Saudi Arabia Introduces New Work Permit System

Saudi Arabia has launched a new points-based work permit system for non-Saudi employees, marking a significant shift in expatriate labour policy aligned with the goals of Vision 2030.

Key features of the reform:

• Two‑phase rollout:
  • Phase 1: Effective July 5, existing expatriate workers must now be classified according to the new system.
  • Phase 2: Starting August 3, the classification will apply to all new foreign workers entering the Kingdom.
• Skill-level categories:
  Employees are classified into “high-skilled,” “skilled,” or “basic” tiers based on a combination of criteria including education, professional experience, technical skills, wages, and age.
• Points-based assessment:
  Workers earn points for each criterion, and those exceeding a designated threshold qualify for higher-tier permits. The system offers flexibility, allowing strengths in some areas (e.g., extensive experience) to offset deficiencies in others (e.g., formal education).
• Automated processing with recourse:
  The Ministry of Human Resources and Social Development (MHRSD) will use an automated platform to assign skill levels based on employer data. Employers retain the right to request reclassification if needed.

Why it matters:

• Boosting economic transformation: The reform is designed to regulate the expatriate workforce, enhance productivity, and support national competitiveness by attracting global talent, particularly in industries like AI, healthcare, engineering, and ICT .
• Protecting local jobs: Encourages Saudization by prioritizing higher-skilled foreign hires, while lower-skilled roles will face stricter scrutiny—potentially reducing opportunities for mid- and entry-level expatriates.
• Positive but cautious reception: HR experts welcome the system’s flexibility, but raise concerns regarding its execution. “If you are high‑skilled and well‑paid, you are fine. But if you are low‑skilled or borderline, you are at risk,” warns Nevin Lewis of Black & Grey HR.

Implementation timeline at a glance:

• June 18: Initial classification began for existing expats.
• July 5: System fully applied to the current expatriate workforce.
• August 3: All new work permit applicants will be classified under the new system.

Industry outlook:

Analysts believe the reform could catalyze labour market efficiency and facilitate knowledge transfer to Saudi nationals. However, much depends on MHRSD’s implementation and administrative clarity. Employers must now align job descriptions, salaries, and documentation to meet the new regulatory standards.

Summary:

Saudi Arabia's new permit system signals a transformative approach to managing its expatriate workforce—balancing global talent recruitment with domestic employment goals, while embedding flexibility through a nuanced, points-based model.

Let me know if you'd like an analysis of the impact on specific professions, interpretation of the evaluation thresholds, or comparisons with work-permit regimes in other GCC countries.