Saudi Expatriates: Why Scrapping the Expat Levy Is a Game Changer for Industry
Saudi expatriates are set to benefit significantly after Saudi Arabia announced the removal of the expat levy on foreign workers employed in licensed industrial facilities. The landmark decision marks a major shift in the Kingdom’s industrial and economic policy, reinforcing its commitment to long-term growth, competitiveness, and investment-friendly reforms.
The decision was approved during a Cabinet meeting chaired by Crown Prince Mohammed bin Salman, reflecting the strategic importance of industrial development under Vision 2030.
What the Expat Levy Meant for Saudi Expatriates
For years, Saudi expatriates working in factories were indirectly affected by the expat levy imposed on employers. While companies paid the fee, the cost often translated into tighter hiring, limited salary growth, and reduced expansion.
For labor-intensive industries, the levy became a recurring financial burden, particularly during periods of global economic pressure.
Lower Costs and Stronger Competitiveness for Industry
The removal of the levy immediately lowers operational expenses for factories. This allows companies to:
- Reinvest in automation and technology
- Expand production capacity
- Improve worker training programs
- Enhance productivity and efficiency
According to Minister of Industry and Mineral Resources Bandar Alkhorayef, this was one of the most challenging policy decisions, but one that prioritizes sustainable industrial growth over short-term revenue.
This move also strengthens Saudi-made products in international markets by reducing production costs and improving price competitiveness.
A Strong Signal to Local and International Investors
For investors, policy stability is critical. Scrapping the levy sends a clear message that Saudi Arabia supports manufacturers and long-term capital investment.
Currently, the Kingdom offers:
- Over 800 industrial investment opportunities
- Total estimated value of SR1 trillion
- Focus on advanced manufacturing and high-value supply chains
This reform enhances Saudi Arabia’s appeal as a regional manufacturing hub.
https://www.vision2030.gov.sa/
What This Means for Saudi Expatriates and Localization
Although the levy applied to foreign workers, officials emphasized that Saudization remains a priority. The government believes that profitable industries create more jobs, not fewer.
Key figures:
- Industrial employment up 74% since 2019
- Workforce reached 847,000 employees
- Localization rate increased to 31%
A stronger industrial sector enables companies to hire, train, and retain Saudi talent while maintaining a balanced expatriate workforce.
Strong Industrial Growth Supports the Policy Shift
Saudi Arabia’s industrial growth over the last five years justifies the decision:
- Industrial facilities grew from 8,822 (2019) to 12,000+ (2024)
- Industrial investment reached SR1.22 trillion
- Industrial GDP increased 56%, exceeding SR501 billion
Projections estimate industrial GDP could reach SR895 billion by 2035, with manufacturing playing a central role in economic diversification.
Why Scrapping the Expat Levy Matters Right Now
As global supply chains shift and countries compete for manufacturing investments, Saudi Arabia’s decision positions it as a cost-efficient and policy-stable destination.
For Saudi expatriates, this means:
- More job security
- Better long-term opportunities
- A stronger industrial ecosystem
For manufacturers, the message is unmistakable: Saudi Arabia wants factories to invest, grow, and compete globally.
Final Takeaway
Saudi expatriates and industrial investors alike stand to gain from this decisive reform. By scrapping the expat levy, Saudi Arabia reinforces its commitment to economic resilience, industrial leadership, and sustainable growth under Vision 2030.
This is not just a policy change—it’s a strategic move shaping the future of the Kingdom’s industrial landscape.
