Saudi ‘green card’ system could raise SR37 billion from foreign workers

Author: PM editorial | Date: 13 Apr 2016

Organisations may also be charged to bring in staff beyond their current quota

Saudi Arabia is considering the introduction of a US-style green card system for resident expatriates.
 
The change to residency laws could raise SR37 billion a year and is part of a raft of potential tax reforms outlined by Deputy Crown Prince Mohammed bin Salman.
 
A similar sum could be raised by the introduction of fees for organisations that want to hire staff above their foreign worker quota.
 
Last year, a report by the McKinsey Global Institute said that KSA needed to “reinvent its economy beyond the age of oil” and reduce its dependency on oil revenue, in the face of a slump in global oil prices. And earlier this year, the Gulf nations agreed to a region-wide value-added tax (VAT) of five per cent, to begin by 1 January 2019.
 
The US green card permits foreigners to live and work in the country as residents for a maximum of ten years before they must apply for renewal. Immigrants can be sponsored by employers or can apply for cards in a random lottery. Other countries, including Australia, use points-based quotas to calibrate their economies by granting those from certain professions preferential treatment in the immigration system.
 
The Saudi citizenship system, in place since 1954, rarely grants citizenship to foreigners but Prince Mohammed gave no indication as to whether a new system would make permanent citizenship easier.
 
Nidal Ridwan, chairman of the Federation of Labour Committees, told the Saudi Gazette he believed that non-Saudi residents would be eligible for the same benefits and services that are open to nationals, including medical services and banking facilities.
 
It is estimated that Saudi Arabia is home to around 10 million foreign workers. One further implication of a change to the immigration may also be to significantly cut the level of remittances sent out of the country.