Special Residency to completely cancel sponsorship in Saudi Arabia

Special Residency to completely cancel sponsorship in Saudi Arabia
Special Residency to completely cancel sponsorship in Saudi Arabia

The Saudi Shura Council approved the special residency system for the foreign rich, wealthy, and businessmen to become an alternative to the sponsorship system applied in most of the Gulf Arab countries.

The special residency system wasapproved by the Saudi Shura council on May 8th as Saudi Arabia ismoving to cancel the sponsorship system at a rapid pace.

Benefits of the Program

On Wednesday, the Shura Council approved the draft of special residency system, which aims to grant the resident benefits such as staying with his family, issuing a visit permit to his relatives, bringing in workers, owning property, owning means of transport, and other benefits.

The special residency system, approvedby 76 members of Saudi Shura Council, also benefits the Saudi economy, eliminatesome aspects of commercial concealment, and stimulate business activity,especially as the system requires the financial solvency of the applicant tobenefit from the special residency.

The residency program grants theresident many privileges such as accommodation with family, visiting visas forrelatives, owning property and vehicles, working in private sectorestablishments and moving from one to another, freely leaving and returning toSaudi Arabia, using the corridors for Saudis, and practicing trade.

Saudi Arabia has established a centercalled the special residency center, which is specialized in this kind ofaccommodation.

  • The residency is either for an open period or a renewableyear

Adding to freedom of movement to andfrom Saudi Arabia without the need of the sponsor's consent, the specialresidency system is divided into permanent and temporary accommodations with a fixedfee, which give a number of privileges, including doing business according tospecific regulations.

The special residency system is inline with what the Saudi Crown Prince, Muhammad bin Salman, announced on the GreenCard project during a television interview in 2016, in which he said thatthe Green Card project, to be implemented within the next five years, willenable Arabs and Muslims to live long in Saudi Arabia and create an environmentthat is conductive to establish investments in Saudi Arabia, as part ofVision2030.

The special residency program is one ofthe tools to attract investment, enhance public revenues, and address economicproblems such as commercial concealment and money smuggling outside thecountry.

For example, remittances fromnon-Saudis abroad in 2018 amounted to about SAR136bn. It is noted that SaudiArabia ranks second in the world in the volume of remittances after the UnitedStates of America. These remittances have nothing to do with wages andsalaries, but definitely with hidden investments that are considered a loss ofthe economy.

  • Kingdom losing 'billions' to underground economy

The system of special residency is one of the practical solutions to address the problems of commercial concealment as well as huge remittances, where investors and expatriates will be able to systematically and legally keep their money legally. This will drive them for establishing more investments and settling their financial returns in Saudi Arabia. The special residency will also encourage expatriates who invest their money in the underground economy to shift to the official economy and will contribute to the localization of financial returns instead of remitting them abroad and pay the taxes and fees that they do not pay under the commercial concealment.

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