What is Saudisation? Requirements, Challenges, Tips for Businesses
What is Saudisation? Requirements, Challenges, Tips for Businesses
Imagine you're a business owner in Saudi Arabia. You’ve worked hard to establish your company and find success in this developing market. Then, you hear the term Saudisation. Before you know it, you’re faced with new regulations demanding you hire more Saudis to keep your business operating. Where do you start? How do you comply? How to get a GOSI Certificate? This guide will help answer those questions and more. Inside, we’ll cover Saudisation’s definition, requirements, tips for compliance, and the challenges you may face along the way.
Cercli’s global HR platform can help you get familiar with Saudisation and its requirements. With its extensive library of resources, you’ll find the information you need to comply with regulations and get back to business.
What is Saudisation?
Saudisation, officially known as the Saudi Nationalisation Scheme, is a longstanding and significant policy aimed at increasing employment opportunities for Saudi nationals. Established by the government of Saudi Arabia, this initiative supports broader goals under the country’s Vision 2030 programme, which seeks to diversify the economy, reduce reliance on oil, and create a more self-sustaining and inclusive labour market.
Why Saudisation Matters
Historically, the Kingdom has relied heavily on expatriate workers to support sectors, such as:
- Construction
- Hospitality
- Healthcare
- Retail
While this international workforce has contributed to the country’s rapid development, it has also presented challenges, particularly in terms of unemployment among Saudi citizens and gaps between available roles and the skills of local job seekers.
Empowering Saudi Talent
Saudisation addresses these issues directly. It promotes the recruitment, training, and advancement of Saudi nationals across the private sector, with an emphasis on empowering citizens to assume leadership roles, enhance their technical abilities, and contribute to sustainable economic development.
How the System Works
Under Saudisation, the Ministry of Human Resources and Social Development (MHRSD) assigns mandatory employment quotas to private sector firms based on their size and industry. These quotas are designed to reflect both the strategic importance of specific sectors and the availability of skilled Saudi professionals.
To monitor compliance, companies are categorised into colour-coded bands under the Nitaqat system:
- Red Zone: 0% to 16.21%
- Low Green Zone: 16.22% to 19.25%
- Medium Green Zone: 19.26% to 23.11%
- High Green Zone: 23.12% to 26.51%
- Platinum Zone: 26.52% to 100%
A Saudisation (Nitaqat) certificate is issued to compliant companies and is required to access certain government services, bid on public contracts, and renew work permits. The certificate not only reflects a company’s legal standing but also reinforces its reputation as an employer aligned with national priorities.
Recent Updates and Sector Expansion
In 2025, Saudi authorities expanded the scope of Saudisation, adding 269 additional professions to the programme. These include a range of roles in healthcare (such as dentistry and pharmacy), financial services (notably accounting), and engineering, among other areas. The changes are being rolled out throughout the year, with dedicated support provided to businesses to help them meet new requirements.
The updates reflect the Kingdom’s strategic emphases on upskilling, reducing unemployment, and ensuring Saudi nationals are equipped to thrive in both traditional and emerging sectors.
Saudisation Requirements for Businesses
Businesses operating in the Kingdom of Saudi Arabia must follow specific Saudisation rules. These requirements are designed to increase employment opportunities for Saudi nationals. The rules vary by company size, sector, and type of licence.
These are enforced under the Nitaqat system. Understanding and adhering to these requirements is crucial for maintaining compliance and continuing to access public sector contracts and government services.
How Is Saudisation Calculated?
The Saudisation percentage for a business is determined through a weighted formula that considers:
- Number of Saudi employees on the payroll
- Total number of employees within the company
- Specific economic activity under which the company is registered
This calculation results in a percentage figure that places the company into a Nitaqat band (Red, Low Green, Medium Green, High Green, or Platinum), reflecting its level of compliance with Saudisation targets.
Key Thresholds and Examples
For new international companies establishing operations in Saudi Arabia, the second employee after the general manager must be a Saudi national. A single Saudi employee is sufficient for firms with up to five employees in total.
Companies employing more than 100 people are generally required to meet a Saudisation rate of at least 30%. Some sectors or licence types require full (100%) Saudisation for specific job categories. Saudisation thresholds can vary depending on the nature of the company’s activities.
