Saudization Requirements: Nitaqat Consequences

Nitaqat is an initiative by the Ministry of Labour and Social Development (MLSD) and works towards nationalization of the Saudi workforce. The MLSD has laid out a minimum percentage of Saudi nationals that must be employed by companies of different sizes and introduces a colour coded classification system to categorize different companies depending on their level of Saudization. This article highlights the main consequences of doing business under a specific categorization.

Prior to 27 November 2019, there were five different Nitaqat categories granting different rights to the relevant entity being red, lower green, middle green, higher green, and platinum. This changed on 27 November 2019, as a Ministerial decision deleted the Yellow category so that all entities that were on Yellow were downgraded to Red.

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