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Overseas Health Insurance News: Limit enforced on Saudi Arabian companies employing expats

Saudi Arabian firms are to have a limit on the number of expatriates they employ under tough new labour laws.

Coming into force this week, the regulations mean that any company exceeding the allowed number will be given a fine.

The labour ministry has taken the step in order for more Saudi nationals to be in work and businesses must have more locals than foreigners in order to avoid a financial penalty.

Each extra foreign worker above the quota will cost the company 2,400 riyals (around £400) a year in fines.

Saudi Arabia has always proved to be a popular destination among expats who benefit from not having to pay tax on their wages.

While a third of the people who live in the country are foreigners this demographic is over-represented within the workplace.

Within the private sector it is thought that as many as nine out of ten workers come from outside of the country.

A spokesman for the labour ministry said: "The aim of this decision is to increase the competitive advantage of local workers by reducing the gap between the cost of expatriate labour and local labour."

Despite this, a number of non-Saudi groups will be exempt from the rules, including those of United Arab Emirates, Qatar, Kuwait and Bahrain origin as these countries fall into the Gulf Co-operation Council (GCC) category.

There is already a quota system in place in Saudi Arabia which means that private companies must employ a minimum number of local workers.

Those who do not comply with these requirements are now finding it hard to get visas to bring foreign workers into the country.

According to the labour ministry this approach has already created 400,000 jobs for Saudi nationals.

It could also mean that other countries within the GCC also follow the example set by Saudi Arabia and therefore make it more difficult for Brits to move to the Middle East.

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