Impact on Government Engagement
Firms that do not meet their Saudisation targets cannot obtain a valid Saudisation certificate. This certificate is required for bidding on Etimad (the government procurement platform) and for accessing various services provided by the Ministry of Human Resources and Social Development.
Special Provisions and Considerations
Several rules affect how individual employees contribute to a company’s Saudisation score:
- Saudi employees earning less than SAR 4,000 per month count as only 0.5 towards the quota.
- One Saudi employee with a registered disability counts as four employees towards the quota.
- GCC nationals are treated as Saudi employees for Saudisation.
- If a Saudi national is registered with two employers, only the first company benefits from their inclusion in the quota.
Reserved Occupations
Specific roles are exclusively reserved for Saudi nationals and may not be filled by expatriates under any circumstances. These include:
- Senior Human Resources Manager
- Personnel Specialist
- Recruitment Clerk
- Government Relations Officer
- Director of Labour Affairs
What This Means for Employers
Understanding and planning for Saudisation is not just about compliance; it’s also a practical necessity for business continuity in Saudi Arabia. Companies must proactively monitor their headcount, payroll, and activity classification to ensure they meet their quotas and maintain their Nitaqat status.
The implications of noncompliance include fines, service restrictions, and disqualification from public sector work. Staying informed, maintaining accurate employee records, and regularly reviewing HR policies will enable employers to navigate the system effectively and support the broader goals of the Kingdom’s Vision 2030.
Cercli: The Ultimate HR Platform for MENA Businesses
Transform your HR operations with Cercli, which is aligned with the UAE’s vision for business excellence. It is the only platform built specifically for MENA businesses that unifies workforce management needs in one powerful system.
Manage your entire team, whether local or global (Cercli supports payments in 150+ countries), with our comprehensive solution that handles multi-currency payroll, leave management, onboarding, and compliance documentation tailored to the unique requirements of the MENA region.
Streamlined HR for MENA Businesses
Eliminate the complexity of using multiple fragmented tools and enjoy the efficiency of a single source of truth that keeps your business fully compliant with local regulations while simplifying every aspect of workforce management.
Whether you're managing a growing team of 25 or coordinating 500+ employees across multiple countries, Cercli provides the localised expertise and streamlined processes that MENA businesses need to scale confidently and manage remote teams effectively.
Experience the only HR platform truly designed for the way you do business in the Middle East. Book a demo to speak with our team about our global HR system today.
Related Reading
Benefits of Complying with Saudisation
Companies that achieve and maintain strong Saudisation levels are rewarded with priority access to government services. This includes faster processing times for business-related documentation, such as:
- Commercial licences
- Permits
- Registration renewals
A compliant Saudisation record also enhances eligibility when bidding for public sector tenders, opening the door to valuable government contracts. Additionally, the issuance of work visas for expatriate employees is generally more efficient for companies that meet their Saudisation obligations, which helps ensure continuity in recruitment and staffing.
Saudisation Improves a Company’s Reputation
Supporting Saudisation is a clear signal that a company is aligned with the Kingdom’s long-term economic and social objectives under Vision 2030. Businesses that demonstrate a commitment to hiring and developing Saudi talent often enjoy stronger relationships with government bodies, better engagement with the local community, and improved employee sentiment.
This reputation as a responsible employer can offer advantages in attracting both Saudi and non-Saudi talent, as well as reinforcing trust with clients and stakeholders.
Financial Incentives for Saudisation Compliance
To encourage broader compliance, the Saudi government has introduced a range of support programmes for employers. Through initiatives like the Human Resources Development Fund (HRDF), eligible companies can access financial subsidies to support the hiring, training, and upskilling of Saudi employees.
These incentives help offset some of the operational costs associated with workforce development, creating a more sustainable pathway for local employment.
Challenges Businesses Face in Saudisation
.avif)
Hiring Saudi nationals, especially for highly specialised roles, can be a time-consuming process. In sectors where experience or niche technical knowledge is required, the availability of Saudi candidates may not always align with immediate hiring needs. This is particularly true for newer industries or roles where the local talent pool is still developing.
