A Complete Guide to Saudization and the Nitaqat Program in Saudi Arabia 2025

Saudization and the Nitaqat Program in Saudi Arabia 2025

As part of Saudi Vision 2030, the Kingdom of Saudi Arabia is working to increase the participation of Saudi nationals in the workforce and reduce reliance on foreign labor. At the heart of these efforts is Saudization, also known as localization, supported by a key regulatory framework called the Nitaqat Program.

This guide explains:

• What Saudization really means
• Why the policy was launched
• How the Nitaqat system works
• What can companies do to build a successful Saudization strategy

What Is Saudization?

Saudization, or Nitaqat, is a policy launched by the Ministry of Human Resources and Social Development (MHRSD) to boost the employment of Saudi citizens in the private sector. Under this system, every company must hire a minimum percentage of Saudi employees based on the company’s size and industry.

But Saudization isn’t just about hitting numbers; it’s about:

• Empowering Saudi talent
  
  
• Preparing them for meaningful roles
  
  
• Building sustainable careers in the local job market
  
  

Why Was Saudization Introduced?

For many years, private companies in Saudi Arabia depended heavily on expatriate labor due to lower costs and easier hiring. This led to high unemployment among Saudi nationals, especially the youth.

To fix this imbalance, Saudization was introduced to:

• Reduce unemployment rates among citizens
  
  
• Develop a workforce that supports long-term national growth.
  
  
• Provide stable, valuable job opportunities for Saudis.
  
  
• Bridge the gap between education and job market needs
  
  

Thanks to these efforts, Saudi unemployment dropped to 7% by the end of 2024, ahead of the original 2030 target.

What Is the Nitaqat Program?

The Nitaqat Program is a classification system that assigns companies to different categories based on how well they meet Saudization requirements.

Companies are ranked into five levels:

• Platinum
• High Green
• Medium Green
• Low Green
• Red
  
  

This classification depends on:

• Company size and number of employees
• Industry or business activity
• Percentage of Saudi employees
  
  

Higher-ranked companies get access to services like:

• Work permit renewals
• Visa issuance
• Employee transfer services
  
  

Red-zone companies face strict penalties such as:

• No visa issuance
• No expansion approvals
• No access to government services

Small businesses (Category A, with 5 or fewer employees) fall under a simpler classification, either Green or Red. To stay Green, they must employ at least one Saudi.

How Is the Nitaqat Level Calculated?

There are two methods:

1. Traditional (Average-Based)
   
   
   • Based on the average number of employees over the last 26 weeks
   • Helps balance out sudden changes
     
     
2. Instant Calculation
   
   
   • Updated weekly
   • This applies if a company stays in Low Green or higher for 13 straight weeks
   • Also used for new companies

Who Counts Toward Saudization?

Not all employees count the same toward the Saudization percentage. Here's a breakdown:

Counted as more than 1 Saudi:

• Saudis with disabilities (with official certificate): Count as 4 employees (up to 10%)
• Rehabilitated ex-offenders: Count as 2
  
  

Counted as 0.5 Saudi:

• Saudi students
• Part-time Saudi workers
  
  

Counted as 1 Saudi:

• Remote Saudi employees
• Children of Saudi women
• Gulf nationals
• Stateless tribes ("Bidoon")
  
  

Not Counted:

• Spouses of foreign nationals
  
  

Foreign workers with limited contributions:

• Palestinians with Egyptian passports, Baloch, Burmese: Count as 0.25 of a regular expat, with a cap of 50% of the total workforce
  
  

From Compliance to Empowerment: The Real Goal of Saudization

For many companies, Saudization starts as a compliance task, just following government regulations. But the real opportunity lies in transforming it into a long-term growth strategy.

Instead of asking, “Did we meet the quota?” companies should ask:

• Are we helping Saudi employees succeed and grow?
  
  
• Are they in roles that contribute to our business goals?
  
  
• Do we have the tools to support and develop them?
  
  

5 Ways to Turn Saudization into a Business Strategy

Here’s how HR teams can go beyond compliance and make Saudization a core part of company growth:

1. Redefine Job Requirements

Analyze your current job roles to identify which ones can be localized without affecting operations. Update job descriptions to better match the skills available in the local talent pool.

2. Invest in Saudi Talent Development

Dedicate a portion of your Saudization budget to:

• Graduate training programs
• Technical skill-building
• Partnerships with training centers and programs like Hadaf
  
  

3. Link Saudization to KPIs

Make Saudization rates part of department goals (KPIs) and tie them to leadership performance reviews and incentives.

4. Create Clear Career Paths for Saudis

Assign Saudi employees to roles with defined career development tracks. Show them how they can grow in your company from day one.

5. Monitor Saudi Employee Experience

Regularly collect feedback through surveys and check-ins. Understand what Saudi employees need to feel satisfied, motivated, and committed to the company.

Final Thoughts

Saudization and the Nitaqat Program are more than policies; they’re opportunities. With the right approach, companies can meet legal requirements and build a stronger, more committed local workforce.

By planning ahead, investing in local talent, and aligning Saudization with business goals, organizations can thrive in the evolving Saudi labor market and play a vital role in achieving Vision 2030.