Saudi Arabia

Introduction

Saudi Arabia, also known as the Kingdom of Saudi Arabia, is located in western Asia. It is a huge state bordered by many countries, including Iran, Kuwait, Jordan, Oman, Qatar, Yemen and the United Arab Emirates.

Saudi Arabian history is very rich showing some of the world’s earliest traces of human activity. Many archaeological treasures have been discovered here, including a sandstone statue dating back 6,000 years. Islam was founded there in the early 7th century, and the country is often referred to as “The Land of the Two Holy Mosques” in reference to Mecca and Medina, the holiest places in Islam.

Saudi Arabia is an incredibly wealthy nation. With extensive oil and natural gas reserves, it is the second largest producer of oil in the world and the largest oil exporter in the world. It is also the only Arab country that is part of the G-20 major economies. It is also thriving in other areas, such as agricultural production, mining and real estate. Further, development in engineering, finance and IT is steady. As such, there is demand for expert consultants in these sectors.

The country’s official language is Arabic, though English is widely spoken as it is a compulsory second language in school. Working in Saudi Arabia offers many benefits, including high salaries, low tax rates and low accommodation costs.

While freelancing or contracting in Saudi Arabia offers many benefits, it is important to bear in mind that this is a very conservative country with a modest dress code and a ban on alcohol. Adapting to the culture and respecting local habits is a must for anyone wishing to work here.    

Registry/Registration

People entering Saudi Arabia must obtain a visa unless they come from a visa-exempt country. These are Bahrain, Oman, Kuwait and the UAE.

There are three visas you can apply for:

  • Employment visa
  • Commercial visit/Business visit visas
  • Family visit or residence visas

To obtain a Saudi Arabia employment visa you must submit an application to the Saudi embassy or consulate in your home country.

You will also need at least the following documents:

  • Proof of professional qualifications
  • Valid passport
  • Proof on online payment of the visa
  • Three copies of a signed medical report
  • A police report of any criminal record
  • A certified letter of employment from your sponsoring company
  • A signed copy of your employment contract
  • A certified copy of your university diploma

Visas are issued through the Ministry of Labour. You will also need a residence permit in order to live and work in the country. The processing time can take anywhere from two weeks to six months to complete, and the cost varies depending on the Saudi embassy you apply to.

The process of obtaining a working visa in Saudi Arabia can be complex without the support of a knowledgeable contracting company such as Chesterfield. Chesterfield can handle the entire process to ensure you are compliant with applicable laws and regulations.

Income Tax

Saudi Arabian contracting is a highly attractive prospect since the country has very low fees for expats in exchange for services. While there is no personal income tax for Saudi Arabians, in 2018, a new tax law was implemented, which asks non-Saudi and non-GCC individuals to pay a flat income tax rate of 20%. Non-residents who do not have a permanent establishment in the country are therefore subject to withholding tax on their income derived from a source in the country.

Working in Saudi Arabia as a self-employed individual or contractor is certainly worthwhile as the taxes are much lower compared with other countries, where professionals can expect to pay taxes worth up to 40-50%.

The individual will be engaged on payroll and the relevant taxes and social security is deducted at source on a PAYE basis. Payments will be made to the relevant authorities on behalf of the employee.

Social Security

Employers must pay Saudi social insurance tax (GOSI) on behalf of their employees. Contributions are levied on basic salary, including housing allowances and certain commissions.

The social security rates in Saudi Arabia stand at 22%, which are paid on a monthly basis. Annuity branch contributions are not required with respect to non-Saudi employees. Employers must pay contributions for occupational hazards insurance at 2%, which is applicable to both Saudi and non-Saudi employees.

Chesterfield provides customised solutions designed to minimise your tax and social security liabilities within the boundaries of Saudi Arabian legislation. 

Employment Rules

Expats require correct work and residency permits to work in the country. To obtain a Saudi Arabia employment visa you must be sponsored by a local Saudi Arabian company. This will allow you to stay and work on short-term assignments as a contractor.

 

You will need a written employment contract spelling out the terms and conditions of your compensation, benefits and termination requirements. An offer letter and employment contract should stipulate the salary and any compensation amounts in riyal rather than a foreign currency.

If you are undertaking Saudi Arabia Freelancer Services for a period of two years or less, we recommend obtaining a Business Visit Visa, which is usually valid for 90 days but allows for multiple entries and can be extended once within Saudi Arabia.

We remain afloat of any changes to local employment laws in Saudi Arabia. Contact Chesterfield for the latest information.  

Banks

One of the first and most important things you must do when you arrive in Saudi Arabia is to open a bank account and understand banking procedures. Once you open your account, you will be able to settle monthly utility bills and make money transfers.

The Saudi Arabian Monetary Authority (SAMA) oversees banking activities in Saudi Arabia. There are many well-established banks to choose from, and the process of opening and operating your account is very easy.

There are a number of accounts to choose from including:

  • Savings account
  • International currency account
  • Joint account

Documentation needed includes:

  • A letter stating your name, Iqama (residence permit) and salary
  • Your Iqama
  • Original passport
  • Valid mobile phone number

To open your account you will need either Absher registration or registration via your chosen bank’s web page or app. While most banks allow you to make an application online, some do require your presence to verify your data and signatures.

ATMs are located throughout all cities and many offer free of charge use. International money transfers can be done online (after initial setup in-branch). While charges are applied, these are roughly average to transfers worldwide.

Corporate Structures  

Chesterfield provides Saudi Arabia employer of record services for clients that want to work in Saudi Arabia and run Saudi Arabia payroll. We also offer support in terms of local accounting and tax liabilities. As international experts, we carry out all procedures in accordance with local labour laws, and processes can be applied within a short period of time.

Chesterfield & Contracting in Saudi Arabia

Chesterfield can provide a wide range of contractor management solutions and payroll services in Saudi Arabia. We operate a number of Saudi Arabia employed solutions, umbrella solutions and self-employed schemes, all of which are designed to reduce any administrative complications or headaches. Our dedicated team works tirelessly to take care of your every administrative need. To learn more, please contact Chesterfield.