Saudi Arabia PEO Services

The Kingdom invests internally to create a business-friendly environment. Saudi Vision 2030, unveiled in 2016, focuses on developing Saudi Arabia's health, education, infrastructure, and tourism sectors. In Saudi Vision 2030, the country aims to increase global investments and become an international hub for Afro-Eurasia.

The Kingdom has seen a change in the national business model as the country emphasized privatization, making it an excellent place to expand and grow business rapidly. Additionally, international investors can be exempted from substantial income tax or even a lot of sales tax. This tax rebate attracts many international investors since they would like to pay as little tax as possible.

Recently, Saudi Arabia has experienced a lot of political and cultural reforms, especially for Saudi women. Foreign investors can now ease up on some age-old customs and traditions that held them back in the past.

Saudi Arabia's openness toward cosmopolitan investors also promotes economic growth in the region and attracts more foreign investment. Riyadh is considered one of the safest cities globally because the level of violence is considerably lower than that of some of the major cities in the United States or Europe. The country is also a hub for modern health care and education sectors. The Saudi people are warm and hospitable, while at the same time supportive and willing to help others.

Employment Information

• Saudi Arabian law prohibits employees from working more than 48 hours per week over six days; however, senior employees and managers may be exempt from such limits.
• An employee should not work more than 10 hours a day, or 60 hours in a six-day week. Friday is a rest day for everyone.
• The working week cannot exceed 36 hours during Ramadan

Overtime

• An employee who works overtime is entitled to 150% of their regular salary
• Hours worked on Fridays or public holidays are included as overtime
• The maximum of overtime hours an employee can work is 481 annually

Employer's Contributions

The contributions necessary for an employer to pay are as follows:

• Social security – 10%
• Social Insurance (GOSI) – 9%
• Unemployment Insurance – 1%
• Occupational Hazard – 2%
• WHT (Withholding Tax) – 5-20%*
• Total – 27-42%

* Withholding tax differs based on where the employer is based. In countries with which Saudi Arabia has tax treaties, employers often qualify for WHT relief on dividends, interest, and royalties. Foreign investors are recommended to carefully review their country's tax treaty with Saudi Arabia, ensuring that the correct amounts are being withheld.

Cultural Information

• In Saudi Arabia, formal dress code is the norm for meetings. Casual language, mannerisms and attitudes should be avoided. When communicating with Saudi Arabian business colleagues, use their full titles. In Saudi Arabia, formality and respect is valued.
• When interacting with Saudi colleagues, it is also essential that you pay attention to their hierarchy. Top executives have decision-making authority, so they should always be addressed accordingly.
• Work typically begins on Sunday and ends on Thursday. Unlike in Western countries, Saudi Arabia designates Fridays and Saturdays as days of rest.
• Saudi Arabian colleagues are likely to set up a series of meetings to get to know you before closing a deal. Business in Saudi Arabia is relationship-driven and takes time to establish.
• Personal conversation and prayer breaks during meetings are common occurrence in Saudi Arabia. Business agendas are flexible in Saudi Arabia.
• All foreign expats and visitors must be aware that the sale, consumption and manufacturing of alcohol is strictly prohibited in Saudi Arabia.

Impacts from COVID-19

As is common in other countries across the world, the COVID-19 pandemic accelerated remote working practices in Saudi Arabia. Remote working and flexible working patterns have continued to be prevalent in a number of sectors in the country.