Ministerial Decision

Ministry of Human Resources and Social Development

Minister’s Office 1 /

Ref.: 182495 Date: 11 / 10 / 1442

Attachments: 1 Manual Barcode: 1048579149182463

Ministerial Decision The Minister of Human Resources and Social Development,

Upon the authorities authorized to the Minister by law

Having reviewed the provisions of Article 11 bis, and article no. 26 of the Labor Law issued by the Royal Decree no. (M/51)

dated 23 / 8 / 1426 AH, as amended by the Royal decree no. (M/24) dated on 12/5/1434 AH, as amended by the Royal Decree

no. (M/1) dated on 22/1/1435 AH, as amended by the Royal Decree no. (M/46) dated on 5/6/1436 AH, as amended by the

Royal Decree no. (M/14) dated on 22/2/1440 AH, as amended by the Royal decree no. (M/134) dated on 27/11/1440 AH, as

amended by the Royal decree no. (M/5) dated on 7/1/1442 AH;

Having reviewed the Royal decree no. (38100) dated on 15/8/1433 AH, including the approval of “Nitaqat” program and the

ministerial decision no. (4040) dated on 12 / 10 / 1432 AH regarding the approval of “Nitaqat program document” and the

ministerial decision no. (939) dated 20 / 6 /1438 AH regarding the amendment of Localization rate of economic activities

in “Nitaqat” program and for serving the public interest to regulate the market labor and stimulating the Firm for

Localization;

Do hereby decide the following:

First: Approve the Restructuring of “Nitaqat” in the program document as per the mechanism set forth in the

procedural manual attached to this decision, including:

1- Merge the economic activities in “Nitaqat” program.

2- Approve the table of fixed balanced values of economic activities.

3- Approve the calculation mechanism of the entity's scope range value.

Second: This procedural manual shall be part of this decision.

Third: This decision shall cancel all conflicting previous decisions.

Fourth: This decision shall be published in the electronic website of the Ministry and shall be effective as of 26/4/1443

AH corresponding to 1/12/2021.

Fifth: The VICE Minister for Labor Sector shall take the necessary action to implement this decision.

God Bless,

Minister of Human Resources and Social Development

Eng. Ahmed bin Suleiman Al-Rajhi

// Signed //

Procedural Manual

Updated “Nitaqat” Program

Rabie Al Thani , 1442 AH www.hrsd.gov.sa

http://www.hrsd.gov.sa/

Contents

1- Introduction and Purpose of this Manual ........................................................................ 5

2- Definitions ....................................................................................................................... 6

3- Technical Details: ............................................................................................................ 7

4- Explanatory Example ...................................................................................................... 11

5- HRSD Services According to the Range ....................................................................... 15

Annex No. (1) ...................................................................................................................... 19

Annex No. (2) .....................................................................................................................23

1- Introduction and Purpose of this Manual

To implement the ministerial decision no. 182495 dated 11 / 10 / 1442 AH regarding the updated “Nitaqat” Program,

which approved the restructuring of Nitaqat program based on three main amendments as follows:

1- Merge small and micro economic activities and add them to other economic activities.

2- Provide a permanent Localization plan for the coming three years for providing the legislative stability.

3- Improve the direct correlation between the number of workers and percentage of Localization needed as

alternative for the rates based on fixed and permanent volumes of Firms.

Accordingly, the updated “Nitaqat” program represents the most important pillars and initiatives of strategic

transformation of the Ministry of Human Resources and Social Development aiming to improve the performance

of labor market and provide an appropriate job opportunity and labor environment safe and attractive for all Saudis.

This manual has been prepared to explain all details related to the updated “Nitqat” program, so that the Firms

and entities working in Kingdom of Saudi Arabia could review the program amendment to enable their internal

systems to cope up with the program and to continue their commitment to the program.

2- Definitions

- Firm: every project managed by a natural or legal person who employs one or more workers for a fee whatever

its kind.

- Entity: the capacity with which the Ministry will deal for the purpose of calculating the Localization rate,

recruitment and transfer of services and which represents all branches of the same economic activity owned by

one Firm.

- Economic activity: a classification of Firms that depends on the business sector practiced by the Entity.

- Expatriate Workers: And workers who is not a GCC citizen and works for an employer in the Kingdom.

