Saudi Ministry of HR Increases Saudization in Engineering and Procurement for 2026: A Compliance Guide by Motaded Ltd

Ministry of HR Increases Saudization

Saudi Ministry of HR Increases Saudization in Engineering and Procurement for 2026: A Compliance Guide by Motaded Ltd

Ministry of HR Increases Saudization

 

In pursuit of the ambitious goals of Saudi Vision 2030 to empower national talent, the Ministry of Human Resources and Social Development (HRSD) has issued landmark decrees to increase Saudization (localization) in two vital sectors: Engineering Professions and Procurement Professions. As a strategic partner for investors in the Kingdom, Motaded Ltd provides this comprehensive news analysis and procedural guide to ensure your business remains compliant with these new regulatory updates.

I. Raising Engineering Saudization to 30% and Increasing the Minimum Wage

The engineering sector is the backbone of the Kingdom’s construction and industrial renaissance. To ensure the active participation of Saudi engineers, the first decree introduced decisive measures affecting the core operational workflows of enterprises.

1. Details of the Engineering Decree and Timeline

  • Target Saudization Rate: The rate has been raised to 30% of the total engineering workforce within a firm.

  • Minimum Wage: To be counted toward the Saudization percentage, a Saudi engineer’s salary registered in GOSI must not be less than SAR 8,000.

  • Implementation Date: The decree officially takes effect on December 31, 2025, making 2026 the year of full compliance.

  • Target Entities: This applies to all private and non-profit organizations employing five or more engineers in the targeted roles.

2. Targeted Engineering Professions (46 Specialized Roles)

The decree covers a wide spectrum of disciplines that intersect with infrastructure, mining (where Motaded Ltd operates alongside Slow Shan Ltd), and manufacturing. Key roles include:

  • Architectural and Civil Engineering: Architect, Civil Engineer, Urban Planner.

  • Power and Mechanical Engineering: Power Generation Engineer, Mechanical Engineer, HVAC Engineer.

  • Electronic and Technical Engineering: Electronics Engineer, Telecommunications Engineer, Computer Engineer.

  • Specialized Engineering: Marine Engineer, Vehicle Engineer, Sanitary Engineer, and Chemical Engineer.

  • Important Note: The decree mandates that all engineers (Saudi and expatriate) must obtain Professional Accreditation from the Saudi Council of Engineers (SCE).

II. 70% Saudization in Procurement: A Revolution in Supply Chains

The second decree aims to redefine the procurement and logistics sector, a field that global and local giants rely on to manage their financial and commodity flows.

1. Objectives and Target Ratios

  • Saudization Rate: Increased to 70%, reflecting the abundance of qualified national talent in this field.

  • Effective Date: The decree enters into force on November 30, 2025.

  • Target Entities: Firms employing three or more workers in the specified procurement professions.

2. Targeted Professions in Procurement and Logistics

Twelve core professions have been identified within the Unified Saudi Classification of Occupations:

  1. Purchasing Manager (Procurement Manager).

  2. Purchasing Representative (Procurement Delegate).

  3. Contracts Manager.

  4. Tenders Specialist.

  5. Procurement Specialist.

  6. Logistics Services Manager.

  7. Warehouse Manager and Storekeeper.

  8. E-commerce Specialist.

  9. Market Research Specialist.

  10. Private Brand Supply Specialist.

III. Motaded Ltd’s Strategic Analysis: Impact on the Business Sector

As specialists in commercial business setup in KSA, we at Motaded Ltd believe these decisions are not just numbers; they reflect the maturity of the Saudi labor market.

Value Added by Investing in National Talent

  • Operational Sustainability: Reducing reliance on external recruitment minimizes the risks associated with global human supply chain fluctuations.

  • Leveraging "HADAF": Compliant firms will receive priority access to localization support programs provided by the Human Resources Development Fund (HRDF).

  • Improved Work Quality: National talent in leadership roles, such as "Procurement Manager," enhances understanding of the local market and improves negotiation leverage with local suppliers.

Challenges and Mitigation Strategies for Investors

Motaded Ltd recognizes that raising the minimum wage to SAR 8,000 for engineers may pose a sudden financial burden. We recommend the following:

  • Benefits Restructuring: Integrating allowances into the basic salary to ensure the regulatory minimum is met.

  • Early Planning: Immediately starting to attract and train new graduates during the 6-month grace period.

IV. Motaded Ltd’s Procedural Guide for 2026 Compliance

To avoid regulatory penalties, enterprises must follow these steps precisely:

1. Review GOSI Data

Ensure that job titles for all employees perfectly match their actual duties and the Unified Classification of Occupations. Any discrepancy may lead to the employee being excluded from the Saudization count or result in "Fake Saudization" violations.

2. Mandatory Professional Accreditation

Every expatriate engineer in your firm must hold a membership with the Saudi Council of Engineers. Without this accreditation, the firm cannot renew work permits or transfer services. Furthermore, Saudi engineers will not be counted in the percentage unless they are accredited.

3. Integration with "Meza" (MISA)

For foreign investors who have obtained a Saudi Arabia investment license, compliance with Saudization rates is a prerequisite for maintaining the privileges of the "Meza" platform.

V. The Role of the Motaded Digital Platform in Compliance Management

As part of our 2026 vision, the Motaded Digital Platform will play a pivotal role in simplifying these procedures. The platform will provide smart tools for investors, including:

  • Smart Dashboard: To monitor Saudization rates in real-time (Hiring Dashboard).

  • Early Warning System: Alerts you when the firm approaches the "Red Zone" or when professional accreditations need renewal.

  • Integration with ZATCA and GOSI: Ensuring that payroll and tax reports accurately reflect true Saudization rates.

VI. Government Support Packages and Incentives

The Ministry of Human Resources has emphasized that compliant firms will not be left alone; they will benefit from:

  • Wage Subsidies: Programs covering 30-50% of Saudi employees' salaries for a specific period.

  • On-the-Job Training: State contributions to the training costs of new engineers.

  • Procurement Priority: Earning extra points in the government procurement system for firms with high Saudization rates.

VII. Conclusion: The Future of Business Starts with Compliance

The new decrees for engineering and procurement Saudization are a call for all enterprises to elevate their professional standards. At Motaded Ltd, we believe the successful investor turns regulatory challenges into growth opportunities.

If you are looking for specialized consultancy on how to restructure your workforce to align with these decrees, or if you are in the Saudi company incorporation phase and wish to build a compliant team from day one, our team at Motaded Ltd is ready to serve you.

Frequently Asked Questions (FAQ) - Saudization 2026

  • Q: Does the SAR 8,000 minimum apply to existing engineers?

    • A: Yes. To be counted in the 30% ratio, their registered salary must be adjusted to the new minimum before the implementation date.

  • Q: What if I have only two engineers in my firm?

    • A: The engineering decree does not apply to you yet, as it targets firms with five or more engineers.

  • Q: How can I get the full procedural guide?

    • A: You can visit the HRSD website or contact our advisors at Motaded Ltd for an annotated copy.

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