February 25, 2025

Saudi Arabia introduces stricter Saudization rules

February 25, 2025

Saudi Arabia introduces stricter Saudization rules

Saudi authorities have announced higher Saudization rates for private sector roles in accounting, dentistry, engineering, and pharmacy. Businesses in these industries must prepare for phased workforce adjustments or risk penalties, including restrictions on employee transfers and work permit renewals.

In the dentistry sector, companies with at least three dental professionals must meet a 45% Saudization rate by 27th July 2025, increasing to 55% by 27th January 2026.

Engineering businesses with at least five engineers must reach a 30% Saudization rate by 27th July 2025.

In the accounting sector, businesses with at least five accountants will need to comply with a 40% Saudization requirement by 27th October 2025, with an annual increase of 10% until reaching 70% by 27th October 2028.

Smaller accounting firms with three to four accountants will need to meet a 30% requirement by 27th October 2029. The pharmacy sector will also see changes from 27th July 2025, with Saudization levels set at 65% in hospitals, 35% in community pharmacies and medical complexes, and 55% in other pharmacy-related businesses.

Alongside these workforce nationalisation efforts, Saudi Arabia has introduced key employment reforms. Written contracts are now mandatory for non-Saudi employees, ensuring clear terms and job security.

Employees on fixed-term contracts have also been granted the right to resign with 30 days’ notice, enhancing workforce flexibility. Notice and termination rules have been revised to create a more structured and fair approach, including extended objection periods for disciplinary actions.

Leave entitlements have been expanded, with longer maternity leave, new paternity leave provisions, and bereavement leave that now includes the loss of a sibling. Stricter enforcement measures will hold businesses accountable for compliance with these Saudization policies.

Should you have any queries regarding the above information or if you require assistance with your corporate, employment or immigration matter, please get in touch with a legal professional at Hudson McKenzie via email at londoninfo@hudsonmckenzie.com or by telephone +44(0) 20 3318 5794.

The information provided does not amount to legal advice.

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