- Localization rate: the rate calculated through dividing the total of the average Saudi workers in the Entity’s

Firms by (the total of the average Saudi workers in the entity’s Firms + the total of the average expatriate workers

in the Entity’s Firms) ×100.

- Range: a classification of the Nitaqat Program based on the Localization rate in the Firm.

3- Technical Details:

This Guide is prepared to clarify all the technical details related to Nitaqat Program, including:

- Regulatory clauses of Nitaqat Program

- Method of calculation of the value of the Entity’s Range

The Firm can determine its Range automatically via the following link: click here

(A) Regulatory clauses of Nitaqat Program:

The Program runs for three years for the purpose of increasing the Localization rate annually and gradually and

giving the private sector’s Firms the time to align the HR plans. The main clauses of the Guide include:

FIRST: Continue applying the five Ranges, which are:

(Red, Low Green, Medium Green, High Green, and Platinum)

SECOND: Merge the economic activities in the Nitaqat Program according to the attached Table No. (1).

THIRD: Cancel the classification of Firms according to its size and the applicable Localization rate within Nitaqat

Program and apply the method of calculation of Ranges based on the number of workers.

FORTH: Adopt the table of fixed values of the economic activities according to the details mentioned in the

attached Table No. (2).

(B) Method of calculation of levels for each Range in the Firm:

The Nitaqat Program helps the private sector’s Firms to comply with the Localization rate because it

significantly achieves the compatibility between the Firm’s size and its Localization rate.

Here is an example in the sector of restaurants. The below chart shows the increase in the required Localization

rate when the Firm’s size increases in the restaurants sector in the previous system. We notice that the

required Localization rate increases significantly, when the number of workers is 500 and more.

In contrast, the following chart shows how the Nitaqat Program addressed this problem through making the

relation between the Firm’s size and the Localization rate more compatible, which make it easy for the Firms to

comply with the Localization rate and help to its growth.

Current system- Restaurants Sector

Loca

lizat

ion

rate

Total workers

Platinum High Green Medium Green Low Green

The values of Ranges in Nitaqat Program are calculated as follows:

First: The following equation is applied to the Ranges (Low Green, Medium Green, High Green, and Platinum) to

determine the minimum percentage for the Range according to the Table No. (2):

R = M Log (O) + W

R= Minimum percentage for the range

M= Fixed value of the curve for each range and activity (Annex No. 2)

W= Fixed value for Localization of each range, activity and year for 3 years and beyond (Annex No. 2)

O= Total workers of the Entity

Log (O) = Function for calculating the natural log value of the total workers.

Nitaqat System- Restaurants Sector

Loca

lizat

ion

rate

Total workerss Platinum High Green Medium Green Low Green

Second: The function is applied to each Range to determine the minimum percentage for each Range (Low

Green, Medium Green, High Green, and Platinum) of the Entity as follows:

Range color Function for calculating the minimum

Low Green R Low Green = M Log (O) + W

Medium Green R Medium Green = M Log (O) + W

High Green R High Green = M Log (O) + W

Platinum R Platinum = M Log (O) + W

Third: Method of calculation of the Firm’s Range:

The color of the Firm’s Range is determined through applying (N) which is the Localization rate of the Entity and

comparing it with the Ranges according to the values mentioned in the previous table (R) as follows:

Range color Value of the range

Red N R Low Green

Low Green R Low Green = N R Medium Green

Medium Green R Medium Green = N R High Green

High Green R High Green = N R Platinum

Platinum R Platinum = N

4- Explanatory Example

The Firms are required to determine its Range within 3 years according to the following steps:

Example: Abdullah Al Barak Factory For Plastic Products is a manufacturing company that employs 400 workers

and its Localization rate is (38.75%).

1. Specify the Firm’s activity from the Annex No. (2) (Industrial Sector)

2. Specify the value (M) (The fixed value of the curve of Localization of the economic activity and the range).

3. Specify the value (W) (The absolute fixed value of the curve of Localization of the economic activity and the

range/per year) from the Annex No. (2) according to the table below.

