Saudi Arabia’s MHRSD Set to Address MISA's Concerns on Skill-Based Work Visa Plan

The Ministry of Human Resources and Social Development (MHRSD) has announced plans to coordinate with the Ministry of Investment of Saudi Arabia (MISA) to address concerns regarding a draft scheme that proposes dividing work permits into three categories based on skill levels.

The MHRSD confirmed that it is finalising the scheme, taking into consideration the key feedback and observations received from various stakeholders.

In June 2024, the MHRSD, through Istitlaa -- the National Competitiveness Centre’s unified electronic platform for public consultation -- introduced a draft amendment to the executive regulations of the Labour Law.

The proposed scheme aims to categorize work permits and visas into three skill levels: highly skilled, skilled, and basic. The ministry invited the public and relevant entities to provide their feedback before finalising the scheme.

In its response, MISA expressed concerns that the scheme might impact the investment environment and emphasized the need to consider the interests of both local and foreign investors.

MISA highlighted the importance of analysing the current situation, conducting detailed benchmarking, and assessing the impact on related systems, as well as ensuring compliance with international obligations.

Additionally, MISA stressed the necessity of studying the financial implications, business practices, and the potential effects on small and medium enterprises.

The ministry also called for a review of directives from the highest authorities to ensure the scheme’s alignment with broader national interests.

In response to MISA's concerns, the MHRSD highlighted that the scheme is grounded in a comprehensive study of the financial, economic, and legislative impacts, including those on the labor market and various establishments.

A benchmark comparison with global best practices indicated that the classification of visas and work permits for expatriates would not significantly harm the investment environment.

The HR ministry added that the proposed scheme is expected to aid commercial establishments in attracting appropriately skilled workers, which would positively influence the overall business environment, including the investment climate.

The MHRSD plans to provide MISA with a summary of the study supporting this conclusion.
The MHRSD also noted that the proposal to categorise work visas by skill levels was presented to the Labor Market Policies Committee in 2021, where it received praise.

Furthermore, small companies with fewer than 20 employees will be exempt from certain policies under the new recruitment system.

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