Saudi Arabia to reimburse companies struggling with 2017-18 expat fee hikes
Saudi Arabia’s King Salman has approved a scheme to reimburse some of the companies who struggled to pay steadily increasing fees for expatriate work permits in 2017 and 2018, as well as waive fee hikes for some who weren’t able to pay, the labor minister said.
“This initiative will support private sector companies, help them overcome the obstacles and achieve their goals and encourage them to expand employment of Saudi citizens,” Labor Minister Ahmed bin Suleiman al-Rajhi tweeted on Friday.
Only companies that had a higher or equal number of Saudi employees versus expats will be eligible for the reimbursement or waiver of fees, according to the decree. Companies with a lower number of Saudis compared to expats will benefit from the initiative only after they hire more locals, it said.
Reuters reported that the Saudi government will allocate 11.5 billion riyals ($3.1 billion) for reimbursements under the decision, sourcing a classified copy which the agency reportedly obtained.
In its fiscal balance program announced in 2016 and implemented in 2017, Saudi Arabia said it would gradually increase the fees for hiring expatriates and obtaining visas for their dependents to encourage companies to hire more locals.
It also changed the system of payment from an annual work permit renewal to a one-time lump sum payment at the beginning of the year accounting for each foreign worker employed by the company - a so-called collective invoice.
The annual fee hikes, rising gradually to 2020, were seen as crucial to Riyadh’s plan to create more jobs.