Staffing & Employment Laws in Saudi Arabia: A Complete Guide for Foreign Companies

Partner with The Saudi Gate to Hire, Manage, and Comply with Confidence

Saudi Arabia is becoming an increasingly attractive destination for global companies seeking to expand into the Middle East. With the Kingdom’s ongoing economic diversification, large-scale infrastructure projects, booming tech and manufacturing sectors, and business-friendly reforms under Vision 2030, foreign investors and multinational companies are exploring opportunities to establish operations in the Saudi market.

However, one of the most crucial elements to successful expansion is navigating Saudi Arabia’s employment laws, hiring regulations, and workforce management frameworks. For foreign companies entering the Kingdom for the first time, understanding how to recruit staff, remain compliant with labor laws, and meet Saudization requirements is essential.

At The Saudi Gate, we serve as your strategic partner to simplify staffing, employment compliance, and HR operations in Saudi Arabia. Our comprehensive support enables you to focus on your business while we manage the regulatory, legal, and workforce complexities on your behalf.

Why Staffing and Compliance Are Crucial for Foreign Businesses

Foreign companies establishing branches, subsidiaries, or commercial operations in Saudi Arabia face a unique business environment—especially when it comes to human capital. Some of the core challenges include:

  • Strict employment and immigration regulations
  • Mandatory Saudization quotas (Nitaqat program)
  • Complex government platforms and reporting systems (GOSI, Qiwa, Mudad, etc.)
  • Limited availability of skilled local talent in emerging sectors
  • Cultural expectations and business etiquette

These factors make it vital for any foreign entity to align its staffing and HR strategies with Saudi regulations. Mismanagement of labor compliance can lead to fines, visa blocks, business license suspension, or delays in operations.

The Saudi Gate: Your Human Capital Compliance Partner

At The Saudi Gate, we help foreign companies hire legally, comply confidently, and manage their workforce in Saudi Arabia without disruption.

Our services include:

  • Recruitment & Staffing
  • Employer of Record (EOR) & Professional Employment Organization (PEO)
  • Visa Sponsorship & Immigration Support
  • HR Outsourcing & Payroll Management
  • Nitaqat and Saudization Strategy
  • Labor Law Advisory & Contract Compliance
  • Workforce Localization
  • HR Compliance Training

We provide white-glove consulting and execution, so your company can operate efficiently, stay compliant, and build high-performing teams in the Kingdom.

Overview of Employment Laws in Saudi Arabia

The labor ecosystem in Saudi Arabia is regulated by the Saudi Labor Law, as enforced by the Ministry of Human Resources and Social Development (MHRSD). The labor framework covers a wide range of topics including:

  • Employment contracts
  • Working hours
  • Wages and benefits
  • Termination and end-of-service benefits
  • Saudization
  • Occupational safety
  • Work permits and visas for expatriates

Understanding and complying with these rules is non-negotiable for businesses operating in Saudi Arabia.

1. Employment Contracts

Every employee must have a written employment contract in Arabic (or bilingual if needed). Contracts typically fall under two types:

  • Fixed-Term Contracts: Valid for a specified period and automatically end unless renewed.
  • Unlimited Contracts: No defined term but may be terminated with proper notice and valid reason.

Contracts must clearly define:

  • Job role and description
  • Working hours
  • Salary and benefits
  • Leave entitlements
  • Probation period (usually up to 90 days)

The Saudi Gate helps draft compliant, bilingual employment contracts tailored to your organization.

2. Working Hours and Overtime

  • The standard workweek is 48 hours (8 hours/day, 6 days/week).
  • During Ramadan, working hours for Muslim employees are reduced to 6 hours/day.
  • Overtime is paid at 150% of the hourly wage.

Our payroll and compliance team ensures accurate timekeeping and labor law alignment.

3. Leave and Holidays

Employees are entitled to the following statutory leaves:

  • Annual Leave: 21 days, increasing to 30 after five years of service
  • Sick Leave: Up to 120 days/year, with varying pay rates
  • Maternity Leave: 10 weeks paid
  • Paternity Leave: 3 days
  • Public Holidays: Eid al-Fitr, Eid al-Adha, Saudi National Day, and others

We help you manage employee leave tracking in compliance with national holidays and labor expectations.

