Ownership Saudization is fixed by the Ministry of Investment, activity by activity: 40% for communications, 30% for supportive communications, and 25% for professional activities with a Saudi partner. Workforce localization is a separate system run by the labour ministry through activity-specific localization decisions, and your Saudi headcount also decides whether foreign staff are charged SAR 700 a month or SAR 800 a month.
Rule one: who owns the company
This one is settled before you hire anyone, and it is not negotiable at the counter. The ministry's activity table covers 8 listed activity types and gives a minimum Saudi participation percentage for those that carry one. Where the percentage exists, it is a condition of registering the activity at all. Where an activity is not in the table, the table sets no Saudi share for it.
Professional activities add a second test on top: a non-professional partner's share must not exceed 30%, and both partners must be licensed in the same field. The Ministry of Commerce applies its own version at incorporation. In a professional company, licensed Saudi partners must hold at least 25% and licensed partners at least 70%.
Show the numbers
| Activity | Minimum Saudi share |
|---|---|
| Trading with a Saudi partner | 25% |
| Professional activities with a Saudi partner | 25% |
| Supportive communications activities | 30% |
| Communications activities | 40% |
Rule two: who is on the payroll
This is the one usually meant by Nitaqat. It is administered by the Ministry of Human Resources and Social Development, and its requirements arrive as ministerial decisions aimed at particular activities rather than as a single national percentage. The ministry's decisions list includes localization percentages for operation and maintenance contracts, and its guide to localizing outlets covers 12 economic activities.
That structure matters for planning. Your obligation depends on what your establishment does and how many people it employs, so a percentage a peer quotes from their own sector may not be your percentage.
Where the two rules meet your costs
Payroll Saudization is not only a compliance target. The labour ministry's levy on foreign workers is set by the same comparison: SAR 700 a month per foreign worker where foreign workers do not exceed the number of Saudi workers, and SAR 800 a month where they do. On the ministry's printed annual figures, the difference between the two tiers is SAR 700 per foreign worker per year.
So the first Saudi hire changes two things at once: your position against any localization decision that covers your activity, and the levy rate on part of your foreign headcount. Model them together. The staff cost guide shows the levy arithmetic.
A third place Saudization appears: the trading commitments
A wholly foreign trading company registers under conditions that reach into its workforce. The investor guide requires it to train 30% of Saudi employees every year, to meet the localization rates the labour ministry sets, and to plan for Saudis in senior management over its first five years. Those obligations sit in the Ministry of Investment's guide, not in a labour decision, which is why they are easy to miss. The capital guide sets out the rest of that route.
What this site will not tell you
We are not publishing band names, colour tiers or the percentage attached to each. Those figures move by sector and by year, and we could not open an official page stating the current set. A cost site that invents a compliance threshold is worse than no cost site.
Get your establishment's current band and target from your own labour platform account, where it is shown against your actual headcount, and put the date on it.
Why the two rules get confused
Because both are answered with a percentage, and because a consultant selling company formation naturally talks about the ownership rule while one selling HR services talks about the payroll rule. If someone tells you "you need a Saudi share", find out which of the two they mean before you redesign your cap table or your hiring plan.
An order of operations
- Confirm your exact activity code, since both rules hang off it.
- Check whether that activity carries an ownership floor, and settle your shareholding around it.
- If you are registering a fully foreign trading company, add the training and localization commitments to the plan.
- Register, then open the labour file and read your localization target from your own account.
- Plan the first Saudi hires against that target and against the levy tier, not against a figure from an article.
Frequently asked questions
Does Saudization mean a Saudi must own part of my company?
Only for the activities the ministry's table lists with a Saudi share, such as communications at 40%. Most activities are not in that table.
Does my Saudi headcount change my costs?
Yes. It decides whether the levy on each foreign worker is SAR 700 a month or SAR 800 a month.
Where do I find my Nitaqat target?
In your establishment's own labour platform account. The labour ministry publishes the underlying decisions by activity, such as the outlets guide covering 12 economic activities.
Every figure on this page is taken from the issuing body’s own page, with the date that page was opened. How the figures are checked