqama identification card with them. It details who they are, what kind of work they are eligible to do in the Kingdom, the company or the person that is employing them, and how long they are allowed to be in the Kingdom. Failure to carry an iqama identification card at all times can result in heavy fines.
Who Is Responsible for Getting an Iqama?
The employer is basically the only company or individual that can make sure the expat employee is issued an iqama card. Like a work visa, there are several components to obtaining an iqama.
1. Passport and Photos
Upon arrival, the employer will ask for the employee’s passport and for two 2” by 2” color photos. These are needed to complete the iqama application.
2. Medical Examination
Although the employee may have done a complete medical examination when they applied for a work visa, they will need to do another one when they apply for an iqama. It needs to be done by a designated health clinic. The results will be submitted with the employee’s application.
3. Application Forms
The employee will be asked to sign the application forms needed by the Foreign Ministry and pay the necessary fees. Once they’ve done these steps, they will most likely receive their iqama in about two weeks.
This is done when the employee enters the Kingdom by immigration services. This will take a picture of the iris in their eyes, as well as take fingerprints.
What If The Employee Brings Their Family?
Once an expat employee receives an iqama, they can then apply for the rest of their family. In this case, it will not be the employer who applies for the iqamas since a spouse and any children are connected to the employee and not to the employer. A family’s iqamas are basically the same as the employee including information such as legal names, etc. Rather than an employer’s name or job title, though, the iqama cards will show that they are the employee’s dependents.
Limitations and Requirements of an Iqama Card
Although an iqama card grants permission to live and work in Saudi Arabia, there are a few limitations/requirements that it imposes:
1. Legal business
Basically, a card is required to do almost all forms of personal business in Saudi Arabia. An expat employee needs one to rent a home, open a bank account, get a mobile phone, sign up for utilities, rent a car for the weekend — anything that requires a legal transaction requires an iqama card.
As noted above, in iqama card is valid for only one year and needs to be renewed within three days of when it expires and not before. An employer may or may not pay for an employee’s renewal fees. The employee, however, will have to pay for all renewal fees for their family.
3. Renew on Time
It’s crucial to renew an iqama in a timely fashion every year. If an expat employee fails to do this, all their Saudi bank accounts will be frozen until they can show proof of renewal. This can cause a few financial problems while waiting for their iqama to be renewed, so expat employees must make sure they do it on time.
4. Older Dependent Children
If an employee’s son or daughter over the age of 18 wants to come to KSA, they must be a passport holder and will need to obtain a separate visa.
5. Marriage Certificate
For an employee to bring a spouse, they must show legal proof of their marriage. A common-law partner, or a “significant other,” are not allowed to live in Saudi Arabia.
An employer can cancel an iqama at any time. Once an iqama is canceled, the iqamas of an employee’s family are canceled as well.
7. Leaving KSA for a Visit Home
While working in Saudi Arabia under an iqama permit, if an expat employee wishes to leave the country to visit their country of origin or to travel to another country, they must obtain an exit/reentry permit from the Ministry of the Interior. When they have left the country, their employer needs to keep possession of their residence permit.
8. Working Family Members
Even though family members have an iqama identification card, they may not work at any job until they are given permission to do so. This may mean that family members will not be allowed to work during the entire duration of an expat employee’s stay in KSA.
9. Expat Levy
As part of Saudi Arabia’s attempt to make more jobs available for Saudi nationals, in June 2017, it began to charge a tax on foreign residents. Currently, the expat levy stands at SAR 600 per month (about 160 USD per month) for 2019. That total will rise to SAR 800 (about 213 USD per month) in 2020.
In addition, foreign workers whose families also have iqamas must also pay a tax for each dependent. In 2019, that tax will be SAR 300 (about 80 USD) a month for each dependent. In 2020, that tax will be increased to SAR 400 (about 106 USD) a month for each dependent.
This new tax has had an almost immediate impact on foreign workers in Saudi Arabia. In the third quarter of 2017 alone, 94,000 expat workers left KSA.
Changes for Expat Workers and Saudi Nationals in Saudi Arabia
As you can see from the information listed above, obtaining a work visa and then an iqama can be a complex process.
Moreover, you have the decision by Saudi Arabian authorities to push the country toward Saudization. For instance, there is an effort underway by the current regime to allow more women to work in Saudi Arabia. Through the National Transformation Program 2020, the Saudi Ministry of Civil Service has laid out several strategies to achieve that goal.
The government has also begun restricting some jobs to Saudi nationals. For instance, all jobs in the many malls in the Kingdom now must be filled by Saudi nationals. The government also decreed that starting in September 2018, all jobs involving sales activities in the following categories must be filled by Saudi men or women:
- Cars and motorcycles
- Home and office furniture
- Children’s clothing
- Men’s accessories
- Home kitchenware
- Medical equipment and devices
- Electrical and electronic appliances
- Auto parts
- Building materials
Saudi Arabia: Hiring No Longer Impossible
Due to the policies promoting Saudization, it has become almost impossible to sponsor new work permits for employees coming in from outside the country to work in Saudi Arabia for the first time. Yet, trying to hire Saudi nationals to do work in Saudi Arabia is nearly impossible, since the country is already so wealthy and pays ‘reverse taxes’ to its citizens.
Our team set to work to find a solution to help clients hire in Saudi Arabia, and we have found one. Our solution in Saudi Arabia is to help foreign companies recruit employees already residing in Saudi Arabia (who already hold an iqama or work permit), negotiate with them to join our clients’ company, and then transfer those employees to our local partner, and assigning the employees to work on behalf of our client.
To move from one employer to another while in Saudi Arabia, you’ll need a no objection certificate (NOC) from the previous employer. There is no need to worry, however, as all matters related to an employment contract, work permit sponsorship, and compliance with local HR matters are taken care of by Globalization Partners and our local partners. We have a solution! Give us a ring if you need help in the Kingdom.