Author
Sebastian Luermann
Attorney at Law (Germany) I Legal Consultant (UAE) I Senior Associate
October 2026 – Saudi Arabia – Compliance
The Saudi Ministry of Human Resources and Social Development (HRSD), together with the Ministry of Municipalities and Housing, decided in August 2026 to raise the Saudization rate for project management professions in the private sector to 70 per cent. The requirement applies from 14 February 2027; until then, companies have a six-month grace period to adjust their workforce.
The rule affects private-sector establishments that employ three or more people in the targeted project management professions. Companies that fail to meet the quota after the grace period may face regulatory penalties and restrictions.
This article summarises what the requirement provides, which professions are covered, how the quota is calculated and what steps companies should take now.
The Requirement at a Glance
The key points at a glance:
| Item | Detail |
|---|---|
| Responsible bodies | HRSD in partnership with the Ministry of Municipalities and Housing |
| Required rate | 70 per cent Saudi nationals in the targeted professions |
| Scope | Private-sector establishments with 3 or more employees in the targeted professions |
| Decision | 13 August 2026 |
| Grace period | 6 months |
| Implementation begins | 14 February 2027 |
Which Professions Are Covered?
The regulation covers three project management job titles:
- Project Management Manager (مدير إدارة مشاريع)
- Project Management Engineer (مهندس إدارة مشاريع)
- Project Management Specialist (أخصائي إدارة مشاريع)
What matters is the registered professional classification of the employees. Companies should therefore check how their staff are currently classified in the government systems.
How the Quota Is Calculated
The percentage is calculated on the total number of employees working in the targeted project management professions. An example from the Ministry’s guide: if a company has five employees in the targeted professions, 70 per cent equals 3.5, which is rounded up to four Saudi employees.
The example shows that a value of 3.5 is rounded up. How fractions below 0.5 are treated should be checked against the guide before workforce planning is finalised.
Note: As at 29 September 2026, roughly four and a half months remain until 14 February 2027. Recruiting and onboarding Saudi professionals in project management takes lead time.
Context: Part of a Wider Localisation Drive
The requirement follows a series of Saudization measures by the Ministry. HRSD has already introduced a 70 per cent rate for procurement professions and has begun implementing it. Companies operating in Saudi Arabia should therefore expect further professions to follow.
Possible Consequences of Non-Compliance
After the grace period, non-compliance may result in regulatory penalties and restrictions. The specific measures follow from the Ministry’s guide and the general rules of the Saudization system. Companies should therefore review the requirements early rather than reacting on the deadline.
What Companies Should Do Now
- Review employees and classifications. Identify which employees are currently registered in the three targeted professions. The registered professional classification is what counts.
- Calculate the threshold and your needs. Determine whether you fall within the rule with three or more employees in the targeted professions, and how many Saudi employees the 70 per cent rate requires.
- Finish workforce planning before 14 February 2027. Plan recruitment, replacement and onboarding so that the quota is met when implementation begins.
- Keep classifications accurate. Make sure the job titles registered in the government systems match what your employees actually do.
- Assess the impact on projects and contracts. Check how changes to project teams affect ongoing projects, client contracts and subcontractors.
- Arrange a legal review. Have your workforce and the measures required reviewed legally before the grace period ends.
Frequently Asked Questions
Does the requirement also apply to foreign companies with a branch in Saudi Arabia?
The requirement is aimed at private-sector establishments in Saudi Arabia. Whether and how it covers a foreign company with a local branch or subsidiary depends on how its employees are registered and classified in the individual case.
What applies with fewer than three employees in the targeted professions?
Based on the information available, the requirement applies to establishments with at least three employees in the targeted professions, so it would not apply below that number. Hiring can push you over the threshold, so the position should be kept under review.
When does implementation begin?
The decision was announced in August 2026. After a six-month grace period, implementation begins on 14 February 2027.
Does the quota apply to all project management staff in a company?
No. Only employees in the three named job titles are covered. The registered professional classification is what counts.
How TME Legal Can Help
TME Legal advises companies doing business in Saudi Arabia on employment-law compliance in connection with Saudization. Our services in this area include:
- Reviewing the current workforce and registered professional classifications
- Calculating the number of Saudi employees required
- Advising on workforce planning within the grace period
- Adapting employment contracts and job profiles
- Supporting your dealings with the competent authorities
If you would like to have the impact of the new requirement on your company reviewed, we would be glad to help.
This article is for general information only and does not constitute legal advice. It is based on public reports as at September 2026; HRSD’s requirements and implementation practice continue to evolve. Please contact TME Legal for advice tailored to your individual situation.
