Beginning July 1, 2017, Saudi Arabia implemented a new monthly fee on sponsoring foreign
nationals. This levy pertains to both employees and their dependents, and will be gradually increased each year through 2020.
WHAT IS THE PURPOSE OF THE FEE?
Saudi Arabia is seeking to boost their revenues during the period of declining oil prices. These fees were implemented to create additional revenue for the government, but will also increase the cost of doing business in the kingdom.
WHO DOES THE FEE EFFECT?
The 2017 National Budget of the Kingdom of Saudi Arabia introduced increased visa fees for foreign nationals. The budget also added new fees payable by foreign nationals who sponsor dependents that reside in Saudi Arabia. Dependents are defined as spouses, dependent children, parents, house maids and domestic workers.i These fees were introduced in January 2017, with implementation beginning July 1, 2017. The fees are set to increase yearly until 2020. Prior to 2017, expatriates living in Saudi Arabia did not have to pay any fee for dependents.
HOW ARE THE FEES PAID?
Under Saudi employment regulations, employers will continue to be liable for payment of all fees associated with the employee’s work and residency authorizations. However, the Saudi government has not specified whether the dependent fee is to be paid by the employer or the employee, making the decision of who bears the cost of the levy the employer’s choice.