Saudi Gazette report

RIYADH — The Ministry of Human Resources and Social Development (MHRSD) revealed that it will coordinate with the Ministry of Investment of Saudi Arabia (MISA) pertaining to its observations and reservations with regard to a draft scheme to divide work permits into three categories based on skill levels. The ministry confirmed that it is working on preparing the final version of the scheme after taking into account and harmonizing with the major views and observations received by it in this respect.

In June 2024, the MHRSD presented, through Istitlaa, the unified electronic platform for polling the opinions of the public and entities under the National Competitiveness Center, a draft amendment to the executive regulations of the Labor Law regarding the division of work permits and visas. The scheme is based on dividing each of the work permits and visas into three categories according to skill levels, which are highly skilled, skilled, and basic. It urged the public and entities to send their feedback on the draft scheme before framing the final shape of the scheme.

In its feedback, MISA expressed its reservations that the project may produce impact on the investment environment and that the interests of local and foreign investors shall be taken into account before implementing such a scheme. It also drew attention to the studies related to the analysis of the current situation and detailed benchmarking, as well as to the systems that will be affected by the proposal apart from the need to comply with international obligations.

MISA also underlined the need to carry out study about the financial impact as well as the business practice in addition to the impact of the proposal on small and medium enterprises. The ministry also stressed the need to review the directive issued by the highest authorities while implementing such a project. There should be thorough examination on how this scheme would impact on the investment environment as well as on local and foreign investors.

Reacting to the reservations expressed by MISA, MHRSD emphasized that the proposal is based on a comprehensive study of the financial, economic and legislative impacts that may result from its implementation, including those on the labor market and various establishments. A benchmark comparison was made with global best practices, and the study showed that there was no significant negative impact on the investment environment as a result of the classification of visas and work permits for expatriates.

The HR ministry stated that the proposed scheme is expected to help commercial establishments in attracting people with skills appropriate to their needs, which will have a positive impact on the business environment in general, including the investment environment, and that the ministry will provide MISA with a summary of that study.

The MHRSD noted that it had presented the proposal to divide work visas according to skill levels to the Labor Market Policies Committee in 2021, and the committee praised the proposal. With regard to establishments, small companies with less than 20 employees were exempted from some of the policies of the new recruitment system.