Understanding Saudization and Nitaqat in Saudi Arabia: Key Requirements for Employers

High‑green companies meet Saudization standards and gain broad flexibility in visa management, employee transfers and profession changes. Some advantages include:

• Visa and permit management:
  • The entity can submit applications for the balance of visas across available professions.
  • The entity can renew work permits at any time, provided the Iqama remains valid for at least six months.
  • The entity can issue replacement visas for employees who depart on a final exit visa.
• Employee transfer and professional changes:
  • The entity can transfer foreign employees across all Nitaqat ranges.
  • The entity can change the professions of foreign employees, except for roles reserved for Saudi nationals.
• Operational flexibility and speed:
  • The entity can modify the professions of foreign employees as needed.
  • The entity is counted immediately in the Nitaqat program calculation.
• Business and reputational advantages:
  • The entity benefits from some streamlined administrative processes.
  • The entity holds enhanced market credibility and reputation.

Medium‑green companies comply with Saudization rules and operate without major restrictions, but receive fewer benefits than companies in higher tiers. Some of these benefits include:

• Work permit renewals: The entity can renew work permits for foreign employees.
• Saudization certificate: The entity can obtain a Saudization certificate to strengthen its reputation and competitiveness.
• Job role modification: The entity changes the professions of foreign employees within defined parameters.
• Visa balance applications: The entity submits visa balance applications for available occupations, though the number of new visas may be lower than at higher‑tier companies.
• Service transfers: The entity transfers the services of expatriate employees.

Low‑green companies meet minimum Saudization requirements but face reduced hiring flexibility and limited access to government incentives. Some of the restrictions for low green tier companies include:

• Fewer hiring benefits: Low-green companies face restrictions on hiring foreign employees, unlike platinum and high-green companies.
• More restrictions: Companies in the low green tier are subject to additional limitations compared to higher‑tier organizations, including stricter rules on hiring and visa issuance.
• Fewer incentives: Companies in lower green tiers may not qualify for certain government incentives, tax benefits or financial grants that are typically available to higher‑tier companies.

Red‑tier companies are non‑compliant with Saudization requirements and face significant restrictions on hiring, visa issuance and business operations. Some of these restrictions include:

• Visa and work permit restrictions: Companies in the red zone face significant challenges in issuing new work permits for foreign employees and renewing existing ones.
• Business expansion limitations: Opening new branches or entities may be restricted.
• Ineligibility for government contracts: Red‑status companies are often barred from bidding on government contracts.
• Reputational damage: A red rating negatively affects a company’s credibility within the Saudi business community.
• Increased scrutiny: Entities in the red zone are subject to heightened scrutiny and may face additional inspections and sanctions from the MHRSD.
• Loss of authority over employees: Companies in the red zone lose the ability to prevent employees from transferring to another employer until their Nitaqat rating improves.