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Will Saudi expat fees hurt the private sector?

Saudi expats

New monthly fees have been imposed on expats for their dependents in Saudi Arabia. However, according to one official, this may have an adverse effect on firms in the private sector, it was reported recently.

Abdullah Al-Maghlouth, a member at the Riyadh Chamber of Commerce’s Investment and Securities Committee, was quoted in Saudi newspaper Al-Watan­ saying that the private sector would struggle as a result of the new fees, which he claimed would make doing business in the Kingdom more expensive.

“The fees will have an adverse effect on the private sector including the contractors, the building material, the food and consumer products and will increase prices. The citizen will be harmed. This will also harm the attractiveness of the work environment in the kingdom,” he told the newspaper.

The fees will see expats in the Kingdom have to pay SAR 100 per month per dependent from January 2017. These fees will then go up by SAR 100 per year.

According to estimates, this will raise SAR 65 billion for the government by 2020.

However, according to business houses, this would increase costs for businesses employing expats in the Kingdom. The added cost of living would have to be factored into salaries, experts say.

For his part, Al-Maghlouth said that measures should be introduced to combat these negative effects. He suggested continued measures to encourage employing nationals, as well as to create the ability for expats to invest in special funds – meaning more of their earnings stay inside the Kingdom.

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