This is part 2 of my exploration of the many changes coming to KSA and how they’re affecting the expat workforce. As the Saudis are moving towards Saudization, they’re taking a keen look at those in the Kingdom on business visas and what they’re actually doing. We’ve seen massive crackdowns on certain Monday’s by the MOI police forces, which have resulted in mass detentions, lockups, and hefty fines levied against employers. The Ministry of Foreign Affairs has issued a further decree and has charged the Labor Ministry with converting all expats on business visas to an Iqama or face harsh penalties.
This leads one to wonder IF they should remain in the Kingdom on a business visa and IF they should continue to work as the situation becomes direr? First, it is imperative to address the reason why your on a business visa and have not been issued an Iqama. In the past 5 years, it has become increasingly difficult for contractors to purchase titles or visas, which are applicable for the actual job they intend to hire. You can say most of these positions are saturated. This has left many of the contractors vying for titles, which are less desirable and end up causing their employees a tremendous amount of headaches. Therefore, the immediate and current solution is to bring prospective employees over on a business or work visit visa to perform the exact same duties, as one on a work visa would partake.
This practice worked liked a charm and the Saudi expat force continued to boom. However, those on a business or work visit visa are not privy to a lot of the same privileges as those on a Saudi Arabia work visa. They cannot open a bank account, rent a car, invite their family, have tickets paid for, and many other privileges are unavailable. But the most important aspect of an Iqama for an expat and the host employer is the handling of money. This is exactly what has lead to the Saudi crackdown.
If you’re on Iqama, you personally do not pay Saudi taxes and your employer is taxed on your behalf. Also, those on Iqama have a much easier time transferring money out of the country, while keeping their tax rate low. Whereas those on business or work visit visas, will be taxed at their normal country tax rate and they may incur additional fees such as a monetary import tax. Furthermore, without an Iqama you cannot open a bank account and this will make it difficult to collect some your wages.
With all of the above being said, it still remains a tedious and time consuming process to get a work visa through one the KSA Embassies. There are many restrictions and hidden variables, which will delay/deny your visa. Therefore, until KSA introduces a better solution, the best option is to travel to Saudi on a business/work visit visa and take the chance with authorities.