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IMPACT – MEDIUM
What is the change? Saudi Arabia has announced plans to eliminate the Nitaqat yellow category.
What does the change mean? Companies currently categorized in the yellow category will be moved later this month to the red category and will not be able to renew work permits, apply for residence permits, apply for block visas or submit commercial registrations until they move to a green category.
Background: The Nitaqat color-grading system is used to rank employer compliance with the “Saudization” regulations. Currently, employers in the yellow category are able to apply for residence permits and renew work permits for employees who have not yet completed two years of service. Once transferred to the red category, however, employers will not be able renew work permits or apply for residence permits. Similarly to employers in the yellow category, they will not be able to apply for new block visas, hire non-Saudi nationals, or transfer sponsorship. Additionally, commercial registrations will be blocked until the company moves to a green category.
Analysis & Comments: Companies currently in the yellow category should improve their Nitaqat ranking as soon as possible to avoid moving to the red category. If they are moved into the red category, employers will not be able to hire non-Saudi nationals, renew current work permits or apply for residence permits for current employees.
Source: Deloitte. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities. DTTL (also referred to as “Deloitte Global”) and each of its member firms are legally separate and independent entities. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more. Deloitte Legal means the legal practices of Deloitte Touche Tohmatsu Limited member firms or their affiliates that provide legal services. For legal, regulatory and other reasons, not all member firms provide legal services. This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms or their related entities (collectively, the “Deloitte network”) is, by means of this communication, rendering professional advice or services. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser. No entity in the Deloitte network shall be responsible for any loss whatsoever sustained by any person who relies on this communication. © 2020. For information, contact Deloitte Touche Tohmatsu Limited.
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