The Saudi labor market has recently witnessed a series of regulatory decisions aimed at enhancing the participation of national talent across various sectors. Within this context, the decision on the Localization of Procurement Jobs in Saudi Arabia represents a new step toward restructuring administrative roles in the private sector and improving their efficiency. The procurement sector is considered one of the vital sectors that play a central role in business sustainability and cost efficiency within organizations.
In this article, we review the details of the decision on the Localization of Procurement Jobs in Saudi Arabia, the approved localization percentage, the objectives of the decision, as well as its most significant expected impacts on companies and the Saudi labor market.
What Is the Decision on the Localization of Procurement Jobs in Saudi Arabia?
The decision on the Localization of Procurement Jobs in Saudi Arabia refers to obligating private sector establishments to increase the percentage of Saudi nationals employed in procurement positions to 70%. This decision falls within the framework of the Decisions of the Saudi Ministry of Human Resources, which aim to regulate the labor market and increase national workforce participation in administrative and specialized roles.
The decision targets companies employing three or more workers and is implemented according to specific mechanisms and controls designed to achieve the objectives of localization and support labor market stability.
Does the Decision Apply to All Private Sector Companies?
The decision does not apply to all private sector companies without exception. Rather, it falls within the scope of the Localization Program, which targets private sector establishments employing three or more workers, in accordance with regulations set by the competent authorities.
This approach aligns with the objectives of Localization in Saudi Arabia 2025, which seek to expand the scope of Saudization in administrative and specialized positions while taking into account company size and business activity. This ensures gradual and balanced implementation without negatively affecting business continuity.
When Does the Localization of Procurement Jobs in Saudi Arabia Take Effect?
Yes, there is a specific date for the implementation of the Localization of Procurement Jobs in Saudi Arabia. The Saudi Ministry of Human Resources issued the decision to raise the localization rate in procurement jobs to 70% on November 30, 2025.
Establishments were granted a six-month grace period from the date of issuance to prepare before the actual enforcement of the decision. Accordingly, implementation began gradually after the end of this period, allowing companies sufficient time to prepare and comply with the new requirements.
Which Positions Are Covered by the Localization of Procurement Jobs in Saudi Arabia?
The Localization of Procurement Jobs in Saudi Arabia covers a range of administrative and specialized positions related to managing purchasing and supply operations within private sector establishments. These roles fall under job titles approved by the Ministry of Human Resources and include, for example: Procurement Specialist, Procurement Officer, Procurement Supervisor, and Procurement Manager.
The scope also includes roles related to procurement planning, supplier management, contract follow-up, and supply coordination.
Including these positions aligns with the objectives of Localization in Saudi Arabia 2025, which aim to extend localization to roles with added value and a direct impact on decision-making within organizations, rather than limiting it to operational jobs. The decision also seeks to empower Saudi talent to gain experience in procurement and supply chain management, enhancing spending efficiency and corporate governance.
Are There Penalties for Non-Compliance with the Localization Decision?
Yes, failure to comply with localization requirements may expose private sector establishments to a range of penalties and regulatory measures designed to ensure effective implementation.
These penalties typically include financial fines imposed on non-compliant entities, as well as classification under categories that negatively affect their regulatory standing. Non-compliance may also result in restrictions on certain Ministry of Human Resources services, such as issuing or renewing work permits or benefiting from government support programs.
In some cases, establishments may be granted a corrective grace period to adjust their status before penalties are fully enforced, providing an opportunity to comply with the localization requirements.
Does the Government Provide Support to Companies to Implement Localization?
Yes, the government offers a range of support programs to help private sector establishments comply with the requirements of the Localization Program, in line with the objectives of Localization in Saudi Arabia 2025, which aim to balance increased employment rates with business sustainability.
This support includes training and qualification programs for Saudi talent, as well as wage support through relevant authorities, helping to reduce the financial burden on companies during the implementation phase.
These initiatives aim to enable companies to attract qualified Saudi professionals, enhance workforce readiness, ensure business continuity, and achieve compliance with regulatory decisions, ultimately contributing to labor market stability and long-term localization objectives.
How Can HFA Support Companies in Saudi Arabia Amid Changing Labor Market Requirements?
With new decisions impacting the business environment in Saudi Arabia, companies need to establish and organize their operations correctly from the outset. In this context, HFA provides company formation services for non-residents and supports the establishment of new branches within the Kingdom, helping businesses operate within a clear regulatory framework.
HFA’s services also include tax filings and compliance follow-up, which are essential for business continuity under current regulations. Additionally, the firm offers free consultations to help business owners understand regulatory requirements and make informed decisions before entering or expanding in the Saudi market.
Frequently Asked Questions
Does the Localization of Procurement Jobs in Saudi Arabia affect newly established companies?
The decision may affect new companies at the start of operations, as they are expected to comply with approved localization ratios once their organizational structure is completed.
Is localization applied differently to local and foreign companies?
In principle, it is not applied differently. All private sector companies are subject to the same regulations based on their size and activity.
Can localization be implemented gradually within a company?
Yes, localization is often applied in phases according to guidelines set by the competent authorities, allowing companies time to adjust.
Does the decision apply to companies operating outside Saudi Arabia that have a branch inside the Kingdom?
Yes, any registered branch within Saudi Arabia is subject to local regulations, including applicable localization decisions.
Does localization affect the structure of administrative departments within companies?
The decision may require restructuring certain administrative departments, particularly those roles covered by localization.
Are there exceptions for certain activities or sectors?
Exceptions or different localization ratios may be granted for specific activities as determined by the Ministry of Human Resources.
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