New activity Range Fixed value of the curve

Absolute fixed value for the first year

Absolute fixed value for the second year

Absolute fixed value for the third year and beyond

Industries

Low Green 1.68 14.08 20.08 25.08

Medium Green 1.87 16.87 22.87 27.87

High Green 2.08 20.47 26.47 29.47

Platinum 2.08 23.87 28.37 32.87

4. Use the following equation to calculate the minimum for each Range:

R = M Log (O) + W

A- Obtain the fixed value of the curve for each Range.

B- Calculate the register (Manpower) and the natural log of total workers in the Firm (Total number of workers

is 400).

C- Calculate the fixed value for each year.

D- Apply the formula to all Ranges.

1. Company’s activity 2. M 3. W/ per year

5. For the first year, the below table shows the minimum for each Range:

Range Calculation for the first year Result

Low Green 1.68 * Log (400) + 14.08 24.15

Medium Green 1.87 * Log (400) + 16.87 28.07

High Green 2.08 * Log (400) + 20.47 32.93

Platinum 2.08 * Log (400) + 23.87 36.33

The Range of the company for the first year is Platinum because the Localization rate of the Firm (38.75%) is

more than the minimum of the Platinum Range which is (36.33%).

Color of Range Value of Range

Red N 24.15

Low Green 24.15 = N 28.07

Medium Green 28.07 = N 32.93

High Green 32.93 = N 36.33

Platinum 35.33 = N

6. For the second year, the below table shows the minimum for each Range:

Range Calculation for the second year Result

Low Green 1.68 * Log (400) + 20.08 30.15

Medium Green 1.87 * Log (400) + 22.87 34.07

High Green 2.08 * Log (400) + 26.47 38.93

Platinum 2.08 * Log (400) + 28.37 40.83

The Range of the company for the second year is Medium Green because the Localization rate of the Firm

(38.75%) is more than the minimum of the Medium Green Range which is (34.07%).

Color of Range Value of Range

Red N 30.15

Low Green 30.15 = N 34.07


High Green 38.93 = N 40.83

Platinum 40.83 = N

7. For the third year and beyond, the below table shows the minimum for each Range:

Range Calculation for the second year Result

Low Green 1.68 * Log (400) + 25.08 35.15

Medium Green 1.87 * Log (400) + 22.87 39.07

High Green 2.08 * Log (400) + 29.47 41.93

Platinum 2.08 * Log (400) + 32.87 45.33

The Range of the company for the third year and beyond is Low Green because the Localization rate of the Firm

(38.75%) is more than the minimum of the Medium Green Range which is (35.15%).

Color of range Value of range

Red N 35.15

Low Green 35.15 = N 39.07


High Green 41.93 = N 45.33

Platinum 45.33 = N

5- HRSD Services According to the Range

Based on the controls for providing the services shown below, the Ministry provides some Firms to the Firms

according to the Range within which the Firm falls. The following is a list of the most important services

provided to the Firms according to its Range.

Receiving applications for visa balance for available occupations.

The Entity may change the occupations of expatriate workers to any other available occupations, taking

into account the requirements of changing the occupation contained in the provisions of the Unified

Guidelines of Customer Services, the Executive Regulation of the Labor Law and the relevant ministerial

decisions.

The Entity may renew the work permits of its expatriate workers, regardless of the duration of their

stay, provided that the remaining workers’ stay does not exceed six months upon renewal.

The Entity may transfer the services of expatriate workers from any Range, taking into account the

controls of such service and the requirements set forth in the Executive Regulation of the Labor Law

and the relevant ministerial decisions.

The Entity may grant a compensatory visa for every workers whose status is left permanently, taking

into account the requirements for obtaining an alternative visa upon the final exit (Compensatory Visa).

The instant calculation in Nitaqat Program.

Platinum Range:





decisions.






The Entity may grant every workers whose status is left permanently and who was working in a

specialized occupation a compensatory visa for the same occupation of the workers, taking into account

the requirements for obtaining an alternative visa upon the final exit (Compensatory Visa).






decisions.









Medium Green Range:

High Green Range:


No new applications for new visas are accepted.




decisions.



The Entity may transfer the services of expatriate workers, taking into account the controls of such

service and the requirements set forth in the Executive Regulation of the Labor Law and the relevant

ministerial decisions, if the workers is transferred from a Firm that falls within the Low Green Range

and below.





The Entity may not change the occupations of its expatriate workers.

