In a significant move to reshape the structure of the expatriate labour market, Saudi Arabia’s Ministry of Human Resources and Social Development (MHRSD) issued a ministerial decision on 6 July 2025, introducing a new skills-based framework for all expatriate work permits. This reform, which is now in full force, is more than a regulatory shift; it signals the Kingdom’s intent to compete globally on talent, not just trade.
A Structured, Skill-Based Workforce Model
Under the new framework, work permits are no longer uniform across the board. They are now divided into three categories as High-Skilled, Skilled, and Basic, each grounded in a transparent, merit-based system designed to ensure that workforce quality matches the Kingdom’s economic ambitions.
The High-Skilled category applies to individuals with advanced academic qualifications such as master’s degrees or professional certifications, often accompanied by significant sector experience. These are typically professionals in strategic or technically complex roles, such as engineers, healthcare specialists, data scientists, financial consultants, and senior managers. Entry into this category also considers factors such as age (to ensure career maturity) and wage levels that reflect market standards for such high-tier talent. Fluency in industry-relevant tools, leadership exposure, and globally recognised credentials will often be required to qualify.
The Skilled category captures those with mid-level qualifications, usually holding diplomas, bachelor’s degrees, or vocational certifications and several years of relevant experience. This group includes technicians, forepersons, specialist tradespeople, and mid-level professionals who support critical operational areas of business. Skills in this category are practical and applied, often validated through on-the-job training or accredited courses. Wages and job descriptions must reflect this intermediate level of capability, and permit approval will require that experience is formally recorded and substantiated.
The Basic category remains for workers who do not meet the academic or technical criteria of the above categories. While still permitted under the new framework, individuals in this segment will face closer scrutiny around role type, wage level, and compliance to ensure alignment with labour market regulations. The intent is not exclusion but elevation, pushing both employers and workers to improve capability, invest in training, and reduce long-term reliance on low-skilled labour.
Classification as a Compliance and Strategic Tool
This new model introduces a more disciplined structure to the employment of foreign workers. It places the responsibility on employers to not only meet wage and documentation thresholds, but also to justify the classification of roles based on actual skill requirements. Where previously permit approval may have been transactional, it is now strategic.
In effect, the classification system will reshape recruitment, payroll structures, workforce planning, and even how performance is managed internally. High-skilled roles will demand more rigorous screening, higher wage brackets, and more substantial justification. Skilled roles will require training records, competency mapping, and precise job function definitions. Basic category roles will be questioned if they are not phased down or upskilled over time.
Reinforcing the Goals of Vision 2030
This is a policy designed for transformation. The skill classification initiative directly supports the economic pillars of Vision 2030 by ensuring that the Kingdom attracts global talent with measurable impact, while simultaneously upskilling the local market and narrowing dependency on low-value labour. It ties into broader objectives of workforce nationalisation, public sector reform, private sector empowerment, and investment growth.
As the economy becomes more digitised, diversified, and driven by innovation, Saudi Arabia cannot afford a workforce model that prioritises volume over value. This new classification enforces a standard where credentials, experience, and capability become the key differentiators for entry and continuation in the labour market.
What This Means for Businesses in Saudi Arabia:
The implications of this decision are far-reaching for employers across Saudi Arabia. First and foremost, it signals a shift from transactional workforce planning to a more structured, regulated, and capability-driven approach. Businesses must now take immediate steps to re-evaluate their expatriate talent pool, ensuring that existing and future hires are aligned with the required skill level for the roles they occupy.
It also places a renewed emphasis on workforce documentation. Employers must maintain accurate and auditable records of educational credentials, wage structures, and experience benchmarks to support work permit applications. Those who fail to align may face delays, rejections, or even fines, while those who get ahead of the curve will benefit from smoother approvals and stronger workforce credibility.
Strategically, the reform provides businesses with a reason and a framework to rethink their talent strategy. It encourages investment in training and capability-building, both for expatriate and Saudi staff. It pushes firms to focus on value creation over cost arbitrage. And it creates a level playing field for those competing to attract top-tier talent in sectors such as technology, finance, energy, logistics, and professional services.
