Saudization And Nitaqat: How Can Motaded Ensure That Your Company Stays Green?
Saudi Arabia's Nitaqat certificate has served as the life-blood of the country's ambitious workforce transformation since 2011. This initiative has helped increase Saudi nationals in the private sector to 2.34 million by June 2023. The workforce nationalization shows remarkable progress, and women's participation jumped from 17% to 35.3% between 2016 and 2023. These achievements have surpassed the Vision 2030 target of 30%.
The Saudization certificate system, known as Nitaqat, which is an Arabic word that means ranges, uses six distinct zones to classify companies based on their compliance with national hiring quotas. These zones include Platinum, High Green, Mid Green, Low Green, Yellow, and Red. Businesses with more than nine employees must meet specific Saudi national employment percentages to maintain their status. This complete policy targets reducing unemployment from its 2018 peak of 12.9% to 7% by the start of the next decade and creating 3 million new private sector jobs.
Understanding Nitaqat Certificate Basics
Let's look at everything in the Nitaqat program. The Ministry of Labor launched this program to improve job opportunities for Saudi citizens in the private sector. The 11-year-old program serves as the enforcement mechanism for Saudization policies.
The Nitaqat system looks at three main factors to determine a company's status:
- Business activities registered with the Ministry
- Total number of employees
- Percentage of Saudi nationals in the workforce
The program puts companies into specific color-coded categories based on their Saudization compliance levels:
Category
Saudization Range:
Platinum - 26.52% - 100%
High Green - 23.12% - 26.51%
Medium Green - 19.26% - 23.11%
Low Green - 16.22% - 19.25%
Red - 0% - 16.21%
The Ministry made important changes in May 2021 that include:
- Consolidation of sectors for simplified compliance
- Implementation of a three-year Saudization plan
- Removal of fixed size bands for more flexible workforce management
Companies with green or higher Nitaqat ratings can get the Saudization certificate, which they need for various business operations. This certificate allows companies to participate in government tenders and keep their operational licenses in the Kingdom.
How to Get Nitaqat Certificate
Companies must register with the Ministry of Human Resources and Social Development (MHRSD) to get a Nitaqat certificate. The process needs proper documentation and compliance with requirements.
Companies need to submit these important documents:
- Commercial registration copy
- Tax registration documentation
- Financial statements for previous two years
- Employee list with names, nationalities, and job titles
- Employment contracts
- Payroll records
The MHRSD reviews the application based on the company's Saudization compliance level after submission. Companies that meet requirements successfully receive benefits based on their classification. Platinum and High Green range companies can get new expatriate worker visas and change worker occupations. These companies can also transfer expatriate workers' sponsorship from other entities.
A favorable Nitaqat status is vital for business operations. Red range companies face major restrictions and cannot:
- Issue new work permits
- Change worker occupations
- Transfer sponsorships
- Renew existing work permits
The Saudization certificate helps companies participate in government contracts through Etimad and other public sector projects. New applicants must get a compliance letter from the Ministry of Labor that confirms they follow all labor laws and regulations.
Maintaining Company Nitaqat Status
Private sector Saudization reached 22.3% by the second quarter of 2023, which shows the program's soaring win. A favorable Nitaqat status needs consistent effort and strategic planning to maintain.
Companies must focus on these key strategies to keep their green Nitaqat status:
- Implement regular workforce assessment protocols
- Prioritize Saudi national recruitment
- Develop complete training programs
- Streamline HR processes for compliance tracking
- Maintain detailed employment records
Motaded’s employment solutions make it simple to stay green in the Nitaqat system. We handle the details so you can focus on what matters most
Companies that meet these requirements can access various privileges based on their status level. Platinum and high green-rated entities get maximum benefits, though access levels differ:
Status Level and Their Key Privileges
Platinum/High Green:
New visas, occupation changes, work permit renewals
Medium Green:
Visa transfers, immediate Nitaqat counting
Low Green:
Limited to work permit renewals
Red:
No visa or permit services
Companies face serious risks if they fail to comply. Most businesses lose their ability to get new visas, miss government contract opportunities, and might face financial penalties. Motaded takes the guesswork out of Nitaqat compliance—our employment services ensure your company remains green with minimal effort.
The Ministry updates compliance requirements regularly. Saudi nationals must now earn a minimum wage of SAR 4,000 to count in Saudization calculations. Businesses can maintain their desired Nitaqat status with strategic workforce planning and careful attention to these requirements.
Conclusion
Saudi Arabia's Nitaqat program shows how workforce nationalization can succeed and push toward Vision 2030 goals. The private sector's Saudization has reached 22.3%, which proves the system works well. Women now make up more than 30% of the workforce, and this reshapes the employment scene.
Companies that reach platinum and high green status get major operational advantages. They need to comply with the rules to grow their business. These companies can get flexible visa options and government contracts, which gives them good reasons to keep their Nitaqat ratings high.
Success depends on proper paperwork, regular staff reviews and good planning. Companies must keep up with new rules, like the SAR 4,000 minimum wage for Saudi nationals. This detailed plan will give businesses steady growth and help meet national employment targets. Let Motaded handle your Nitaqat compliance so you can focus on growing your business!