As an entity in the Kingdom, you may be asking how to stay green while adhering to the Nitaqat requirements that have come with Saudization. It is critical to understand that red-zone enterprises suffer commercial limits as a result of noncompliance, and the yellow band of Nitaqat has been deleted as of February 2020. If you are not GREEN, you are RED.
Nitaqat and Saudization are critical components of doing business in the Kingdom, and without adequate knowledge and execution of the program, your firm may face unintended repercussions. Many businesses are uncertain of their Nitaqat requirements, and recent developments such as the cancellation of the yellow zone in Nitaqat make it even more important to be aware.
To avoid non-compliance and obtain the benefits of the green band, your company’s Saudization ratio must be higher than the required ratio. The green band is divided into low, medium, and high categories, and the more compliant a firm is, the ‘greener’ it positions inside the green band, earning additional compliance benefits. Your green Nitaqat status might be the distinction between a new company’s visa being accepted or rejected, the renewal and issuance of working visas, and, in many situations, you may lose the employees.
How to calculate the Saudization ratio:
The Ministry of Labor uses the National Information Centre of the Ministry of Interior and GOSI databases to calculate the Saudization rate (GOSI). It can be calculated using following method:
Saudization %age= (total number of Saudi employed / by the total number of employees) x 100
The entity’s range in the Nitaqat program is determined based on the entity’s performance in Saudization over the last 26 weeks by calculating the average weekly Saudization rate using the previously mentioned formula, so that the rates of 26 weeks are added together and then divided by the number of 26 weeks.