Ten years into Vision 2030, the results are real. Non-oil activities made up 55% of real GDP in 2025, and real GDP reached $1.31 trillion, according to the Vision 2030 Annual Report for 2025. Unemployment among Saudis was 6.5% in Q2 2026 (GASTAT). That is below the original Vision target of 7%, which the government has since tightened to 5% by 2030. Saudi women’s labour force participation was 33.7% in the same quarter, above the original 30% target. The Public Investment Fund reported more than $900 billion in assets under management at end-2025.
That is the 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) traces back to this agenda. What changed over the decade, and what is still changing, decides whether your market entry holds or costs you a restructure.
What the Labor Law Amendments Now Require of Employers
The Labor Law amendments that took effect in February 2025 (Royal Decree M/44) are the ones to build contracts around. Paid maternity leave went from 10 to 12 weeks, with six weeks mandatory after birth. Fathers get three days of paternity leave, to be taken within seven days of the birth. Probation can run up to 180 days in total, and the contract must state the period. The old rule was 90 days, extendable to 180 by written agreement.
Amended Article 42 also 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.
Contracts drafted before February 2025 may not reflect these provisions. That is where disputes and inspection findings start. 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 the share of Saudi nationals in its workforce. The bands are Platinum, Green (high, medium, and low), and Red. There is no Yellow band. The Ministry cancelled it in 2019. Your band controls whether you can transfer expatriate visas, issue new work permits, and access Ministry services. Fall into Red and those channels close.
Nitaqat is only one layer. MHRSD also sets profession-specific localization rates, and these are enforced separately. You can hold a Green band and still be penalized for missing a profession quota.
The current round is the most aggressive in years, and it now runs into 2027:
- Administrative support: 100% Saudi staffing for 69 roles, covering secretarial, translation, data entry, and general admin work that foreign companies have typically filled with expatriates. The 19 Phase 1 roles applied from 5 April 2026. The 50 Phase 2 roles took effect on 4 October 2026, and MHRSD says inspections have begun. The procedural guide applies the rule regardless of Nitaqat band.
- Marketing and sales: 60% for companies with three or more workers in those functions, from 19 April 2026. Marketing roles carry a SAR 5,500 minimum monthly wage for a Saudi to count toward the quota.
- Engineering: 30% for companies with five or more engineers, in force from 30 June 2026.
- Procurement: 70% across 12 roles for companies with three or more workers in them, in force from 31 May 2026.
- Accounting: 50% for companies with five or more accountants, from 27 October 2026.
- Sports centres and gyms: 15% across 12 professions for establishments with four or more workers, from 18 November 2026.
- Project management: 70% across three professions for companies with three or more workers in them, from 14 February 2027.
- Technical engineering: announced on 8 November 2026, a 35% rate across 94 occupations from 9 May 2027 for establishments with five or more workers in them.
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.
A Saudi employee currently counts as one full worker toward Nitaqat at a monthly wage of SAR 4,000. The Ministry announced on 25 October 2026 that the threshold rises to SAR 5,000 on 25 April 2027 and SAR 6,000 on 25 April 2028. This is a counting rule, not a minimum wage. A company can lose Nitaqat headcount without losing a single employee.
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 on One Payroll
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 at unchanged rates: 9% annuities from each side, which makes 11.75% for the employer and 9.75% for the employee once SANED and occupational hazards are added. Saudis who entered the workforce on or after that date fall under the new system, where the annuities rate rises every July through 2028.
For new-system employees, annuities were 9.5% from each side from July 2025 to June 2026. From July 2026 they are 10% from each side. SANED adds 0.75% from each side, and occupational hazards adds 2% from the employer only. That puts the all-in rate at 12.75% for the employer and 10.75% for the employee. Contributory salary is basic pay plus housing allowance. Transport and other allowances do not count.
For non-Saudi employees, the employer pays 2% for occupational hazards and nothing is deducted from the employee.
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 must register with MISA. The Investment Law that took effect in February 2025 replaced the old foreign investment license with registration, and MISA now issues an investment registration certificate. Demand was already high under the old regime: MISA issued 14,303 investment licenses in 2024, up 67% year on year. 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, government entities have been restricted from contracting with foreign companies that have no Saudi RHQ. Contracts of SAR 1 million (~$266,000) or less are exempt. MISA issued 127 RHQ licenses in Q1 2024 alone, a 477% year-on-year jump. In October 2025 the then Investment Minister, Khalid Al-Falih, put the number of companies licensed to set up regional headquarters in Riyadh at 675, against an original target of 500 by 2030.
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
- No cap on work visas for RHQ employees
- Professional accreditation waivers for employees holding valid credentials in their home countries, except medical and engineering accreditation
- 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: special talent, gifted, investor, entrepreneur, real estate owner, and the original limited-duration and unlimited-duration residencies. 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. The Premium Residency platform received 40,163 applications between January 2024 and July 2025, and 8,074 permits were issued in 2024 (Saudi Gazette).
Silberson’s Global Mobility and Immigration team processes Premium Residency applications alongside standard Iqama and work permit processing.
90% Complete or On Track: What the Remaining Gaps Mean for Your Operation
The Vision 2030 Annual Report for 2025, published in April 2026, puts 90% of initiatives as complete or on track. Two gaps stand out. Non-oil exports were about 22% of non-oil GDP against a 2030 target of 50%, and the private sector contributed 51% of GDP against a target of 65%. That is 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, and placed in Platinum, Green, or Red. A Red classification restricts new work permits and expatriate visa transfers. 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 registration (the former investment license) permits commercial activity, meaning revenue generated 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 structure, with 11.75% for the employer and 9.75% for the employee. Those who entered the workforce on or after that date are on the new system, where annuities rise by 0.5 percentage points on each side every July through 2028. From July 2026 the all-in rate is 12.75% for the employer and 10.75% for the employee. 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. Under the ZATCA guideline, an RHQ must have at least three employees at executive director or vice president level and an adequate number of full-time employees for the scale of its activity.
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.