No expatriate workers’ services may be transferred thereto.

The entity may not apply for any new visas.

No work permits may be issued for new expatriate workers.

The entity may not open a file for a new Firm or branch.

The entity may not renew the work permits of its expatriate workers.

Red Range:

Low Green Range:

Annex No. (1)

This table shows and merges the current activities of "Nitaqat" Program with the updated new activities.

New activity Current activity

Agricultural and animal production and its services & equestrian clubs

Agricultural services, fishing, bird hunting, livestock, sheep, and equestrian clubs

Agricultural, animal and poultry production

Mines and Energy and its services

Petroleum and Natural Gas

Mines and Quarries

Petrochemical Industries, Coal and Rubber

Electricity, Gas and Water

Industries

Cement Industry

Jewelry Industry and Monetization

Bakeries and Bread Trade

Ready-Mix Concrete

Stone, Granite and Bricks

Manufacturing of Chemicals, Transport Equipment, Motor Vehicles, Plastic and Rubber Products and Other Manufacturing Industries

Dairy Factories

Manufacturing of Metals, Chemical Industries, and General Manufacturing Industries

Manufacturing of Raw Materials, Food, Clothes, Furniture and Building

Construction, Building, and Cleaning Contracting

Construction & Building

Cleaning Contracting

Operation and Maintenance Operation and Maintenance Contracting

Maintenance Workshops and Shops

Wholesale and Retail Trade Gold and Jewelry Trading

Wholesale and Retail Trade- Technology, Machines, Clothes, Services, Etc.

Wholesale and Retail Trade- Materials, Food, Furniture and agricultural Commodities

Health Services Pharmacies

Laboratories

Health Services

Pharmaceutical Distributor


Accommodation, Entertainment and Tourism

Entertainment and Tourism

Accommodation and Hotels

Land Transport and Storage

Land Transport of Passengers Outside City and International Transport

Land Transport of goods Outside City and International Transport

Intra-City Land Transport of Passengers

Intra-City Land Transport of Goods

Storage

Transportation of Pilgrims and Umrah Performers

Sea and Air Transport Sea Transport

Air Transport

Financial Institutions Financial Institutions

Business Services

Insurance and Business Services

Collection Offices and Real Estate Services

Consulting and Business Services

Public Services Office (Reviwing)

Printing, Publishing and Media

Language Institutes and Translation Services

Evaluation of Goods and Services

Collective and social services

Centers for People with Disabilities

Sports Halls and Centers

Employment and Recruitment Services & Security Guard

Security Guard

Private Employment Offices

Private Recruitment Agents

Personal Services Personal Services

Beauty Centers and Women Tailoring Workshop

Laundries


High Education Institutes

Health Colleges

University Colleges

Schools for Girls and Kindergarten

Private Schools for Girls

Kindergarten

Children Day-Care Centers

Schools for Boys and Schools for Boys and Girls

Private Schools for Boys

Private Schools for Boys and Girls

Foreign Schools Foreign Schools

Strategic Partnership Institutes

Sale of Fuel Fuel Stations

Gas Stores

Women's Goods & Sale and Maintenance of Mobile Phones

Women's Goods and Services

Sale and Maintenance of Mobile Phones

Restaurants Except Fast Food Restaurants

Restaurants Except Fast Food Restaurants

Fast Food Restaurants and Ice Cream Shops

Fast Food Restaurants and Ice Cream Shops

Coffee shops and Juice Shops

Coffee shops and Juice Shops

Catering Catering

Communication Solutions Communication Solutions

Post Services Post Services

IT Infrastructure IT Infrastructure

Communications Infrastructure

Communications Infrastructure

Operation and Maintenance of Communications

Operation and Maintenance of Communications

IT Operation and Maintenance

IT Operation and Maintenance

IT Solutions IT Solutions

Annex No. (2)

