Saudi Arabia
Decision to classify work permits for expatriate workers
Impact date: 6 July 2025 The MHRSD has issued a ministerial decision classifying expatriate work permits into three main skill categories: highly skilled, skilled and basic. The decision aims to improve labor market efficiency, attract global talent, and ensure that expatriate workers possess the appropriate skills for their roles. Implementation began on 18 June 2025 for workers currently in Saudi Arabia, and from 1 July 2025 for new arrivals. This initiative aligns with the Ministry’s broader efforts to enhance workforce capabilities, support innovation and contribute to the goals of Saudi Vision 2030 and the National Transformation Program.
Employer implications/action needed Employers must ensure that all expatriate employees meet the required skill levels and qualifications, and update existing work permits according to the new classification system starting 18 June 2025. For new hires, work permits must be classified starting 1 July 2025. Employers should maintain accurate records of employee skills and certifications, and refer to the Ministry’s official guide for detailed instructions and classification criteria to ensure compliance.
Employer risk Failure to comply with the new skill classification system may expose employers to regulatory penalties or administrative actions. Misalignment between employee skills and job requirements can create operational challenges and affect productivity. Non-compliance may also damage the company’s reputation with authorities and potential employees, and cause recruitment issues, making it difficult to hire or retain skilled expatriate workers.
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Saudization of pharmacy professions
Impact date: 27 July 2025 The Ministry of Human Resources and Social Development (HRSD) has issued a decision on implementing the Saudization of pharmacy professions in both the public and private sectors, setting Saudization percentages of: 35% in pharmacies, medical complexes, and clinics; 65% in hospitals; and 55% in other pharmacy activities.
Employer implications/action needed Pharmacy establishments, medical hospitals and pharmaceutical distribution companies must ensure to compliance with the Saudization decision by the impact date.
Employer risk Failing to comply with the decision may lead to penalties and suspension from Ministry services. Penalties for non-compliance include financial fines of up to 100,000 SAR and business closure for 30 days, with the possibility of permanent shutdown in severe cases.
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Saudization of dentists professions
Impact date: Phase 1: 27 July 2025. Phase 2: 27 January 2026 A Ministry of Human Resources and Social Development (MHRSD) decision mandates the Saudization of dentistry professions in private sector establishments on a phased basis.
Employer implications/action needed Medical hospitals and dentist industries must ensure to comply with the Saudization decision by the phased impact dates.
Employer risk Failing to comply with the decision may lead to financial penalties, and suspension from Ministry services. Penalties for non-compliance include financial fines of up to 100,000 SAR and business closure for 30 days, with the possibility of permanent shutdown in severe cases.
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Saudization of technical engineering professions
Impact date: 27 July 2025 A Ministry of Human Resources and Social Development (MHRSD) decision requires establishments employing workers in technical engineering professions to comply with a minimum 30% Saudization rate.
Employer implications/action needed Employers in the engineering fields must review their workforce structures to ensure that at least 30% of employees in technical engineering professions are Saudi nationals by the impact date.
Employer risk Failing to comply with the decision may lead to financial penalties, and suspension from Ministry services. Penalties for non-compliance include financial fines of up to 100,000 SAR and business closure for 30 days, with the possibility of permanent shutdown in severe cases.
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Employee absence from work in private sector establishments
Impact date: 31 July 2025 The new rules provide expatriate workers with a 60-day window to either transfer to a new employer or exit the Kingdom after an absence-related contract termination request is filed. These changes align with broader Government initiatives such as the Wage Protection System, the Contractual Relationship Improvement Initiative and the Wadi Program.
Employer implications/action needed The employer obligations are based on the regulatory update issued by the MHRSD on 30 July 2025, implemented via the Qiwa platform from 31 July 2025. These procedures fall under the Ministry’s authority to regulate private sector labor practices, specifically regarding employee absences and contractual termination, and align with initiatives such as the Wage Protection System, the Contractual Relationship Improvement Initiative, and the Wadi Program.
Employer risk Employers who do not comply with the updated regulations may face administrative penalties or system restrictions, financial liability for unpaid compensation during transfers, operational disruptions due to mismanaged absences and reputational damage with authorities, employees and business partners.
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Saudization of accountants professions
Impact date: 27 October 2025 A Ministry of Human Resources and Social Development (MHRSD) decision mandates a 70% Saudization rate for accounting professions, implemented gradually over five years from October 2025.
Employer implications/action needed Employers in the accounting fields must review their workforce structures and work to ensure 70% of employees in accounting professions are Saudi nationals.
Employer risk Failing to comply with the decision may lead to financial penalties, and suspension from Ministry services. Penalties for non-compliance include financial fines of up to 100,000 SAR and business closure for 30 days, with the possibility of permanent shutdown in severe cases.
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