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We are excited to share the latest edition of the Law Update, beautifully and appropriately titled “Sustainable Horizons: The Saudi Arabian Vision.” Giving special honor to the Kingdom’s 2030 vision, this update focuses on a collection of both informative and inspiring articles.
For those in construction, you can learn about how the tendering environment impacts risk-pricing for contractors, the updates on the legal framework of the construction industry and how contractors can protect themselves against financial difficulties.
There is good news too from the kingdom’s banking sector, from which the practice of “Open Banking” is being pushed for! But what is open banking? We’re answering that too.
Also . . . Are there any women trail blazers in Saudi Arabia you can name? We’ll help you with that. We cover how the Middle East has been making strides in empowering women in the entrepreneurial space,most notably in STEM fields.Read the full edition
Mohsin Khan - Partner - Employment and Incentives
Zahir Qayum - Senior Counsel - Employment and Incentives
On 11 November 2019, the Kingdom of Saudi Arabic (‘KSA’) issued Premium Residency status to non-Saudi nationals for the first time in its history, marking another milestone in its progress towards Vision 2030. In total, 73 Premium Residencies were issued to individuals with 19 different nationalities. The Saudi Premium Residency Centre announced that applications were received from thousands of applicants representing over 50 nationalities from within and outside of KSA. The Premium Residencies were issued to individuals from a broad spectrum of professions including investors, doctors, engineers and financiers.
In this article, we look at the background to the new Premium Residency status, as well as the eligibility requirements for applicants and benefits of holding Premium Residency in KSA.
The immigration status of non-Saudi nationals has traditionally been based on employment status where an individual’s employer would act as their sponsor for residency purposes. Under this employment-based immigration system, non-Saudi residents are subject to certain restrictions; for example, non-Saudi nationals can only work for their employer and sponsor and cannot freely move to another employer without the existing sponsor’s consent to transfer their sponsorship. Non-Saudi residents are also unable to establish their own businesses within KSA whilst being employed by their sponsor. Similarly, non-Saudi nationals residing in KSA under their employer’s sponsorship are unable to easily own real estate in their own name. Importantly, if a non-Saudi national’s employment ends, they are required to leave KSA unless they are able to transfer their sponsorship to a new employer. Although it is possible for foreign companies to invest in KSA in compliance with the Foreign Investment Law, foreign individual investors cannot do so directly, thereby limiting the potential scope of foreign investment within KSA.
Following the announcement first made in April 2016 by Crown Prince Mohammed Bin Salman of a ‘green card’ for expats, the KSA government passed the Privileged Iqama Law by Royal Decree No. M/106 dated 10/9/1440H (corresponding to 15 May 2019) (the ‘Law’).
The Law allows a non-Saudi national to apply for the Premium Residency either on a permanent basis or for a one-year period that is renewable. The cost of the permanent Premium Residency is SAR 800,000 (equivalent to US$213,333) and the cost of the one-year renewable Premium Residency is SAR 100,000 (equivalent to US$26,666). An applicant for the one-year Premium Residency will obtain a reduction of two percent per year on a cumulative basis if they pay the fees for more than one year in advance.
All applicants for Premium Residency in KSA must satisfy the following conditions:
The Premium Residency gives the holder the following rights and benefits:
The Premium Residency is a welcome step towards opening up investment opportunities in the KSA to non-Saudi nationals and its introduction comes at a time when the KSA is continuing to implement a number of reforms with a view to facilitating more foreign investment as the government looks to diversify the country’s economy away from the oil sector. The high costs associated with both types of Premium Residency suggest that it is targeted mainly at entrepreneurs, who will be in a position to invest in the KSA and create job opportunities, or highly skilled workers.
However, notwithstanding the significant costs of the Premium Residency, the large number of applications received from individuals around the world for the Premium Residency since the scheme was opened in June 2019 shows that individual investors are attracted by the range of opportunities available in KSA as the country broadens its economy into new sectors. The government hopes that the Premium Residency scheme will boost the economy through the establishment of new businesses by foreign investors and thereby create employment opportunities for Saudi nationals. We expect to see increased commercial activity by foreign entrepreneurs that have been granted Premium Residency which is likely to increase competition within the private sector in KSA and, ultimately result in a more diverse economy.
Al Tamimi & Company’s Employment & Incentives team advises on a range of business immigration issues, including the new Premium Residency scheme. For further information please contact Mohsin Khan (firstname.lastname@example.org) or Zahir Qayum (email@example.com).
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