5 reasons to relocate to Saudi Arabia
Saudi Arabia has many advantages for potential expats considering a relocation. The new drive to diversify the Saudi economy and take the focus away from oil has created many new opportunities for expats. Besides the career benefits of working abroad, the country is well known for the friendliness and welcoming nature of its people. With year-round sunshine, Saudi Arabia is as diverse in its landscapes as it is in its culture and traditions; from desert fortresses and mountain ranges to magnificent fish and coral reefs. The cost of living is relatively low and it is not unusual for expats to hire drivers and gardeners – and with new shopping malls opening on a regular basis, the country offers a very modern retail experience, emphasising the many reasons people relocate to Saudi Arabia.
A significant percentage of the nation's inhabitants are immigrants seeking economic opportunity, making up 37% of the total Saudi population. Kingpin has a variety of roles for tax professionals in the Kingdom and here we look at our top 5 reasons to live and work in Saudi Arabia.
Saudi Arabia career opportunities and salary packages
The main reasons expats relocate to Saudi Arabia are career prospects and salary packages. When surveyed, around 49% of professionals consider career opportunities in the capital Riyadh as either ‘excellent’ or ‘good’ and that the basic salary and additional incentives make most professionals extremely satisfied. In the past, remuneration packages were split into various elements: basic salary, car provision or allowance, housing provision or allowance, medical cover, education for children. Today, however, employers tend just to pay a salary which covers these expenses, although in some cases there are performance or other bonuses. In addition to their salary, contract workers are awarded an ‘indemnity’ at the end of the contract. Saudi Arabia legislates that the indemnity is based on the value of the entire remuneration package including performance bonuses (where applicable). The indemnity can be a significant amount of money if you’ve been working in Saudi Arabia for a long time, and many people manage to accumulate a reasonable financial cushion. The indemnity is not insurance but an end-of-contract bonus, required by law to be paid to expatriate workers as a ‘thank-you’ for service to the state. Indemnity scales usually amount to 15 (in some cases 20) days of basic pay per year of employment for the first three years and thereafter a month’s salary per year of employment.
Tax-Free earnings and annual bonus
The Kingdom’s tax system is attractive to expats from across the world adding to the many reasons tax professionals relocate here. Saudi citizens pay no income tax at all, whilst expats pay a very low fee in exchange for services. Although a new tax law has been announced (2018) which asks expats to pay €23.80 per month or 100 Saudi Riyal (SAR), total taxes are effectively negligible. Expats in Saudi certainly pay much less tax compared to their own countries; in many countries, you can expect to pay taxes worth up to 40-50%. This also makes savings easier, which together with indemnities, means many expats return home with a nice lump sum. Another factor is the annual bonus. While other countries give a small percentage of the monthly salary as the annual bonus to the employees (some even don’t do that), in Saudi Arabia, even expats get a bonus equivalent to two-three months of their salary. Bank workers can get several months’ salary as a bonus when the fiscal year ends, whilst top performers can get a ‘double bonus’ as a token of appreciation and encouragement. Nurses and other health professionals get an annual bonus of a month’s salary.
Airline tickets to Saudi Arabia
As with many countries in the Middle East, Saudi Arabia has been considered a hardship destination. While this is no longer the case in countries like the UAE, there is still some leverage for expats moving to Saudi Arabia to negotiate this into their contracts. High earning potential must be weighed against lifestyle, cultural barriers and opportunities for one’s spouse and children. This is another significant reason for others from different parts of the world to move to Saudi Arabia. Companies are expected by law to offer expat employees free tickets to and from Saudi Arabia every year. The expat employees who have completed one year of service in Saudi and are renewing their contracts for at least 12 months are designated to get the annual round ticket from the employers.
Transportation and housing allowances
Unlike other countries, where only a handful of companies offer transportation and housing allowances to its expats, all companies in Saudi Arabia are known for their amazing housing and transportation allowances. Western expats working in Saudi Arabia can easily ask for these benefits if they are not included in the job offer. Housing benefits are 25% or more of the basic salary or a physical home. Labour laws also entitle every expat to a transport allowance of 8%-10% of the basic salary. Of course, it’s also possible that many companies will provide an all-expenses-paid car.
Large selection of international schools
International schools in Saudi Arabia offer various types of curriculums, such as the International Baccalaureate, the UK national curriculum, a US-style model or the International Primary Curriculum. Given the number of expats required to fill the country’s workforce – especially in the oil sector – the private international school sector is quite sizeable adding to reasons for relocating here. Campuses are concentrated in the capital Riyadh and the coastal cities of Jeddah and Al Khobar. In addition to the many schools following British, American and international curriculums, there are German, Italian, Pakistani and Filipino foundations, serving the children of nationals working in Saudi Arabia. A total of eight schools are accredited by the Council of International Schools, while the Council of British International Schools has two members. There are 18 IB World Schools that offer the International Baccalaureate Diploma, 12 of which offer the Diploma Programme.
To find out more about international schools in KSA, see the Kingpin Guide.
If you are interested in a move to Saudi Arabia or anywhere else in the world and would like to speak to Kingpin International about International Tax Opportunities, across Direct Tax, Transfer Pricing or Indirect Tax please contact a member of the team. Alternatively, view our current International Tax vacancies.