Saudi firms fined unless they fire expats
In the past the Middle-East has appealed to career driven expats looking for opportunities, advancement and adventure. But according to a recent report they may soon have to start setting their sights elsewhere.
Saudi Arabia has always been one of the top Middle-Eastern destinations for expats, largely because foreigners working in the nation don’t have to pay tax on their earnings.
In fact, around a third of the total Saudi population is made up of foreigners and as much as 90 per cent of the private sector workforce is foreign. This figure seems particularly shocking when you realise that the nation’s local unemployment level sits above 10 per cent.
Now the Saudi Arabian labour ministry wants to put an end to this over-reliance on expats and give locally born individuals a fairer shot in competitive industries.
Yesterday was the beginning of the Islamic New Year, and the date the Labour Ministry chose to enforce a new policy – one which is bound to trigger debate.
Under the guidelines laid out in the new policy companies which have more foreign workers in their employ than local will be fined.
The company will have to pay roughly £400 per year for every extra foreigner employed.
The Labour Ministry has stressed that it intends to lessen the necessity of expat workers and focus on cultivating local skills, talents and expertise.
A Labour Ministry spokesman asserted: ‘The aim of this decision is to increase the competitive advantage of local workers by reducing the gap between the cost of expatriate labour and local labour.’
This news, whilst good for Saudi nationals, is a real cause of concern for expats intending to emigrate to the Middle East as well as those already living in Saudi Arabia.
Many are concerned that other members of the Gulf Co-Operation Council (which includes Kuwait, Qatar and the United Arab Emirates) might follow Saudi Arabia’s lead.
One Saudi based expat was quoted as saying: ‘The tide is definitely turning against foreign workers. While a lot of the focus is on the low-income workforce that is being drafted in from south-east Asia, these latest measures affect all classes of workers.’