This table shows the fixed weighted values of the economic activities of Localization rates. New activity Range Fixed value of the

curve

Absolute fixed

value for the

first year

Absolute fixed

value for the

second year

Correct value for

the third year

and beyond

Agricultural and

animal production

and its services &

equestrian clubs

Low Green 0.19 9.00 13.00 15.00

Medium Green

0.58 11.00 13.00 16.00

High Green 0.58 13.38 15.38 18.38

Platinum 0.58 18.38 20.38 23.38 Mines and Energy

and its services

Low Green 4.98 3.62

Medium Green

6.00 18.00

High Green 6.00 2100

Platinum

6.00 23.00

Industries

Low Green 1.68 14.08 20.08 25.08

Medium Green

1.87 16.87 22.87 27.87

High Green 2.08 20.47 26.47 29.47

Platinum 2.08 23.87 28.37 32.87

Construction,

Building, and

Cleaning

Contracting

Low Green 0.00 13.00 16.00 18.00

Medium Green

0.00 15.00 17.00 19.00

High Green 0.00 17.00 18.00 20.00

Platinum 0.00 22.00 22.00 22.00

New activity Range Fixed value of the

curve

Absolute fixed

value for the

first year

Absolute fixed

value for the

second year

Correct value for

the third year

and beyond

Operation and

Maintenance

Low Green 0.14 16.2 23.12 28.12

Medium Green

0.14 20.12 26.12 31.12

High Green 0.48 24.96 28.96 3196

Platinum

0.76 29.09 30.09 32.09

Wholesale and

Retail Trade Low Green 2.47 19.25 26.25 33.25

Medium Green

2.47 22.72 29.72 36.72

High Green 2.67 26.91 33.91 40.91

Platinum

2.84 35.91 42.91 49.91

Restaurants Except Fast Food

Restaurants

Low Green 1.58 11.07 13.88 16.62

Medium Green

1.67 14.58 17.39 20.13

High Green 1.67 18.86 21.67 24.41

Platinum

1.67 1.67

24.61 26.91 29.15

Fast Food Restaurants and

Ice Cream Shops

Low Green 1.58 13.08 17.98 22.73

Medium Green

1.67 16.59 21.49 26.24

High Green 1.67 20.87 25.77 30.52

Platinum 1.67 26.26 30.26 34.15


curve

Absolute fixed

value for the

first year

Absolute fixed

value for the

second year

Correct value for

the third year

and beyond

Coffee shops and

Juice Shops

Low Green 1.58 14.45 20.75 26.87

Medium Green

1.67 17.06 24.26 30.38

High Green 1.67 22.24 28.54 34.66

Platinum

1.67 27.38 32.53 37.54

Catering Low Green 1.58 11.46 14.68 17.81

Medium Green

1.67 14.97 18.19 21.32

High Green 1.67 19.25 22.47 25.60

Platinum

1.67 24.93 27.57 30.13

Women's Goods & Sale and

Maintenance of

Mobile Phones

Low Green 0.00 82.00 82.00 82.00

Medium Green

0.00 85.00 85.00 85.00

High Green 0.00 89.00 89.00 89.00

Platinum

0.27 93.42 93.42 93.42

Land Transport and Storage

Low Green 1.15 16.09 24.09 31.09

Medium Green

1.15 20.20 28.20 35.20

High Green 1.50 22.82 30.82 37.82

Platinum 1.71 31.74 39.74 46.74


curve

Absolute fixed

value for the

first year

Absolute fixed

value for the

second year

Correct value for

the third year

and beyond

Ai and Sea

Transport Low Green 1.45 22.57 24.57 27.57

Medium Green 1.45 35.98 37.98 40.98

High Green 1.86 45.38 47.38 50.38

Platinum

2.67 52.29 54.29 57.29

Financial

Institutions

Low Green 2.60 50.00 50.00 50.00

Medium Green 2.60 57.00 57.00 57.00

High Green 2.60 62.00 62.00 62.00

Platinum

2.60 65.00 65.00 65.00

Business Services Low Green 1.03 28.28 33.28 38.28

Medium Green 1.03 37.12 42.12 47.12

High Green 2.19 37.12 42.12 47.12

Platinum

2.19 47.82 52.82 57.82

Social Services Low Green 1.83 9.82 13.82 16.82

Medium Green 2.38 21.90 25.90 28.90

High Green 3.50 28.74 32.74 35.74

