The Saudi Arabian Ministry of Labour (MOL) has introduced a local labour market test, and has dramatically increased the fees for several visa types, in an effort to improve the country”s “Saudization” policy.
Taqat introduced to aid Saudization
Over 90% of private sector jobs in Saudi Arabia are filled by foreign labour, despite the fact that unemployment in Saudi nationals has reached highs of 12% in recent years.
As a result of this ongoing issue Saudi Arabia introduced their “Saudization” policy, which aims to replace foreign workers in the private sector with Saudi nationals. In 2005 it was announced that the target for Saudization in the private sector was 75%, however, this rate is much lower in other sectors. In 2009, the Ninth Economic Development Plan was published. It was announced in 2014 that one of the targets within the Ninth Development Plan, to bring unemployment in Saudi nationals down to 5.5% between 2010 and 2015, had not been successfully reached.
In light of these disappointing figures, the MOL last month launched a new online portal named “Taqat”, which has been in development since 2009. Taqat is an online portal, intended to sustain and develop the local labour force. Taqat lists over 1,500 Saudi job posts, which Saudi nationals now have first refusal to view and apply for before they are offered to foreign nationals. Accordingly, Saudi employers are required to post all available positions to Taqat prior to applying for any block visas for foreign workers.
Although this new initiative is a great opportunity for Saudi nationals to find work in the private sector, employers will now notice a delay in recruiting foreign workers for their job posts.
Under the “Block Visa Scheme”, it typically takes three to four months from the time that an employer files their block visa application to the time that the foreign workers receive their individual work visas and are ready to work. This timeframe is now likely to be considerably lengthened, as employers are now expected to post their available positions on Taqat for a suitable length of time, and local applicants must be considered. As yet, the MOL has not released guidelines on these factors, but employers should be prepared, as part of their block visa application, to provide:
- Proof of the Taqat job posting
- How long it was listed
- The number and credentials of any local applicants
- The reason that local candidates were not accepted for the post
Visa fees increased from 2nd October
From 2nd October the fees for several visa types will be increased quite considerably, as well as some new fees being introduced. The Saudi Press Agency has reported that these new fees will be introduced as part of a larger scheme to boost revenue from sources other than the oil industry, which has recently experienced a drop in value.
Along with the new Taqat procedures, this increase in visa costs will undoubtedly add to the obstacles experienced by employers who employ foreign nationals.
The table below illustrates the change in fees for the following visa types:
It is important to note that US nationals will continue to be granted five-year multiple entry visit visas for a fee of SAR 500, as per existing bilateral agreements.
The new fees are significantly higher than the current fees, and new fees have been introduced which all employers should take into account when arranging visas for foreign nationals.
It is worth noting that the state will bear the visa costs for any individual coming to Saudi Arabia to perform Haj or Umrah for the first time. On an individual”s second and any subsequent visit thereafter in this respect, the visa fee of SAR 2000 will be the responsibility of the individual.
The new Taqat initiative will no doubt prove beneficial to Saudi nationals, who will now have the opportunity to fill job posts before they are offered to foreign workers. This will also aid the country”s initiative to reduce national unemployment rates. Conversely, the Taqat, along with the drastic increase in visa fees, may be detrimental to employers as it will now be more costly and more time-consuming for them to recruit foreign nationals in the private sector.
Although no guidelines have yet been released regarding the local labour test process, it would be good practice for employers to begin revising their recruiting practices to include posting of job posts on Taqat and keeping documentation as proof of this, for presenting to the MOL when applying for block visas.
With regard to the increased visa fees being introduced next month, it would be prudent for employers to examine their budgets and manage their business travel plans for foreign nationals so as to minimise the costs as much as possible.
For further information on the topics discussed above, or for advice on Saudi Arabian immigration in general, please contact us at firstname.lastname@example.org.