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Jeddah — Companies in the red and yellow categories of the Nitaqat Saudization program can benefit from the government’s reimbursement initiative if they hire more locals within 12 months.

Custodian of the Two Holy Mosques King Salman on Friday approved a scheme to reimburse some of the companies who struggled to pay expatriate work permit levy and waive the fee hikes for some who weren’t able to pay.

The government is allocating SR11.5 billion out of SR200 billion for reimbursements under the decision.

“This initiative will support private sector companies, help them overcome the obstacles and achieve their goals and encourage them to expand employment of Saudi citizens,” Minister of Labor and Social Development Ahmed Al-Rajhi tweeted on Friday.

Only companies that had a higher or equal number of Saudi employees versus expats will be eligible for the reimbursement or waiver of fees.

A document issued by the Labor Ministry said that six months after the beginning of the reimbursement initiative companies that have not settled their collective invoice and are in the yellow or red category will be deprived of some services.

“The decision will have a huge positive impact on the Saudi economy and especially the manpower intensive construction sector, which was the worst hit by the collective invoice,” Osama Al-Afaliq, head of the Saudi Contractors Association, told Reuters.

In its fiscal balance program announced in 2016 and implemented in 2017, Saudi Arabia said it would gradually increase the fees for hiring expatriates and obtaining visas for their dependents to encourage companies to hire more locals.

It also changed the system of payment from an annual work permit renewal to a one-time lump sum payment at the beginning of the year accounting for each foreign worker employed by the company — a so-called collective invoice.

The annual fee hikes, rising gradually to 2020, were seen as crucial to Riyadh’s plan to create more jobs for Saudis. — With agencies