19th July 2019
As we’ve seen in Italy recently, economies around the globe are increasingly seeking to attract foreign talent for a multitude of reasons. Just last week news emerged that Saudi Arabia is following this trend, launching a new special residency scheme similar to the ‘green card’ systems applicable in other countries, aimed at enticing wealthy and highly-skilled expatriates to the destination.
The country, a G20 member with the second-largest petroleum reserves in the world, is a thriving economy and one clearly looking for talent. There are known skills shortages in the region, with a study from Korn Ferry suggesting there will be a total labour deficit of 660,000 by 2030 in the Kingdom.
While there have been efforts to counteract this in the past – with schemes such as Future Gate introduced to promote digital learning in schools – without foreign talent, this deficit will be difficult to close. Clearly there’s demand for expat professionals, but any worker keen to move to the region will need to be aware of the effect of the latest changes to Saudi contractor compliance.
Saudi contractor compliance: The new residency scheme
The newly-launched residency scheme will allow wealthy and high-skilled foreign expats to choose between renewable residencies or permanent stays in return for a high, one-off fee. Under the law, those paying for the scheme will have access to a number of benefits. For example, they will be able to own and lease property and transport in the Kingdom, obtain visit visas for relatives, freely enter and exit the country and will also have the use of designated queues at airports.
Two main categories will be offered – an extended residency valid for an unlimited period, and a second with a one-year validity which will be subject to renewal. Eligible expats must have a valid passport with a credit report, adequate financial resources, a health report and no criminal record. The fee for Saudi’s new permanent residency permit has been fixed at just over £170,000, while, a one-year temporary residency will cost expats around £21,000,
Demand is expected to be high and, as there will undoubtedly be some complications over Saudi contractor compliance, a specialised centre is being set up to handle applications. The centre, which will have financial and administrative independence, is expected to announce all the details related to the scheme soon.
Currently over 10 million expats work and live in Saudi Arabia under a far more complex system that requires them to be sponsored by a Saudi employer and be issued an exit and re-entry visa whenever they want to leave the country.
International employment arena evolving
Clearly, the Saudi Arabian expat residency scheme is an attempt to make the relocation of foreign talent into the country an appealing prospect. However, it’s important to bear in mind that international tax and compliance is a complicated affair and with rules constantly changing – and authorities becoming ever more powerful – it’s not only Saudi contractor compliance that will pose a challenge to contingent workers. The fact of the matter is this: wherever you choose to work, tax and compliance is likely to be getting stricter. Therefore, we strongly advice enlisting the services of an expert management firm that can skilfully navigate the complex landscape of international tax and compliance. This will take the burden of compliance off your shoulders completely, and let you get back to the job at hand.
Contact our team of experts today to find out how we can help you.