Nine years into Vision 2030, the results are real. Non-oil GDP sits at 56%, up from 40% at launch. The economy has roughly doubled, from $650 billion to $1.3 trillion. Saudi national unemployment fell from 12.3% to 7.2% in Q4 2025, close to the Vision target of 7%. Female workforce participation has nearly doubled. The Public Investment Fund held $941.3 billion in assets at end-2024, per the Vision 2030 Annual Report.
None of that is backdrop. It is the operating environment foreign companies are entering.
The compliance framework your workforce strategy runs on — Saudization quotas, Labor Law obligations, GOSI contribution rates, MISA licensing, residency pathways — all traces back to this agenda. What changed over nine years, and what is still changing, determines whether your market entry holds or costs you a restructure.
What the Labor Law Amendments Now Require of Employers
Saudi Arabia’s Labor Law has been amended twice since 2016. The 2022 reforms are the ones most employers notice first: maternity leave went to 12 weeks at full pay, paternity leave came in at three days, probation periods were capped at 180 days, and housing and transport allowance obligations were codified.
The February 2025 amendments went deeper. Under Royal Decree M/44, amended Article 42 removed the fixed statutory training rate for employers with 50 or more workers and replaced it with a percentage set by ministerial decision. Saudi employees completing employer-funded studies count toward it; implementing regulations set the qualifying criteria. Until the relevant ministerial decision is confirmed for your sector, the training obligation is live but the number is not yet fixed. Check with MHRSD before putting any training budget figure into a workforce plan.
Every employment contract in Saudi Arabia needs to reflect current provisions. Contracts drafted against pre-2022 rules are non-compliant — not just outdated, but the basis for disputes and inspection findings. Silberson’s Global Workforce Solutions team structures Labor Law-compliant contracts as part of every EOR engagement in the Kingdom.
How Nitaqat Determines What Your Saudi Operation Can Actually Do
Nitaqat classifies every private-sector establishment by sector, size, and Saudi national employment ratio. Your band — Platinum, High Green, Low Green, Yellow, or Red — controls whether you can transfer expatriate visas, issue new work permits, and access Ministry services. Fall below your sector threshold and those channels close.
April 2026 brought the most aggressive wave of localization decisions in years. MHRSD mandated 100% Saudi national staffing across 69 administrative support roles: secretarial, translation, data entry, and general admin — positions foreign companies have typically filled with expatriates without a second thought. Phase 1 (19 roles) took immediate effect. Phase 2 (50 roles) kicks in October 5, 2026. Marketing and sales Saudization rose to 60% for companies with three or more workers in those functions, with a SAR 5,500 minimum monthly salary (~$1,466) for a Saudi employee to count toward the quota.
These are not isolated decisions. Engineering localization increased to 30% for companies with five or more accredited engineers. Procurement went to 70% across 12 roles. Both carry 2026 deadlines. Our Saudization 2026 guide covers each sector with the specific dates.
Nitaqat ratings update in near real time through Qiwa, the MHRSD platform where employment contracts, work permits, and Saudization status are managed. Companies that treat this as an annual review find out the hard way during a headcount push.
Compliance note: Sector-specific Saudization requirements vary by industry, company size, profession, and implementation phase. MHRSD has continued revising localization targets and now requires Qiwa-documented contracts for Saudization calculations. Verify current quotas directly through MHRSD and Qiwa before relying on any published figure.
GOSI Contributions: Two Systems, One Payroll — Know the Difference
Saudi Arabia’s new Social Insurance Law (Royal Decree M/273) did not replace the existing GOSI system. It created a second one, running alongside it. Which system applies to each Saudi national employee comes down to one date: July 3, 2024.
Employees with any GOSI contribution history before that date stay on the old system. Rates unchanged. Saudi nationals who entered the workforce on or after July 3, 2024 fall under the new system, with annuity contribution rates rising every July through 2028.
For new-system employees, the current rate (July 2025 to June 2026) is 10.25% employee / 12.25% employer on annuities. On July 3, 2026 that goes to 10.75% / 12.75%. Add SANED (1% each) and Occupational Hazards (roughly 2%, employer only), and total employer cost on a new-system Saudi hire sits at 15.25% of contributory salary today, rising to 15.75% in July. Contributory salary is basic plus housing allowance. Transport and other allowances do not count.
Get the system wrong and you are either under-contributing (GOSI penalties) or over-deducting from the employee’s salary — and they will notice. Our Saudi GOSI rates guide covers the full rate table including the July 2026 increase.
Compliance note: Confirm the current applicable rate at gosi.gov.sa before payroll implementation. The rate depends on which system the employee falls under, not a single published percentage.
MISA Licensing and the RHQ Program: Your Two Entry Paths
Every foreign company operating commercially in Saudi Arabia needs a MISA investment license. In 2024, MISA issued 14,303 of them, up 67% year on year. The 2025 Investment Law moved the entry model toward registration-first, which reduces setup friction for most sectors. Most sectors now allow 100% foreign ownership, though restricted sectors still require local participation.
The Regional Headquarters program is a different instrument, and it matters most to multinationals that want access to Saudi government contracts. Since January 2024, companies without a Saudi RHQ cannot bid on government work above SAR 1 million (~$266,000). That one rule drove 125 new licenses in Q1 2024 alone, a 477% year-on-year jump. By October 2025, Investment Minister Khalid Al-Falih confirmed 675 international companies had established regional headquarters in Riyadh, ahead of the program’s original target of 500 by 2030. Amazon, Google, Microsoft, PwC, Deloitte, and BlackRock are on that list.