4. Termination & End-of-Service Benefits (EOSB)

Termination must be based on:

  • Performance issues
  • Redundancy or restructuring
  • Legal or disciplinary reasons

Wrongful termination may result in fines or legal claims. Additionally, employees are entitled to End-of-Service Benefits, calculated based on tenure and salary.

Our HR advisory service ensures that terminations and EOSB payouts are compliant and well-documented.

Saudization and Nitaqat Program

A critical component of staffing in Saudi Arabia is Saudization, which requires companies to employ a certain percentage of Saudi nationals. The program is known as the Nitaqat System, and your company’s category determines your quota.

Categories include:

  • Platinum (highest compliance)
  • Green (High, Medium, Low)
  • Yellow
  • Red (non-compliant, subject to restrictions)

Factors affecting your Nitaqat status:

  • Total number of employees
  • Percentage of Saudi employees
  • Industry classification
  • Job categories and salary thresholds

The Saudi Gate develops Saudization strategies to help you recruit qualified local talent and maintain optimal Nitaqat ratings, unlocking benefits like easier visa processing, access to government contracts, and operational flexibility.

Staffing Options for Foreign Companies

Foreign businesses can choose from several models to hire and manage their workforce in Saudi Arabia:

Option 1: Direct Hiring via Your Legal Entity

If you establish a branch or LLC in Saudi Arabia, you may hire employees under your own company’s CR and GOSI account. This requires:

  • Business license and commercial registration (MISA and MoCI)
  • GOSI registration
  • Qiwa account
  • Mudad payroll integration
  • Local HR team

We support foreign companies with full business setup and compliant employee onboarding.

Option 2: Employer of Record (EOR)

The Saudi Gate can employ staff on your behalf, handling:

  • Sponsorship
  • Payroll
  • Contracts
  • HR operations

This model is ideal for market entry, pilot projects, or companies without a local entity.

Option 3: Professional Employment Organization (PEO)

A hybrid model where you co-employ staff with us. You control daily work; we handle compliance, HR admin, and benefits.

Immigration and Work Visas for Expats

To hire foreign nationals, companies must follow strict immigration procedures:

  • Apply for work visa quotas through the MHRSD
  • Issue Block Visas with specific job titles
  • Use Qiwa and Muqeem to assign and track expat permits
  • Secure residency (Iqama) and medical insurance

Our immigration specialists facilitate:

  • Visa quota applications
  • Block visa management
  • Iqama processing
  • Employee mobility and relocation services

Compliance with Government Platforms

Foreign companies must integrate with multiple platforms:

  • GOSI: Social insurance contributions
  • Qiwa: Digital platform for labor management and Saudization
  • Mudad: Wage protection and payroll verification
  • Muqeem: Visa and residence management
  • HRDF: Funding for Saudi employee training and hiring

The Saudi Gate ensures seamless onboarding, payroll, and reporting across these platforms.

HR Outsourcing and Workforce Administration

We offer outsourced HR services including:

  • Onboarding and employee file management
  • Payroll and salary payments
  • Tax and GOSI deduction
  • Leaves, sick days, and overtime tracking
  • Contract renewals and end-of-service processing
  • Saudization reports and Nitaqat monitoring

This lets you focus on core operations while we manage your compliance and workforce stability.

Talent Sourcing and Executive Recruitment

We offer tailored recruitment across roles and industries:

  • Engineers, ICT specialists, and technicians
  • Project managers and operations staff
  • Sales, marketing, and finance professionals
  • Executive leadership and board positions
  • Event staff, seasonal workers, and retail teams

Our sourcing channels include job boards, social platforms, local referrals, and global headhunting networks.

Why Choose The Saudi Gate?

  • Full-service HR and compliance provider
  • In-depth knowledge of Saudi labor law and Saudization
  • Trusted by international corporations, startups, and SMEs
  • Multilingual, multi-industry talent network
  • Personalized service and long-term partnership focus

We don’t just help you hire—we help you scale your business while staying fully compliant in Saudi Arabia.

Let’s Build Your Workforce—Compliantly and Strategically

Navigating Saudi Arabia’s labor laws, hiring requirements, and workforce compliance is not easy—but you don’t have to do it alone.

Whether you’re opening a new branch, hiring your first employee, or managing a growing workforce across the Kingdom, The Saudi Gate offers the HR, staffing, and legal support you need to succeed.

Contact us today and let us help you build and manage your workforce in Saudi Arabia with confidence.