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Insights   >   A Step-to-Step Guide to Labour Law Compliance in Saudi Arabia for Foreign Investors

A Step-to-Step Guide to Labour Law Compliance in Saudi Arabia for Foreign Investors

Author: Albatul Alharthi
Nov 8, 2023
Employers • KSA

Saudi Arabia has emerged as a promising investment destination for foreign companies seeking opportunities in the Middle East. With its Vision 2030 plan, the Kingdom is actively promoting economic diversification and encouraging foreign direct investment (FDI). However, navigating the complex landscape of government relations, labour laws, localization and HR compliance in Saudi Arabia can be a challenging task for foreign businesses. In this blog, we will explore the key aspects of managing government relations when investing in Saudi Arabia.


Understanding the Regulatory Environment

Before delving into government relations, foreign companies must familiarize themselves with the regulatory environment in Saudi Arabia. The Saudi Arabian government has been working diligently to streamline and modernize its regulatory framework to attract more foreign investment. Compliance with Saudi Arabian laws and regulations is non-negotiable. Maintaining transparency in all business dealings and financial transactions is critical. The Kingdom has stringent anti-corruption measures, and any unethical behaviour can result in severe consequences. It's imperative for foreign companies to have robust internal compliance mechanisms in place. Read our blog to stay updated on the latest updates on Saudi labour law: Saudi Labour Law Updates In 2023.


Business Setup Process in Saudi Arabia

The Saudi government has taken steps to update and simplify the business setup process in recent years to encourage investment and economic growth. The specific steps and requirements can vary depending on whether you are a Saudi/GCC (Gulf Cooperation Council) company or a foreign company.

For Saudi & GCC companies: The business setup process in Saudi Arabia involves steps like choosing a business structure, reserving a business name, drafting Articles of Association, obtaining necessary approvals from government authorities, registering with the Ministry of Commerce, and more.

For foreign companies: The process for foreign companies involves all of the steps for Saudi & GCC companies, along with additional regulatory requirements, such as obtaining approval from the Ministry of Investment (MISA) and ensuring compliance with foreign ownership regulations.


Mobilization & Employee Onboarding Process

The process for onboarding Saudi nationals differs from non-Saudis living in Saudi Arabia and expats who want to relocate. For Saudi nationals, the process will end once they accept the contract and are registered on GOSI by the employer, while non-Saudis will require a transfer of their IQAMA if they are living in Saudi Arabia. Relocating expats to Saudi Arabia will require the issuance of a visa, in addition to a medical test and certificate attestation, which applies to technical, engineering, and accountant jobs for all. Read our blog to learn How TASC Can Solve Your Global Mobility Challenges.


Government Portals Management

To efficiently manage your business in Saudi Arabia, you'll need to navigate various government portals. There are five key government portals under the Ministry of Human Resource and Social Development (MHRSD) that play a crucial role in daily business operations:

  1. MOL to manage your business's daily processes
  2. Mudad the wage protection system (WPS) to manage employees' salaries
  3. QIWA to manage the employer-employee relation and maintain your company's Saudization percentage (Nitaqat programme). Read our blog to learn Everything You Need To Know About Nitaqat in Saudi Arabia
  4. Muqeem to manage your expat employee visa process
  5. GOSI to manage your Saudi national employees

These portals serve as essential tools for tasks such as obtaining permits, and licenses, and managing regulatory compliance. Understanding how to use these portals effectively is vital for seamless operations.


Saudi Arabia's commitment to economic diversification and attracting foreign investment presents significant opportunities for foreign companies. Successful government relations management is essential to navigate the of the Saudi market. By understanding the regulatory environment, and adhering to legal compliance, foreign companies can position themselves for success in the Kingdom. The best approach for managing your GRO in Saudi Arabia is partnering with a GRO service provider. Read our blog to learn more about Here’s Why You Need A GRO Service Provider in KSA.


Get Your Step-by-Step Guidebook for 100% Compliance For Labour Laws & Government Relations in KSA

To help you navigate the intricate world of government relations in Saudi Arabia, we've prepared a comprehensive guidebook. This guidebook offers step-by-step instructions and valuable insights to ensure 100% compliance with Saudi regulations. Download it now to gain a competitive edge in your investment journey.

Don't miss out on this opportunity to equip yourself with the knowledge and tools needed for successful investment in Saudi Arabia. Get in touch with our GRO experts today and embark on your path to success in the Kingdom.

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