Saudi Arabia: What is an Expat to Do?

 

 

The majority of expats come to Saudi Arabia to work.  This may be due to a lack of opportunities in their home country or more likely, the opportunity to earn more working in Saudi Arabia.  Many expats working in Saudi Arabia continue to have responsibilities of supporting family back in their home countries.  A lot of expats take the opportunity to work in a conservative country with social limitations in order to save a nest egg which they can use to purchase a home in their country of origin or perhaps to pay off debts.

 

However, the Ministry of Labor now intends to implement new guidelines which places limitations on how much an expat can send out of the country.  This is being done on the basis to boost the domestic economy in Saudi Arabia.

 

Introducing new programs which help Saudization and fill jobs with Saudi nationals is a positive thing, placing limitations on an expats salary does not seem ethical or practical and raises many questions.

 

What do the experts propose the money that is kept in the country will be spent on? After one buys gas and groceries, most expats are not in the market for buying houses, clothing or luxury cars.  The stock market is not an attractive option for anyone with a reasonably intact memory.

 

Personally I think expats would find creative ways to circumvent this requirement.

 

 

 

Saudi Arabia to limit how much expats can send home

 

 

Alarmed by a predominantly expatriate workforce in Saudi Arabia sending large money transfers outside of the country, the Saudi Labor Ministry has said it will introduce a “salary protection” program to boost its domestic economy.

The new program will dictate the amount an expat working in Saudi Arabia can send back home, the Saudi labor minister, Adel Fakih, said. Expats must keep the bulk of their salaries within the country under the new program.

“About nine out of 10 workers in the country are foreigners,” Fakih said. “This has led to millions of riyals being transferred back to their home countries, harming the local economy,” Fakih added.

The Labor Ministry has also put a 20 percent ceiling on the country’s guest workers in its latest bid to help make jobs for Saudi nationals.

“The maximum number of long-term expatriate workers in the kingdom should not exceed 20 percent of the Saudi population,” a spokesman from the ministry was quoted as saying in the Saudi daily Arab News.

Within the next three years, Fakih expects unemployment among Saudi nationals to decline by 50 percent because of ministry initiatives. The country’s unemployment rate for Saudi citizens was 10.8 percent in July.

The ministry said it intends to launch 30 new initiatives as part of its drive to create jobs for Saudi university graduates.

Fakih told Arab News that the initiatives would include efforts to develop the skills of Saudi workers, informing the private sector about qualified Saudi jobseekers and opening new opportunities for women.

Fakih also said the ministry would eliminate the so-called “Saudization” plan that had been put in to encourage more nationals to work.

Instead, Fakih said that the “Hafiz” program, which provides financial assistance to Saudis who are not employed until they are provided with a job, will better support nationals in need of job opportunities.

The ministry had previously said it would begin to pay unemployment benefits for the first time beginning in November

http://english.alarabiya.net/articles/2011/10/23/173313.html

 

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21 Responses

  1. Of course as a foreigner, I *want* to go and work in Saudi and be able to do what I want with the money. But from an economical perspective in favour of Saudi functioning as a country, limitations must be placed just like any other country in the world.

  2. Limitations on what you do with the money you earned? Since when do other countries in the world tell you how to spend the money you made with the sweat of your brow? Incredible!

  3. I think its good maybe it will put off more ppl from coming to saudi to work..so its a win win. Hopefully less and less expats will want to come to saudi thus making a shortage in work force requiring saudis to get their acts together.

  4. I’d love to see Saudi with only 20% foreign workers. I don’t think it will halve the unemployment rate tho coz the Saudis will have to get used to a different work ethic, since the majority of foreigners are maids, laborers and drivers.

    As for spending, like you have said, what is there to spend money on? Even as a comparatively ‘wealthy’ expat, there was not that much for me to spend my money on. Maybe a shopping spree every few months for new clothes but that’s about it.

    The best way to boost the economy is to put money in the hands of the locals and the best way to do that is to give them a job.

  5. With the recent change of real estate laws here, expats can now purchase and own property/land here without having a Saudi national being a partner, so that opens investment opportunities for expats here.

    Aside from daily expenses, an expat can travel throughout the Kingdom, and as I mentioned above, purchase property here either to live in or as a rental. So expats can and do spend their salaries here, that’s if they’re not sending their whole salary out of the country.

  6. Dear Felicia,Is the news about owning a land in the Kingdom true?When did this law pass?Kindly provide the details.Is it possible for any national to buy a land here?

  7. I think it’s completely immoral. Those people come here to earn money for home. It’s their money. No one should tell someone else what they can do with the money they have earned. Our driver, for example, works here so he can send his children to college! This is his right! He earns his money- he has to live away from his family- he wants his children to have a better life-this is just awful. The Filipena lady that helps at my house is taking care of her two very sick parents and trying to get her children through school. Why shouldn’t she send her money if she has earned it? Why would either of them be interested in investing here? Maybe they would be if they were offered a chance to earn citizenship and have their families here. But they are not.

    I hope all these poor people can find honorable work for honorable people where they are allowed to keep their own money. And while we’re on the topic I think all Saudi women should invest outside the country until they get their rights as well.

  8. “I hope all these poor people can find honorable work for honorable people where they are allowed to keep their own money.” good answer

  9. Denial must be a wonderful thing for the Saudis. Do the powers that be really believe putting a limit on what workers can send out of the country will really help the unemployment issue? As previously noted, there isn’t a lot I want to spend my husband’s money on here. By the grace of God, my husband is not paid by the Saudis so our money never sees a bank in Saudi Arabia.

