What Is the Kafala System — and How Has It Changed

What Is the Kafala System — and How Has It Changed

The traditional Kafala (sponsorship) system tied a foreign worker's residency entirely to one employer. Since 2021, Saudi Arabia introduced major reforms through Qiwa that significantly loosened this link.

The previous situation

Previously, a foreign employee couldn't move between employers freely, and exit/re-entry required the sponsor's direct approval.

Key reforms since 2021

• Job mobility: an employee can move to a new employer immediately after their fixed-term contract ends, directly through Qiwa, without the previous employer's consent

• Exit/re-entry: a worker can leave and return to the country without the sponsor's approval for each trip

What remains the same

An authenticated Qiwa contract is still the legal basis of the employment relationship, and Iqama status is still tied to a sponsoring employer.

Why this distinction matters for employers

Employers can no longer rely on Iqama status alone to prevent employee turnover; the employee holds the legal right to transfer once their contract ends. This raises the importance of retention.

What employers should do now

• Build a genuine retention culture rather than relying on Iqama restrictions alone

• Note that employees under 12 months of service face additional conditions to transfer

How Inclusive Solutions helps

We help you build a workforce strategy aligned with the new labor market realities. Talk to our team.