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Saudi Arabia is the largest economy in the Middle East, and one of the world’s top oil producers. Its strong economy offers opportunities for businesses in various sectors.
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Saudi Arabia has a stable political environment, which is appealing to businesses seeking to operate in a secure and predictable market. Situated at the crossroads of Asia, Europe, and Africa, Saudi Arabia serves as a strategic link for businesses to access markets in the Middle East and North Africa.
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The national minimum wage in Saudi Arabia is 4,000 SAR per month, this equates to roughly $1,066.
Standard Working Hours
The standard working hours in Saudi Arabia are typically 8 hours a day.
The working week cannot exceed 48 hours. During Ramadan, working hours are reduced to 6 hours a day. Employees should be given break or rest period after working for 5 hours consecutively.
The standard work week is Sunday – Thursday.
If working overtime, an employee should receive a 150% hourly rate for the additional hours worked. Once the employee has exceeded the standard 48 hours, that is considered as overtime.
In Saudi Arabia, the payroll schedule can be either on a weekly or monthly basis. For weekly employees, the employer is required to process payments on a weekly basis, while payments for monthly employees should be made at least once per month.
Paid time off
Employees with a tenure of up to five years are eligible for 21 days of annual leave, whereas employees with over five years of service can enjoy up to 30 days.
Workers have the right to a total of 120 days of sick leave. During the initial 30 days, they will receive their full salary. For the subsequent 60 days, they will be compensated at a rate of one-third of their regular pay. There will be no compensation for the final 30 days of illness.
Sick leave usually paid by the Employer. Employees are required to provide a medical certificate for all sick days.
Women employees have the right to 10 weeks of maternity leave with compensation. This leave period commences 4 weeks prior to childbirth. Workers who have completed a minimum of one year of service are eligible for maternity benefits equivalent to 50% of their usual wages. Those with up to the 3 years of service are entitled to receive their full regular pay.
The father or partner is granted a duration of the 3 days of compensated paternity leave subsequent to the birth of the child.
Termination of Employment
The procedure for ending employment differs depending on the work arrangement, determined by the nature of the employment agreement and the rationale behind the termination, both of which must be clearly outlined in written form.
Employers can terminate employees for valid reasons, which are typically defined by the Labor Law. Valid reasons might include poor performance, violation of company policies, or economic reasons.
Employees who are being terminated without proper justification have the right to receive compensation amounting to 15 days’ salary for each of the initial five years of employment, in addition to one month’s salary for each subsequent year.
It is not permitted to terminate workers whilst they are on maternity or medical leave.
The Labor Law requires that employers provide a notice period to employees prior to termination. The notice period varies depending on the length of the employee’s service with the company.
Probation periods are typically limited to 90 days but can last for up to 180 days with the consent of both the employer and employee.
Saudi Arabia had various types of visas and entry requirements for different purposes, including tourism, work, business, and religious visits.
Usually, business travellers apply for a Business Visit Visa from a Saudi consular post after obtaining an official invitation letter approved by the government from a sponsor in Saudi Arabia. These visas typically remain valid for three months (single entry), 12 months (multiple entry), or up to five years (multiple entry) for citizens of nations that have bilateral visa agreements with Saudi Arabia. The maximum permitted length of stay on a single-entry visa for durations of three and six months is 30 days, while for visas with differing validities, it extends to 90 days.
The standard of VAT in Saudi Arabia is 15.00%.