The Saudi government has announced a revolutionary facilitation for small and medium-sized enterprises in 2026 to further improve the private sector and create a more business-friendly environment in the Kingdom.
Under a new royal directive, organizations meeting certain conditions will receive significant reductions or, in some cases, full exemptions from the “Maktab Al-Amal” (labor office fee) for their foreign employees.
Conditions and procedure for fee exemption
According to the issued notice, this facility aims to reduce the financial burden on small businesses. Under the system, if an establishment has 9 or fewer employees, it may be eligible for this relief.
If the sponsor (employer) is registered with the General Organization for Social Insurance (GOSI) and is not employed elsewhere, he will receive a full exemption for the fees of 2 foreign employees.
If at least one Saudi employee is registered in the company, the number of exempt foreign workers increases to 4.
Fee amount and exemption limit
In Saudi Arabia, the monthly Maktab Al-Amal fee for a foreign worker is approximately 800 Saudi Riyals, which equals 9,600 Saudi Riyals annually.
Authorities have clarified that this relief applies only to labor (work permit) fees. Residency renewal (Iqama), medical insurance, and other government charges must still be paid as usual.
Saudi Vision 2030 and private sector
Under its Vision 2030, Saudi Arabia aims to shift its economy away from oil dependency toward the private sector and small businesses.
In the past, high fees on foreign workers created difficulties for small enterprises, leading to the closure of several businesses.
These new measures for 2026 aim to create a more competitive market and encourage both local and foreign investors to start small-scale businesses.
Economic impact on small businesses
According to the assessment of this decision, a small business could save approximately 38,400 Saudi Riyals annually for four employees, which can be reinvested into business expansion.
Increasing the exemption limit from 2 to 4 foreign workers when a Saudi employee is hired indicates the government’s strong focus on increasing local employment participation.
Reducing these fees will ease the financial pressure on employers and help stabilize the labor market.
Linking procedures through the “Qiwa” platform also shows that Saudi Arabia has fully digitalized its labor regulations to ensure transparency.
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