Platinum 3.50 54.52 54.52 54.52


curve

Absolute fixed

value for the

first year

Absolute fixed

value for the

second year

Correct value for

the third year

and beyond

Personal Services

Low Green 1.46 10.57 16.57 22.57

Medium Green

1.92 17.36 21.36 25.36

High Green 4.40 21.63 25.63 25.63

Platinum

5.00 23.63 26.63 25.63

High Education

Low Green 0.00 34.00 42.00 49.00

Medium Green

0.00 48.00 54.00 60.00

High Green 0.43 75.37 76.37 77.37

Platinum

0.43 82.00 82.00 82.00

Schools for Girls

and Kindergarten

Low Green 0.00 77.00 78.00 80.00

Medium Green

0.00 85.00 86.00 86.00

High Green 0.00 89.56 90.56 92.56

Platinum

0.00 95.00 96.00 98.00

Foreign Schools Low Green 2.30 17.98 20.98 23.98

Medium Green

2.30 22.77 25.77 28.77

High Green 2.30 28.57 31.57 34.57

Platinum 2.30 36.77 39.77 42.77


curve

Absolute fixed

value for the

first year

Absolute fixed

value for the

second year

Correct value for

the third year

and beyond

Health Services

Low Green 0.35 22.24 25.24 28.24

Medium Green

0.35 27.24 30.24 32.24

High Green 0.35 32.24 33.24 33.24

Platinum

0.35 34.24 34.24 34.24

Accommodation,

Entertainment and

Tourism

Low Green 2.42 19.10 24.10 28.10

Medium Green

2.42 25.52 30.52 34.52

High Green 2.59 30.90 35.90 39.90

Platinum

2.59 37.02 42.02 49.02

Sale of Fuel Low Green 0.17 8.86 13.86 17.86

Medium Green

0.56 15.22 19.22 22.22

High Green 0.56 21.59 23.59 24.59

Platinum

1.19 26.09 26.09 26.09

Schools for Boys

and Schools for

Boys and Girls

Low Green 1.31 29.30 31.30 34.30

Medium Green

1.31 39.15 41.15 44.15

High Green 1.31 50.27 53.27 56.27

Platinum 1.31 61.00 61.00 61.00

New activity Range Fixed value of

the curve

Absolute fixed

value for the

first year

Absolute fixed

value for the

second year

Correct value for

the third year

and beyond

Employment and

Recruitment

Services & Security

Guard

Low Green 0.34 74.50 74.50 74.50

Medium Green

0.34 77.50 77.50 77.50

High Green 0.34 80.50 80.50 80.50

Platinum

0.34 84.50 84.50 84.50

Communication

Solutions Low Green 2.19 22.76 25.76 27.76

Medium Green

2.52 31.76 34.76 36.76

High Green 2.91 37.02 40.02 42.02

Platinum

3.22 44.15 47.15 49.15

Post Services Low Green 0.81 16.10 18.10 20.10

Medium Green

0.81 21.10 23.10 25.10

High Green 1.01 30.50 32.50 34.50

Platinum

1.01 40.50 42.50 44.50

IT Infrastructure Low Green 3.61 15.77 15.77 15.77

Medium Green

3.61 22.64 22.64 22.64

High Green 3.61 38.00 38.00 38.00

Platinum 3.61 48.00 48.00 48.00

New activity Range Fixed value of

the curve

Absolute fixed

value for the

first year

Absolute fixed

value for the

second year

Correct value

for the third

year and beyond

Communications

Infrastructure

Low Green 0.00 12.00 15.00 18.00

Medium Green

0.00 16.00 19.00 22.00

High Green 0.00 20.00 23.00 26.00

Platinum

0.00 25.00 28.00 31.00

Operation and

Maintenance of

Communications

Low Green 0.00 12.00 15.00 18.00

Medium Green

0.39 15.98 18.98 21.98

High Green 0.39 20.33 23.33 26.33

Platinum

0.39 25.00 28.00 31.00

IT Operation and

Maintenance Low Green 4.85 10.96 13.96 16.95

Medium Green

4.85 19.42 22.42 25.42

High Green 4.85 22.42 25.42 28.42

Platinum

4.85 29.36 32.36 35.36

IT Solutions Low Green 2.19 22.76 25.76 27.76

Medium Green

2.34 28.54 31.54 33.54

High Green 2.91 37.02 40.02 42.02

Platinum 3.22 44.15 47.15 49.15

Documents

Ministerial Decision