Shoura Council focus on monopolies

Businesses operating in Saudi Arabia are subject to the Competition Law, which prohibits certain anti-competitive behavior and provides for government scrutiny of monopolistic practices. The Council of Competition Protection (CCP) is largely responsible for enforcing and implementing the Competition Law.

The Shoura Council recently discussed the rise of monopolies in Saudi Arabia, the economic damage they cause, and possible changes that can be made to curb the ill effects of monopolies. Suggestions included converting the CCP into a public organization similar to the structure of the Shoura Council itself, such that its meetings and investigations would be available to the public to some degree.

Arab News, 14 December 2014

Liberalization of healthcare sector

The Ministry of Health (MoH) announced forthcoming amendments to the Private Health Institutions Law providing, inter alia, for the liberalisation of foreign investment in the health sector in Saudi Arabia. The MoH on 29 November 2014 announced that "prominent international health institutions" will be permitted to invest in the health sector "with an aim of benefitting from their experience and therapeutic techniques, increasing the level of competition, and adding more value to the health sector."

The MoH has not yet indicated a timeframe for implementation of the amendment.

Ministry of Health, News Center, 29 November 2014 (click here)

Five-year residency permit for expats

The Passport Department announced plans to increase the validity of expatriate residency permits (Iqamas) from one year to five years. The changes have been applauded by businesses and economists in the Kingdom and will be implemented "shortly" according to the head of the Department.

Arab News, 25 November 2014

New telecommuting regulations

Saudi Arabian policy has seen an increased drive for the employment of women in the Kingdom. However, as a curb on this trend, and as an indication of Saudi Arabia’s conservative roots, lawmakers and commentators have pushed for more telecommuting employment opportunities for women, allowing them to work from home.

The Ministry of Labor announced new regulations aimed at helping women obtain employment in a telecommuting capacity and to encourage employers to give priority to female candidates for jobs that can be carried out from home.

Arab News, 19 November 2014

Labour and employment law – Publicised dispute

The Saudi Gazette reported a judge’s order that a company pay its employee SAR 950 for the days that he was not paid due to the company’s assertion that the employee was absent. Further, the judge ordered that, should the company fail to pay the employee by the deadline, the company would be subject to a daily fine of SAR 10,000 and a travel ban on the owner of the business.

Saudi Gazette, 18 November 2014

Tadawul open to foreign firms before April 2015

As noted in the previous Dentons Saudi Arabia Update, the Capital Market Authority is preparing rules and regulations to open the Saudi Arabian stock exchange, Tadawul, to foreign direct investment for the first time.

Media outlets have quoted unnamed sources as confirming that the rules and regulations will be promulgated in their final form by the end of 2014, and that the Tadawul will officially open to qualified foreign institutions before April 2015.

Arab News, 18 November 2014

Minimum wages

The Kingdom policy of "Saudisation" aims to encourage the employment of Saudi nationals, which is implemented by the Nitaqat programme. Under the programme, firms avoid penalties by hiring a higher percentage of Saudi nationals. Currently, a “minimum wage” of SAR 3,000 per month for Saudi employees is in effect to the extent a Saudi employee paid less than SAR 3,000 per month does not count as a "full" Saudi employee under the Nitaqat programme.

This November, the Ministry of Labor announced indications of more aggressive reforms, with a minimum monthly wage for Saudi employees set at SAR 5,300. Ostensibly, this will be independent of the Nitaqat programme.

As part of the announcement, the Ministry of Labor also indicated that it would set a minimum monthly wage for non-Saudi employees at SAR 2,500.

Saudi Gazette, 12 November 2014

Consumer protection law

The Shoura Council announced it is considering a draft bill to form a consumer protection body to enforce consumer protection laws against merchants and businesses in Saudi Arabia. The law proposes punishments with a maximum two years' imprisonment and fines of SAR 5,000 to SAR 50,000.

Arab News, 12 November 2014

Wage Protection System

Under the recently implemented Wage Protection System (WPS) in Saudi Arabia, employers must provide the employment information of their employees to the Ministry of Labor and pay their employees’ salaries directly into a bank account in the Kingdom, so as to ensure the fair treatment of employees, the uncovering of illegal workers, and the payment of contributions to the General Organization for Social Insurance (GOSI).

The Ministry of Labor  recently reminded private sector employers that the WPS became compulsory for all companies with 200 or more employees in October and that failure to comply will result in penalties. Delaying compliance by one month will subject the company to a comprehensive inspection visit, two months' delay will result in the termination of certain services, and three months' delay will result in termination of all services.

Arab News, 11 November 2014

Employment law violations

The Ministry of Labor reported that it has implemented penalties in the amount of SAR 12.80 million on more than 74,500 firms in Saudi Arabia for the year 2014 so far. 10,700 of the violations pertained to the restriction forbidding employers to allow expatriate employees to work for more than one sponsor, while 2,300 of the violations pertained to environmental law infractions.

Arab News, 9 November 2014

Judicial corruption

A Saudi Arabian judge with 25 years of service was imprisoned and fined for accepting a SAR 2 million bribe from a defendant in exchange for suspending a ruling against him.

Arab News, 27 October 2014

Saudisation measures on Green level businesses

The Kingdom policy of "Saudisation" aims to encourage the employment of Saudi nationals, which is implemented by the Nitaqat programme. Under the programme, firms are placed in the Red, Yellow, Green or Platinum category based on their Saudisation percentages. Generally, firms in the Green and Platinum categories are considered to be compliant with Saudisation policies.

Nonetheless, the Ministry of Labor announced measures aimed at firms in the lower spectrum of the Green category to discourage expatriate employment and encourage employment of Saudi nationals. The measures include barring sponsorship transfers for employees to new sponsors in Saudi Arabia and blocking the issuance of work visas for new expatriate workers.

Arab News, 26 October 2014

Increased GOSI requirements

Under Saudi Arabian law, employers and Saudi Arabian national employees must jointly contribute to the General Organization for Social Insurance (GOSI) Annuities (Pension) Branch a total of 18 per cent of the employee’s monthly wages, 9 per cent covered by the employee and 9 per cent paid by the employer out-of-pocket.

Earlier this year, GOSI advised that a new insurance scheme, called Saned, would be implemented to help recently unemployed Saudi national employees become re-employed quickly. To fund the Saned programme, GOSI announced that additional contributions would be needed.

It is now understood that the Saned programme has begun, and GOSI has announced that an additional 2 per cent of each Saudi national employee’s salary must be paid to fund the programme, 1 per cent covered by the employee and 1 per cent covered by the employer out-of-pocket.

Arab News, 13 March 2014