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The Government is to exempt small businesses from 2400 riyals fee

Tuesday 22 April 2014

​A Government Committee recommended exempting microenterprises with employment of four or less to pay the fees for work permits for expats of two thousand and four hundred riyals annually and only to pay the license fee of one hundred riyals annually. The resolution is expected to be issued in the near future. The Council of Ministers Decree No. 353 of 25/12/1432 AH was issued to collect financial compensation when issuing or the renewal of a work permit for expats from all private sector enterprises of two thousand and four hundred riyals annually. It is for the benefit of the Human Resources Development Fund for migrant workers that exceed the average number of national employment in these enterprises. In his turn, Eng. Mansour Bin Abdullah Al-Shatri, Member of the Board of Directors of the Riyadh Chamber and Chairman of the Board of Trustees of the Riyadh Centre for the Development of Small and Medium-Sized Businesses, explained to the "Riyadh" that no formal decision had been issued so far and the Chambers of Commerce was not notified yet. He stressed that they at the Riyadh Chamber had already called to support the microenterprises with employment of nine or less since they are through the self employed owners are one of the means of operation of new entrants to the labor market and reduce unemployment. Engineer Al-Shatri said on this matter that if the resolution is to be passed formally more than eight hundred and twenty thousand microenterprises will benefit, and these constitute 68% of private sector enterprises in Saudi Arabia. He said that these enterprises have nearly two million and four hundred thousand migrant workers that would be exempted from paying fees for the work permit for employment. This would increase their profit margin and growth, especially if the Labor Department requires only that the owner is of a full-time management without requiring him the employment of Saudis. He said that small businesses have a major role in the economic development, job creation, and poverty reduction. Its impact is distributed between cities and villages, male and female, young and old, the educated and the uneducated, and the poor and the middle income. He pointed out that these enterprises have become means of growth in the economies of most countries of the world, which requires the support of such enterprises in Saudi Arabia, especially given that the Saudi economy is dominated by microenterprises dramatically. Al-Shatri confirmed that the Ministry of Labor had previously awarded the owners of microenterprises facilities and special exceptions during the corrective deadline for expatriate workers last year, allowing them to use the services of four workers without requiring the employment of any Saudis provided that the owner of the establishment is of a full-time management.