NITAQAT (ZONES) SYSTEM

In a Nutshell[i]

• 41 classifications of employment sectors
• 5 company classifications based on employee tally
• 4 compliance-related and disciplinary zones

5 Company Classifications (based on total employee tally)

1-10 employees

EXEMPT from classifications

Nitaqat system does not apply

10-49 employees

SMALL classification

5-24% Nationalization required

50-499 employees

MEDIUM

6-27% Nationalization required

500-2999 employees

LARGE

7-30% Nationalization required

3000-more employees

BIG

8-30% Nationalization required

4 Compliance-Related and Disciplinary Zones

Blue zone

GREEN zone

YELLOW zone

RED zone

VIP category

INCENTIVES:

• Can hire anybody from any part of the world.
• Easier visa processing
• New visas with open professions through the electronic system.
• Can change professions of their workers even to those that are restricted to Saudis, except jobs such as employment officials, receptionists, government liaison officials, treasury staff, and security officers.
• Condition-free visa transfer: Can hire employees from Red zone and Yellow zones, and transfer their visas without the permission of their employers
• Entitled to a one-year grace period if their municipal and professional licenses or commercial registrations were expired.

Excellent category

INCENTIVES:

• Can apply for new visas once every two months.
• Can change their foreign workers’ profession except to those restricted to Saudis (i.e.human resource managers; liaison officers; cashiers; receptionists; security guards)
• A six-month respite after the expiry of their zakat & revenue certificates.
• Can renew work permits of their employees.
• Can recruit employees in red and yellow zones and transfer their visas without the approval of their employers.

Poor compliance

Punitive Measures:

• No new visas
• Can get only one visa after the departure of two expatriates
• Cannot transfer visas and change professions.
• No work permit renewal for employees who have completed six years.
• No control on workers who can switch over to premium zone companies

Grace Period:

9 months to improve their status.

Non-compliance

Punitive Measures:

Grace Period:

6 months to improve their status.

Under the new policy, foreign workers employed by companies that are not in compliance are free to work for companies in compliance without acquiring permission from their employers at non-complying companies.