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Saudi ‘Green Card’ to Boost Non-Oil Economy, Reduce Remittances

BE2C2 Report – Saudi businessmen and expatriates are excited  over the Shoura Council’s decision Wednesday to approve draft Privileged iqama (residency permit) Law, similar to the U.S. green Card, providing foreign entrepreneurs, investors and high skilled professionals special privileges.

The highlights of the draft law are unlike the existing iqama system, such residents would not require a Saudi sponsor or employer. Such individuals also will have unrestricted movement (exit/re-entry) and designated queues at airports.

As per the proposed law, a holder of such an iqama will also have privileges that millions of expatriates in the kingdom do not enjoy. These privileges include family status, visit visa for immediate family members and relatives, provision to recruit domestic workers, own properties and such vehicles which expatriates cannot own.

Saudi projects pie of the economy is expected to be one of the largest beneficiaries of the ‘Green Card’ initiative

The new ‘privileged’ iqama law will seek to provide “qualified” foreigners residency without the need for a Saudi sponsor; Eligible expatriates must have a valid passport with a credit report, adequate financial resources, a health report and no criminal record.

Crown Prince Mohammed bin Salman had revealed in 2016 that the kingdom plans to introduce a United States-style green card system to help the kingdom reduce remittances and also get rid of its sponsorship system.

The Kingdom is home to more than 10 million foreign workers who in 2017 sent almost $38 billion to their home countries- KSA is at second place (after USA) in remittances outflow worldwide.

In an interview with Bloomberg, when asked what “non-oil revenue measures” the kingdom will likely undertake to diversify the economy, he said: “We are working on a specific program similar to the green card.”

The green card system in the US authorizes people to live and work in the country on a permanent basis. The employment status of a green card holder has no effect on their ability to live in the US.

Former Editor-in-Chief and Middle East media icon Khaled Almaeena said the Green card system will automatically cut the black market in Sponsorship system which has been exploited a lot. “I had earlier written it was a form of slavery. Green card system will enhance revenue as there will be a proper channel of money flowing into government coffers. It will regulate business too and help Saudi startups and SME’s”, he added.

Chairman of the Federation of Labor Committees Nidal Ridwan said the new system would help Saudi Arabia get rid of the sponsorship system, according to the Saudi Gazette.

“You know the Green Card holders enjoy all the rights US citizens enjoy except the right to nomination, election and joining the armed forces. I believe the same thing will happen in Saudi Arabia once the new system is implemented,” Ridwan said.

Economic analyst Ahmed Al-Khateeb told Albilad Rnglish Daily: “It will give an opportunity for expats having good revenue to invest in the kingdom’s businesses and real estate.

Risk and Forecast: 2017-2018

Saleh Al-Humaidan, former Managing Director of Al-Youm Group of Publication and prominent business analyst,  welcomed the move saying that it will not only attract foreign investors and entrepreneurs but also enhance image of the Kingdom in the business world. He said this move will also install confidence among expatriates who in some cases suffer from a sense of uncertainty.

The draft law aims at not only attracting entrepreneurs, investors and high skilled professionals but will also pave way for cultural interaction.

Saeed Al-Ghamdi, a prominent businessman welcoming the move said that this landmark decision will help expatriates in assimilating in Saudi society. “ Let’s accept the reality that expatriate workers perpetually consider themselves aliens and this does affect their productivity as well as commitment. The new law will give them a sense of belonging and commitment, he said.

The law envisages that expatriates will have to make payment of a special fee determined by the Executive Regulations and that a center called the Center for Privileged Iqama will be established for the purpose.

There will be two types of Iqamas – one for an unlimited period and the other for one-year validity with subject to renewal.

Ali Abdul Aziz Kanoo, managing director of Kanoo Group of Companies said it was a “great move in right direction.”. The new system will not only attract business and highly trained professionals but will also increase revenue yield., he said. The feature of the proposed law touch some very sensitive needs of expatriates, especially the freedom of movement.

The requirements for the new type of Iqama include a valid passport, enough financial resources as defined by the specially created authority for the privilege Iqamas, sound health report and certificate of no criminal record.

The expatriates in general were bit confused on the proposed law. ““It is still not clear what will make an expatriate  eligible for new and privileged status,” said Naseem Ahmad, Manager of an IT company in Al-Khobar who hails from Karachi, Pakistan.

MA. Kutty, an Indian from the state of Kerala, and a business executive in a contraction company in Dammam, welcomed the move saying it reflects the ongoing liberalization under the leadership of Crown Prince Mohammad Bin Salman. Kutty who is in the Kingdom for the past 34 years. He said he will be among the first applicants to the new status. He hoped the country will soon end the “age old irrelevant” sponsorship system as well as exit and re-entry requirement for travel.

(BE2C2   Report is a data journalism initiative of Irshad Salim Associates, a New Jersey, USA, based consulting firm in association with BE2C2 in PakistanFacebookTwitterEmailWhatsAppLinkedInPrint

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