  10. As an expat I cannot buy property in the kingdom. I will therefore, need to send money to another country where I can safely /legally invest in property and a retirement home, as I can be asked to leave with a 2 month’s notice.

    The main and often only reason a lot the domestic workers and other low-paid workers are in KSA is to support their families back home, if they can’t do that, then there is no point working in KSA, they will seek opportunities in other countries.

    When your contract ends you are unceremoniously asked to leave, regardless of the fact that you may have lived here for more than 10, 20, 30+ years may have been born here, and lived and served your whole/adult life here. i know people in the same position in Western countries, are granted citizenship or at least residency rights and thus invest whatever they earn in their host country and cease to be ‘expats’.

    Give expat’s more rights to stay, to apply for naturalization, to buy property, to invest without a Saudi sponsor, and or a male guardian, the money will not leave the kingdom I assure you. If I could buy a home here, I would jump at the opportunity of not wasting my money on rent. I know that recently expats have been allowed to purchase property without a saudi sponsor but apparently you cannot sell it to another expat?!(basically this means you can sell it to a saudi—which means you will not get the price are looking for-) and there is an overall lack of transparency and property rights for expats are not well defined.

    It is a two-way street, give us rights, we’ll give you our money!

    I personally hope this is just ‘silly talk’, because it makes no sense, and as it is you will have to allow expats to take their money when they leave on final exit, so unless you want all expats leaving on final exit every year, then coming back 2 months later on a new contract this isn’t going to work. If they do go through with it I’m sure they’ll come creative accounting legal procedures to endure the salary is paid directly into a foreign bank account , the money will never be in the kingdom :-)

    Sorry Carol- I’ve gone on a rant, but this touched a nerve

  11. This is a quick way to get rid of quite a few workers, especially int he maid/driver/help category, If they can’t send money home and they cannot bring their families to saudi,why on earth would someone want to work there ..
    Maybe the wealthy expats will stay and do some creative accounting :-)
    i feel bad for the poor ones, they are not educated, don’t know all th etricks and if they can’t send most of their money home what will they do? this will never work, either KSA will implement it and most people will leave or try to in a few yrs. or this is just talk ..

    From the kingdon’s side they can bring any rule they want it’s their country , their right..but instead of this limit it will bebetter off if they don’t issue visa’s itself, that way no one can come and the jobs can be filled by saudi’s who’ll spend the money there.

  12. I don’t know if punishing expat workers is a solution for Saudi Arabia’s unemployment problem. So, much of the problem in Saudi Arabia is created by an unwillingness to face facts. If women were allowed freedom of movement you would not need foreign drivers. If sexual segregation weren’t mandated you would see many women working as shop assistants. If you want to keep outdated and foolish social laws you will keep needing to hire foreign help.

  13. Seems most expats are punished just on general principle in KSA so now they want to add an other. Who will do their dirty work for them? Of course the American/Brit/Canadian/European ex-pat will have ways around the problem. Anyway we all know KSA is ‘special’. Sometimes one just has to shake their head in wonder at what goes on.

  14. how sad for the people back home who rely on their family members

  15. I am an expat that worked in the magic kingdom in the early ’80’s. Back then we could do whatever we wanted to with our money. You could only buy so much gold/electronics/moonshine/etc. If the expat community is limited as to what they can send out of the country, the kingdom will lose the workforce that keeps this country going. My experience has been that the Saudi’s do not have the work ethics for professional type jobs. The expect to start at the top of the ladder instead of working there way up.

  16. Hello Farah. I’ve been looking to purchase some property here and the bank here as well as many real estate agents have told me that I can purchase property here without having a Saudi national sign or be a partner. They told me that it was a recent change in real estate laws.

  17. I am here to provide my family, for which I left my study. A good amount of my money is being spent for my Sister’s education. So must send money in every month so they can survive.

    Felicia, I did not know that,
    As a foreigner I cant own a land or a house either. The worst thing is, they will must contact with my sponsor to know that it was “legal”. I have a shop of my own but I’m still paying huge amount of money to my sponsor for sponsoring me and for naming him in my shop’s documents.
    Last year I went one of Al Rajhi brunch for opening my saving account but they refused me as I hold a house Driver position!!! They told me, ” a house driver is not allowed to Apne an account” … So??? What I’ll do with my money in here where I am not allowed to keep an bank account, to use my name in documents of my shop, where Im not allowed to do an Independent business. I am still incresing by invetment in my shop on regular basis, but is it secure to invest your total money in Saudi when you dont know when will the Law change and would force you to leave! I always in fear, dont know when will my sponsor betray, when the country law wil change…. Etc.

    Last but not the least, dose not matter how much they change their law, dose not matter how much they make it hard for foreigners. They will be in need of foreign laborer and and the people from developing and under developing country will be coming in here. Saudi Arabia is the biggest market for south asian laborers. And the remittance play a major role in south asian economy…..

  18. I know in Oman they are going through Omanization and there have been some complaints that the Omanis hired to be taxi drivers, hire for retail and other areas are usually late and don’t take the job quite as seriously as their exapts have in the past. Makes me wonder if Saudiazation takes place what the outcome might be.

  19. The successful businesses will stay and those businesses which are not successful or have the wrong employees will either enforce their employees to comply or the business will not last.

  20. I am against limiting the amount of money an expat could send to his/her home country. However, I am in favor of the idea of taxing expats when they want to send their money abroad

  21. I don’t have a problem if any country limits the % of guest /foreign workers into the country..in order to solve unemployment among their own locals. Every country has a right to determine its own economic destiny..without harming their own citizens.

    Not convinced that capping % of ex-pat’s earned income leaving Saudi Arabia could be effectively monitored.

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