Foreign investors will be treated as Saudis under Nitaqat

Foreign investors can now officially be classified as Saudis under the Nitaqat Saudization program following the approval of the Ministry of Human Resources and Social Development.

This decision represents a provision within the classification system, wherein these individuals will be considered on par with citizens when calculating Saudization percentages, according to the Qiwa platform associated with the ministry, Saudi Gazette reported.

The system has outlined two categories of individuals treated as nationals within the Nitaqat program, including the children of local women married to non-Saudis and widows of residents who are not from the Kingdom.

Saudi citizens working remotely will be treated as equal to other regular local employees.

The platform announced that individuals from displaced tribes, citizens of Gulf countries, and players or athletes from the region will be treated equally with Saudis in the calculation of Saudization percentages.

Qiwa clarified that certain expatriates will be factored in at reduced rates for Saudization calculations including Palestinians holding Egyptian passports and Baluchis, who will be counted at a rate of 0.25 of the standard expatriate proportion.

Hiring four Palestinians will equate to hiring one non-Saudi for Nitaqat calculation, provided that these categories of employees do not surpass 50 percent of the total workforce.

This adjustment also extends to individuals from Myanmar or Burmese, who will be counted at 0.25 of the regular expatriate percentage across all regions of the Kingdom.

However, Burmese nationals residing in Makkah and Madinah are exempted from this provision.

This change comes as Saudi Arabia looks to increase greater foreign direct investment into the Kingdom as part of its Vision 2030 economic diversification intiative.

Inflows to Saudi Arabia of this nature saw a 6 percent annual rise in the first nine months of 2023, the Ministry of Investment revealed in February.

Utilizing an updated approach characterized by heightened transparency and governance standards, FDI funds were shown to have reached SR52.9 billion ($14.11 billion), up from SR49.9 billion in the previous period.

These figures exclude an Aramco deal in 2022 worth SR58.1 billion, in which a consortium led by BlackRock Real Assets and Hassana Investment Co. purchased a 49 percent stake in a newly formed gas pipeline subsidiary.

In alignment with the objectives outlined in the National Investment Strategy and the Vision 2030 targets, significant legal, economic, and social reforms were implemented to stimulate FDI inflows, aiming to reach SR83 billion by 2023.

This suggests that by the third quarter of 2023, the Kingdom had attained 64 percent of this objective.