King Salman reduces business fees on foreign workers

Monday 11th Feb 2019

King Salman

King Salman has approved a new plan to reduce the fees businesses pay on their foreign workers, in order to incentivize business and boost both economic growth and employment in the Kingdom.

This will involve some companies being exempted from paying the 2018 fees on foreign workers, or will reimburse those that have already paid these fees. A key condition of the new tax break is that businesses have made moves to hire more Saudi nationals.

The fees in question were only recently introduced in 2018 as part of a way to increase non-oil revenue for the Saudi Government. This move drew criticism from business owners in the Kingdom, as they were previously accustomed to cheap foreign labor levy-free. This new levy actually contributed to the exodus of hundreds of thousands of expatriate workers, and has had a negative impact on the Saudi economy without making much of a dent in the employment rates of Saudi nationals.

The government has allocated approximately 11.5 billion riyals for the plan, and aims to encourage companies that haven’t done enough to expanded their constituent Saudi national work force. It is estimated that around 350,000 companies will benefit from the plan.

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