The Ministry of Human Resources and Social Development in the Kingdom of Saudi Arabia announced a significant update to the mechanism for calculating Saudization ratios within the “Nitaqat” program. Under this new update, documenting contracts through the Qiwa platform a fundamental and mandatory requirement for counting Saudi employees towards the Saudization ratios set for establishments, effective April 15, 2026. This strategic step comes as part of the Ministry’s ongoing efforts to enhance transparency, increase the reliability of labor market data, and improve the experience of establishments in managing their contractual relationship with employees by unifying the source of contract data and linking it electronically.
The importance of documenting contracts through the Qiwa platform in the labor market
The decision to mandate contract documentation through the Qiwa platform is a natural extension of the historical development witnessed by the Saudi labor market. Since the launch of the Nitaqat program in 2011, the Saudi government has sought to incentivize private sector establishments to employ Saudi citizens and reduce reliance on expatriate labor. In the past, challenges lay in data discrepancies and the difficulty of verifying the authenticity of paper contracts, sometimes leading to irregular practices such as "sham Saudization." With the launch of Saudi Vision 2030, the urgent need for comprehensive digital transformation became apparent. Therefore, the Qiwa platform emerged as the ideal technological solution to ensure accurate electronic documentation of employment relationships, eliminating manipulation and safeguarding the rights of all parties.
The economic and regulatory impact of the new localization decisions
This regulatory update has far-reaching implications at the local and regional levels. Locally, it will create a more stable and secure work environment for Saudi citizens, ensuring they receive their full contractual rights without compromise. It also promotes fair competition among companies, rewarding those that genuinely commit to Saudization. Regionally and internationally, such robust and transparent regulations will improve the Kingdom's ranking in global labor market efficiency indices, making the Saudi economy more attractive to foreign investment seeking a clear and reliable regulatory environment, and supporting the labor market strategy aimed at building a strong and sustainable economy.
Details of the regulatory decision and implementation date
This important update is based on Cabinet Resolution No. (195) dated 4/4/1443 AH, which assigns the regulation and management of the contractual relationship between establishments and employees to the Ministry of Human Resources and Social Development. This includes full oversight of the documentation, procedures, and regulation of employment contracts in the labor market. The Ministry has categorically affirmed that the electronic documentation of Saudi employees' contracts is a fundamental requirement for their inclusion in Saudization ratios within the Nitaqat program. The Ministry urged all establishments to expedite the completion of their employees' contract documentation via the platform before the deadline of April 15, 2026, to ensure accurate calculations and avoid any negative impact on the establishment's classification within the program, which could lead to the suspension of certain vital services.
Qwa Platform: The unified digital portal for the business sector
The “Qiwa” platform is the unified and primary digital portal for labor sector services in the Kingdom. It provides a comprehensive suite of electronic services that enable establishments to easily manage employment contracts and comply with relevant regulations. The platform has proven its significant success, having witnessed the creation and renewal of over 12 million electronically documented employment contracts to date. Through these figures, the Ministry underscores the platform's pivotal role in enhancing the transparency of contractual relationships and the stability of the work environment, supporting the objectives of digital transformation and achieving the overarching goals of the labor market strategy, which positions the Kingdom among the world's leading nations in terms of both labor and economic development.
