END OF KAFALA SYSTEM IN SAUDI ARABIA

• Saudi Green Card = End of Kafala System?
• Benefits of Saudi Green Card System
• Limitations of Saudi Green Card System
• How will the Kafala System be abolished? Or Will it?

We recently broke the story on the "Saudi Green Card" system. However no actual details were provided by prince Salman in the interview with Bloomberg. What was immediately clear was that millions of expats in Saudi Arabia were happy with the announcement. The young prince stated that the Saudi Green Card system would allow Saudi Arabia to generate a staggering 10 Billion USD every year.

How does one go about bring a change so big and better yetwhy?

A recent interview conducted by a local news publication reported that Nidal Ridwan, chairman of the Federation of Labor Committees in the Kingdom, said that he expected the formation of an autonomous body to implement the new Saudi Green Card system. Naturally once the card is issued it would be integrated with the Labor office and Jawazat. Currently, foreigners are only allowed to either come the the Kingdom thru sponsorship or SAGIA. The new system would allow expatriates to be there own sponsors.

Why offer permanent residency?

The kafala system which is currently in place is broken. Under the kafala system, a migrant worker's status is bound to an individual or sponsor for the contract period. Many expatriates are already doing businesses on the name of a Saudi sponsor, Tasattur. Tasattur, "bans foreigners from investing in business activities for which they have not received any license. A Saudi who allows a foreigner to invest in such ventures by using his/her license or name would be punished under the law for covering up illegal business." The government in January of 2015 launched a 3 pronged campaign to decrease tasattur, however the campaign wasn't effective on a national level. The system is ineffective due to tasattur and visa trading. However, it does provide many nationals with livelihood.

Billions in remittance would be decreased with the Saudi Green Card System

The main target for the Kingdom is to close the budget deficit. The Saudi Green Card system would be a "quick fix." Those that are already conducting illegal businesses on the name of Saudi's would instantly apply and start paying fees. If nothing else the government would be able to charge Zakat which is usually calculated at 2.5%.  Expect to pay more than nationals for all activities. Where permanent residency would be a huge plus.

What will happen to the Kafala system?

The question is will the kafala system be completely abolished or will the Saudi Green Card system be a supplement to the current system like the investor visa?

We believe that both systems will be run simultaneously. The Green Card System will be available on a point system similar to that used by first world countries. If you have a highly valued skill or the investment, you will get permanent residency. Under such a system, permanent residency is given to doctors, engineers and specialist. On the other hand, if you intend to invest a considerable amount you would also be entitled to permanent residency. The Saudi Green Card would eliminate one of the biggest pitfalls in buying property in Saudi Arabia. Currently, as a foreigner you are by law allowed to buy property, the issue is once your Iqama or Muqeem expires you have to sell the property and leave the country.