Expatriate levy set for dependents residing in country

IMPACT – MEDIUM

What is the change? Saudi Arabia is set to begin collecting an “expatriate fee” of 100 riyals (about US$27) per month for every foreign-worker dependent residing in the country.

What does the change mean? The new levy will apply to all foreign employees with dependents in Saudi Arabia, regardless of how many local employees their company employs. The levy is set increase to 200 riyals per month in 2018, 300 riyals per month in 2019 and 400 riyals per month in 2020.

• Implementation time frame: The change was implemented July 1.
• Who is affected: Foreign nationals sponsoring dependents in Saudi Arabia.
• Business impact: Foreign employees will be charged directly, though businesses may choose to cover the costs for employees.
• Next steps: Foreign workers will be charged with the levy in a lump sum upon renewal of their Iqama (residence permit).

BAL Analysis: The levies could increase the costs of doing business in Saudi Arabia, particularly for employers who choose to cover the levies for their employees. Employers should take note of the change and make sure their foreign employees are aware of the new charges.

This alert has been provided by the BAL Global Practice group. For additional information, please contact your BAL attorney.

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