Authorities determine the end date for exempting small businesses from financial fees

The digital platform “Qiwa,” the technology arm of the Ministry of Human Resources and Social Development in Saudi Arabia, issued key clarifications regarding the future of the exemption from work permit fees for micro and small enterprises. This clarification sets a timeframe for benefiting from this government support, requiring business owners to reassess their financial plans for the coming period.

Exemption deadline and calculation mechanism

According to data released by the platform, the exemption from fees for establishments with nine or fewer employees (provided the owner is fully dedicated to the business) will no longer be valid after 14 Sha'ban 1448 AH (corresponding to January 21, 2027) . The platform confirmed that any period of time in a work permit extending beyond this date will be subject to the legally prescribed fees and will not be covered by the exemption.

In detailing the calculation mechanism, Qiwa explained that the system will calculate fees daily for periods outside the exemption period. For example, if an employer renews a work permit for an employee, and the new permit expiry date falls after January 21, 2027, the employer will be exempt from fees only for the period preceding that date, while they will be required to pay the fees for the days or months following that date.

An illustrative example of expected fees

To illustrate this for business owners, the platform offered a practical example: If an employee's work permit expired on the 14th of Ramadan, 1447 AH, and the employer wished to renew it for a full year, 11 months of the permit would fall within the exemption period, while one month would fall outside of it. Therefore, the business owner would pay the permit renewal fee (100 riyals) in addition to the fee for the non-exempt month (approximately 800 riyals), bringing the total to around 900 riyals.

Conditions for benefiting from the current exemption

This exemption is part of a package of incentives to support small businesses, but it is subject to strict controls to ensure that the support reaches those who deserve it among full-time entrepreneurs. The beneficiary categories include:

• Exemption for two expatriates: if the owner is full-time for work, and the total number of employees (including the owner) is 9 individuals or less.
• Exemption for 4 expatriates: If the owner is available, with the employment of at least one Saudi citizen (other than the owner) registered in social insurance, and provided that the total number of employees does not exceed 9 individuals.

Important restrictions and exceptions

The "Qawa" platform emphasized that there are cases to which the exemption does not apply, in order to ensure organizational fairness. Among the most prominent of these cases are:

• Multiple establishments: An establishment does not benefit from the exemption if its owner has other establishments with different unified numbers, or is a partner in other commercial entities, as in this case he is considered not fully dedicated.
• Multi-partner companies: The exemption is limited to establishments owned by only one person; establishments owned by more than one partner are not covered by the decision.
• Transfer of Saudi Employees: The platform has established a time limit to prevent the misuse of a Saudi employee's services at more than one establishment to obtain the exemption (Category 4 workers). A newly transferred employee cannot benefit from the exemption if they were previously registered with another establishment that received support, until a full year has passed since the date of the last exemption calculated in their name.

This regulation comes within the framework of the efforts of the concerned authorities to regulate the labor market and direct support to genuine small establishments run by their owners, which enhances the sustainability of these projects and their contribution to the national economy.