Additionally, cultural understanding plays a crucial role in the recruitment process. Many foreign businesses struggle to connect with potential candidates when they are unfamiliar with the preferred methods of communication or expectations during interviews. Missteps in these areas can lead to misunderstandings or missed opportunities to engage qualified Saudi professionals.
Compliance Challenges: Keeping Up with Saudisation Regulations
The Saudisation framework is dynamic, with quota requirements regularly updated across industries and job roles. Ensuring that your company remains aligned with these evolving regulations requires ongoing monitoring and adjustments. Misjudging the required Saudisation percentage or failing to classify job roles accurately can put your Nitaqat rating at risk.
Additionally, the administrative side of compliance can be challenging. Companies are expected to report detailed workforce information through the Nitaqat system, maintain accurate employment records, and be prepared for audits. Failing to meet these responsibilities could result in penalties, delays in service access, or issues with license renewals.
Operational Challenges: Managing Your Workforce in Saudi Arabia
Beyond recruitment and compliance, day-to-day workforce management also presents challenges. Running payroll in Saudi Arabia requires strict adherence to wage protection and social insurance laws, as any misalignment can impact employee satisfaction or lead to legal issues. Sponsoring Saudi employees for roles may be simpler than for expatriates, but it still requires careful attention to contract types and legal obligations.
In addition, successfully integrating Saudi staff into your organisation calls for tailored onboarding and training approaches. Cultural preferences in communication and professional development must be respected, as the transition may be challenging for both the employee and the broader team.
Related Reading
Practical Strategies to Meet Saudisation Goals
.avif)
Saudisation should not be a compliance task. Instead, it should be embedded into your broader workforce strategy. During recruitment planning, identify which roles can be prioritised for Saudi nationals and map your future hiring to meet sector-specific quotas.
Start with roles that are mandated to be 100% Saudized and expand gradually into other functions. Conduct regular reviews to ensure alignment with the latest Nitaqat guidelines and sector-specific regulations, particularly in high-focus industries such as tourism, healthcare, and finance.
Invest in Upskilling and Internal Training
One of the most sustainable ways to meet Saudisation targets is by developing your Saudi employees internally. Provide structured onboarding, technical training, and clear career paths. Doing so enhances your Nitaqat classification and increases retention.
Tailor your learning and development plans to bridge any gaps between job requirements and the skills available in the local labour market. Collaborating with local training institutions can further improve outcomes and align with national objectives.
Build Local Partnerships and Talent Pipelines
Strengthen relationships with local universities, training centres, and vocational institutes to build a steady pipeline of Saudi talent. Early engagement with students or recent graduates through internships and apprenticeship programmes can help familiarise them with your company and industry.
These partnerships can be particularly effective in sectors where specialised skills are required and the local talent pool is still growing.
Streamline Workforce Operations with the Right Tools
Administrative and compliance tasks related to Saudisation can be time-consuming and error-prone without the proper infrastructure. Cercli supports employers operating across the MENA region by offering a unified HR system designed to simplify workforce management in line with local regulations.
With features like onboarding, multi-currency payroll, compliance documentation, and employee records centralised in one platform, Cercli enables HR teams to track Saudisation quotas more accurately, maintain proper documentation, and remain audit-ready while ensuring a compliant and consistent employee experience across locations.
Related Reading
Book a Demo to Speak with Our Team about Our Global HR System
Transform your HR operations with Cercli, which is aligned with the UAE’s vision for business excellence. It is the only platform built specifically for MENA businesses that unifies workforce management needs in one powerful system.
Manage your entire team, whether local or global (Cercli supports payments in 150+ countries), with our comprehensive solution that handles multi-currency payroll, leave management, onboarding, and compliance documentation tailored to the unique requirements of the MENA region.
Streamlined HR for MENA Businesses
Eliminate the complexity of using multiple fragmented tools and enjoy the efficiency of a single source of truth that keeps your business fully compliant with local regulations while simplifying every aspect of workforce management.
Whether you're managing a growing team of 25 or coordinating 500+ employees across multiple countries, Cercli provides the localised expertise and streamlined processes that MENA businesses need to scale confidently and manage remote teams effectively.
Experience the only HR platform truly designed for the way you do business in the Middle East. Book a demo to speak with our team about our global HR system today.
