The Kingdom of Saudi Arabia stands today at a crossroads of transformation. Vision 2030 sweeps through its government offices, shopping centers, gleaming tech parks, and everywhere businesses set their mark. Perhaps you’re eager to reach the Saudi market or support a client expanding across the Gulf. The opportunity is clear, but the path forward? That can get complicated.
In this article, we’ll walk through the experience of expanding a team into Saudi Arabia using employer of record approaches. Along the way, I’ll share practical advice, compliance watch-outs, and practical tips, drawing from the real insights of EWS Limited and the lived journeys of companies who’ve made this leap – sometimes stumbling, sometimes sprinting – toward growth.
This isn’t just theory. It’s strategy, mixed with a bit of realism, shaped by the pressures and dreams of Series B and C startups, global HR leaders, and organizations who can’t afford missteps with their workforce or regulatory obligations. The intent? Give you a route map you can actually use.
Let’s start simple. An employer of record (EOR) lets a business hire employees in Saudi Arabia without having to set up a legal entity in the country. If you’re in London, Düsseldorf, or Singapore and you want to hire top Saudi talent, an EOR can be the difference between months of red tape and weeks to operational readiness.
The EOR model is not a recruitment agency, nor is it a basic payroll provider. It is much broader, especially in a country with a layered regulatory system.
The Saudi legal and cultural contextMaybe you’ve heard horror stories of employment gone wrong: contracts considered void, stalled visas, or fines for violating Saudization quotas. Labor compliance is not optional in the Kingdom, and penalties for error are stiff. Contracts must be set up under the Saudi Ministry of Human Resources & Social Development. Local employment law shapes working hours, overtime, paid time off, termination notice, and benefit entitlements.
For instance, paid annual leave starts at 21 days, but grows to 30 after five years. Overtime is mandatory above 48 hours per week, and payments come with a clear legal formula. There are also national holidays unique to the Saudi calendar.
The Nitaqat Saudization program brings an extra layer. It requires private companies to employ a certain quota of Saudi citizens, with rules varying by sector, company size, and region. Some jobs are fully reserved for Saudis.
“Local content is not just good practice. It is the law.”
If your company operates under an EOR model, the provider must stay ahead of quota changes and report compliance each month.
Every foreign employee in Saudi Arabia needs a work visa (often called an iqama). The process is multi-step, involving entry authorization, medical checks, and online registrations. Any delay or form error can cost weeks of lost productivity.
EWS Limited, for example, specializes in making sure every document, governmental interaction, and renewal is done right so your new hire can actually work… not just wait on paperwork.
Why do global companies use EOR solutions in Saudi Arabia?You might be asking why not hire directly or set up a subsidiary. There are a few scenarios where an EOR makes sense:
In some cases, companies are asked by their own global clients to use a legal employment solution to provide assurance in contracts. EWS Limited’s single-point-of-contact model is built for these situations, making the EOR provider your local HR agent, risk shield, and guide.
I want to tell you, this isn’t a copy-paste proposition. While each company’s path will be a bit different, here is a broad step-by-step process as seen by many EWS clients:
Some steps seem simple on paper, but on the ground? Small missteps create big headaches. That’s why using an experienced provider like EWS Limited changes the equation.
Running payroll in Saudi Arabia isn’t just about sending riyals each month. With multi-currency teams, currency loss and bank delays can sap morale and trust.
“Timely, accurate payroll builds confidence from day one.”
EWS Limited offers multi-currency payroll outsourcing, making sure remote staff, local hires, and contractors are paid precisely. That means less explaining, more building.
Income tax for employees in Saudi Arabia does not exist, but end-of-service awards (a mandatory severance) and social insurance (GOSI) are in play. Both local and expatriate staff have specific GOSI contributions for pensions, workplace injuries, and other benefits. If the EOR misses these filings, your employee can lose future entitlements or trigger a compliance inquiry.
Medical coverage is mandatory for all private sector employees. That’s not up for discussion, it’s a government requirement. EOR providers negotiate group plans and walk the maze of document gathering.
Nuances of hiring in Saudi Arabia: things global employers learn the hard wayIt’s tempting to think you can do things “just like in the UK”, or “like we always do in Singapore.” But Saudi Arabia is, frankly, different. Culture matters. Labor policies shift. Social rules shape expectations.
“No detail in Saudi payroll and HR is too small.”
Few companies stop at one market. If regional expansion is your goal, EWS Limited’s reach across the Gulf is a game changer. Here is how you can work with local teams in nearby countries:
Creating consistency in employee experience and compliance, no matter where your people sit, is a real advantage.
Sometimes, a company reaches a decision point. Should you keep using an EOR for your Saudi team, or set up your own subsidiary?
EWS Limited’s own clients have found that the right answer isn’t always crystal clear, but here are some common triggers to move from EOR to full entity:
Up to that point, an EOR offers you flexibility and freedom from many day-to-day burdens.
Risks of the DIY approach in Saudi hiringI have to pause here and say – companies sometimes try to “go direct” using local partners or informal solutions. These shortcuts bring big risks:
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