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All Businesses in Saudi Arabia Now Obliged to Employ Saudi Nationals

Client Alert | 1 min read | 03.12.13

The Saudi Arabian Ministry of Labor's Nitaqat program obliges businesses in Saudi Arabia to ensure that a certain percentage of their workforce is comprised of Saudi nationals (the Saudization Obligation) and ranks businesses on the basis of the businesses' compliance with the Saudization Obligation.

Under the Nitaqat program, the specific percentage (or range of percentages) of a business’s workforce that must be comprised of Saudi nationals is determined by reference to (a) the business activity that the business undertakes and (b) the total size of the business’s workforce. Since the implementation of the Nitaqat program in 2011, businesses with fewer than 10 employees have been exempt from the application of the Nitaqat program, so that businesses with fewer than 10 employees could in principle have no Saudi employees at all. However, this exemption will expire as of 30 March 2013, at which time every business in Saudi Arabia regardless of its area of business or number of employees, will become subject to the Nitaqat program and will be required to employ at least one Saudi national.

Depending on the extent of a business's compliance with its Saudization Obligation, the Ministry of Labor will rank a business as red (non-compliant), yellow (poor compliance), green (compliant), or premium (more than compliant). Businesses that are classified as red or yellow are subject to penalties, while businesses that are classified as green or premium are awarded incentives.

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Client Alert | 4 min read | 08.13.26

Supreme Court Confirms Contractual Loss of Bargain Without Repudiatory Breach

English law has long treated the choice between terminating for repudiatory breach and exercising a contractual termination right as consequential. Under the Financings[1] causation principle, a party exercising a contractual right for a non-repudiatory breach could recover losses accrued to the date of termination — but nothing more. Loss of bargain was out of reach unless the breach went to the root of the contract. A practical workaround, confirmed in Lombard,[2] was to designate the relevant obligation as a condition, elevating any breach to repudiatory status, but that device carries significant strategic risk if the termination is later found to have been wrongful....

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