A foreign company can hire in Saudi Arabia in two ways: establish its own entity (LLC or branch) and sponsor employees directly, or hire through an Employer of Record such as Tamra, which employs the person under an existing Saudi entity. Either route carries the same obligations — an Arabic employment contract, GOSI registration, salaries paid through the Wage Protection System, Saudization (Nitaqat) planning and, for foreign nationals, work visa and Iqama sponsorship.
Employment contracts
Contracts must be in Arabic; bilingual versions are common, but the Arabic text governs in a dispute.
Fixed-term and indefinite contracts carry different termination rules and end-of-service consequences.
Probation is limited to 90 days, extendable to 180 by mutual written agreement.
Salary, job title, working hours and leave entitlements must be written, signed and registered.
End-of-service benefits accrue from day one and must be carried on the books.
Payroll, GOSI and tax
All salaries must be paid through the Wage Protection System (WPS).
GOSI: 12% employer (2% SANED + 10% pension) and 10% employee, calculated against a capped wage.
Saudi Arabia levies no personal income tax on employment income.
Housing allowance is customarily 25% of base salary; transport and other allowances are common but negotiable.
End-of-service: half a month's salary per year for the first five years, then one month per year thereafter.
Saudization (Nitaqat)
Companies are placed in colour bands based on their ratio of Saudi nationals to total workforce.
Lower bands face restrictions on visa issuance, work permit renewals and government services.
Some positions are reserved exclusively for Saudi nationals.
Required ratios vary by sector and company size — there is no single national number.
How long hiring takes
With an existing entity and an open block visa, a Saudi national can be onboarded in one to two weeks. Hiring a foreign national typically runs six to ten weeks end-to-end, covering visa issuance, embassy legalisation, entry and Iqama. Through Tamra's Employer of Record, foreign hires typically complete in four to eight weeks and Saudi hires within five working days.
Frequently asked questions
Can a foreign company hire employees in Saudi Arabia?
Yes. Foreign companies can hire either by establishing a local entity (branch or LLC) or by using an Employer of Record like Tamra, which allows compliant hiring without setting up a company.
Is there personal income tax in Saudi Arabia?
No. Saudi Arabia does not levy personal income tax on employment income. Employers are required to make GOSI contributions for their employees.
What is the typical cost of hiring an employee in Saudi Arabia?
Beyond base salary, employers should budget for GOSI (12%), medical insurance, housing allowance (typically 25% of base), transportation, and end-of-service. Tamra can provide cost projections for your specific case.
Can foreign employees be hired remotely without entering Saudi Arabia?
No. Saudi employment is anchored to a residency permit (Iqama) issued in-country. The work-around for short engagements is the Temporary Work Visa.
What happens if Saudization (Nitaqat) targets are missed?
Sponsors in lower Nitaqat bands face restrictions on new block visas, work permit renewals and Iqama transfers. Persistent non-compliance can suspend hiring entirely.
Begin your first hire in the Kingdom
Tell us the role, the salary and whether the candidate is Saudi or foreign. We come back with a compliant route and a fully-loaded cost. Talk to Tamra about hiring.