What RHQ-licensed entities receive:
- 0% corporate income tax and 0% withholding tax for 30 years on eligible RHQ activities, per the ZATCA tax rules published February 2024
- 10-year exemption from Saudization requirements
- Unlimited visa issuance
- Professional accreditation waivers for employees holding valid credentials in their home countries
- Premium Residency eligibility for senior executives and their families
One constraint the incentives do not offset: an RHQ license permits no commercial activity. Revenue-generating operations need separate commercial registration. Companies that try to run commercial work through an RHQ end up with a compliance problem, not a market entry structure. Get the entity architecture right before operations start. Silberson’s Business Support Services team handles MISA licensing and RHQ structuring.
Compliance note: Verify current MISA excluded sectors and 2025 Investment Law implementing regulations directly with MISA before advising on ownership structure and licensing pathway.
Premium Residency: What It Changes for Talent Acquisition
Saudi Arabia expanded its Premium Residency program in January 2024, going from two categories to seven: investors, entrepreneurs, talent, real estate owners, retirees, gifted individuals, and family members of existing holders. PR holders can sponsor dependents, open businesses, own property, and leave the Kingdom without employer sign-off. That last point is what a standard Iqama does not give you.
For companies bringing in senior expatriate talent, this changes the conversation. A Premium Residency holder is not tied to you as an employer. The residency does not lapse when employment ends, which means they negotiate from a different position — and they know it. More than 40,000 applications were filed between January 2024 and July 2025, so the program is genuinely running, not a pilot.
Silberson’s Global Mobility and Immigration team processes Premium Residency applications alongside standard Iqama and work permit processing.
85% Complete: What the Remaining Gaps Mean for Your Operation
In October 2025, Investment Minister Khalid Al-Falih confirmed 85% of Vision 2030 initiatives were complete or on track. The gaps that remain — non-oil export share at roughly 22% against a 50% target, private sector GDP at 47% against 65% — are where the government is still pushing hard.
That pressure lands on private-sector employers. Saudization obligations will keep tightening. Training mandates will keep expanding. Companies that structure their Saudi workforce correctly from day one are not being overcautious. They are reading the direction of travel accurately.
Frequently Asked Questions
Can a foreign company hire in Saudi Arabia without setting up a legal entity?
Yes, through a compliant Employer of Record. An EOR acts as the legal employer in Saudi Arabia, managing payroll, GOSI contributions, Labor Law-compliant contracts, and Iqama sponsorship. This is the standard structure for companies testing the market or scaling without the cost and time of entity setup. Silberson operates as an EOR across Saudi Arabia, UAE, and Bahrain.
What is Nitaqat and how does it affect our ability to hire expatriates?
Nitaqat is Saudi Arabia’s Saudization classification system. Every private-sector employer is rated by sector, company size, and the proportion of Saudi nationals in their workforce. Your band directly controls access to new work permit issuance and expatriate visa transfers — Yellow and Red classifications restrict those channels. Ratings update in near real time through Qiwa, not annually.
What is Qiwa?
Qiwa is the MHRSD digital platform through which private-sector employers in Saudi Arabia manage employment contracts, work permits, visa transfers, and Saudization status. Employment contracts must be documented in Qiwa to count toward Saudization calculations, making it the operational centre of workforce compliance in the Kingdom.
What is the difference between a MISA license and an RHQ license?
A MISA investment license permits commercial activity — generating revenue in Saudi Arabia. An RHQ license lets a multinational establish a regional management hub but prohibits commercial activity through that entity. Companies that want to operate commercially and qualify for RHQ benefits need both. Running revenue-generating work through an RHQ alone is non-compliant.
What are the current GOSI contribution rates for Saudi employees?
Two systems operate in parallel. Saudi nationals with any GOSI history before July 3, 2024 remain on the original contribution structure with unchanged rates. Those who entered the workforce on or after that date fall under a new system with annuity rates rising annually through 2028: 10.25% employee / 12.25% employer from July 2025, rising to 10.75% / 12.75% from July 3, 2026, plus SANED (1% each) and Occupational Hazards (~2%, employer only). Verify the full schedule at gosi.gov.sa before payroll implementation.
What is Saudi Premium Residency and how does it differ from a standard work permit?
A standard Iqama ties a foreign national’s residency to their employer and lapses if employment ends. Premium Residency is employer-independent: holders can sponsor family members, own property, open businesses, and exit the Kingdom without employer involvement. The program has seven categories. For senior expatriate hires, it changes both the employment relationship and the negotiation.
Does the Saudi Arabia RHQ program apply to all foreign companies?
No. The mandate applies to foreign companies that want to contract with Saudi government entities above SAR 1 million (~$266,000). If your Saudi revenue is entirely private-sector, the RHQ requirement does not apply — though the 30-year tax holiday and 10-year Saudization waiver may still make it worth evaluating. An RHQ requires at least 15 full-time employees in Saudi Arabia, including three corporate executives, within the first year.
This article is for informational purposes only. Saudi Arabia’s labor, investment, and immigration regulations change frequently — verify all figures and requirements against current official sources or seek professional advice before acting.
Working through Saudi Arabia market entry — or already in-country and managing compliance changes? Silberson advises on EOR structures, Nitaqat band management, GOSI payroll configuration, MISA licensing, and Labor Law-compliant employment contracts across the GCC. Speak with our KSA team.
