PEO in Saudi Arabia - A New Road to Expansion | INS Global

PEO in Saudi Arabia

Hire Globally, Pay Locally, Expand Effortlessly

INS Global provides global PEO (Professional Employer Organization) and EOR (Employer of Record) services in over 80 countries for companies looking to enter new markets and avoid the hassle that overseas expansion usually involves.

With a PEO as your partner, you can transfer or hire employees much faster than with traditional company incorporation.

INS Global’s Saudi Arabia PEO takes care of all your HR outsourcing services and recruitment needs, saving you valuable time and expenses.

PEO in Saudi Arabia - Summary

Five Reasons Why You Should Choose a Global PEO Partner

Regulatory Assurance

A PEO has legal experts whose knowledge and guidance will assist you when dealing with an unfamiliar legal system

Less Set Up and Expenses

Spend a fraction of the time and a fraction of the cost for expansion by using a PEO to help you get set up in the new country in just a few days

Concentrate on Company Goals

Let your PEO service provider handle all aspects of hiring and HR so you can focus on planning and achieving company growth

Cost-Reduction

Pay a single monthly service fee and save thousands annually

Structural Minimization

With just one point of contact, you can have all of your HR needs met by professional specialists

What Benefits Does a PEO Provide Over Company Incorporation?

Starting your operations in a new country is not an easy process; you might find yourself having to pay high fees or fines as a result of making even the simplest errors. However, a PEO or EOR service provider can help you avoid costly mistakes and put you on the fast track toward growth and success in the new market.

A PEO:
  • Accelerates the setup period
  • Reduces overhead costs associated with expansion
  • Decreases necessary management involvement
  • Ensures total legal compliance at all points
testimonial from Manuel Ramos

Testimonial

Manuel Ramos

TERAO ASIA

Managing Director

We think INS Global is a good solution about starting in a market like China. Understanding the market doesn’t mean you need to set up a company immediately. 

5/5

How INS Global's PEO Operates in Saudi Arabia

  1. We will arrange to discuss with you to create a service plan tailored specifically to your needs
  2. Our team provides the legal entity through which you can bring employees into Saudi Arabia
  3. We take care of the hiring and HR management of your employees
  4. You and your staff continue operations and progress towards success

The Differences Between PEOs and EORs

These two services are similar, but they still have some crucial differences. Before you partner with them, it is important that you understand how each one operates in relation to you and your employees:

  • A PEO is a third-party company that supplies HR services to employees of other companies.
  • An EOR has the same range of services, but it can also legally hire and is fully responsible for the employees of other companies
  • In a PEO agreement, the contract is established between the PEO provider and the client company.
  • In an EOR agreement, however, the contract is directed by the client company but officially made between the provider and the employee
  • You can choose whichever service suits your needs better; INS Global offers both PEO and global EOR services in Saudi Arabia.

Labor Law in Saudi Arabia

Employment Contracts in Saudi Arabia

Written contracts are not mandatory in Saudi Arabia but it is strongly recommended to write out all details of employment and compensation for the employee. Contracts should be written in Arabic with all salary amounts in Saudi riyal.

Probation periods are typically 90 days but can be extended for 90 more if both parties agree.

Work Hours and Overtime in Saudi Arabia

Work hours that extend beyond 40 hours a week are counted as overtime and must be compensated at 150% of regular wages. During Ramadan, the weekly hours for Muslim employees are reduced to 36 hours a week.

Holidays and Annual Leave

Annual public holidays in Saudi Arabia include two important festivals in the Islamic calendar, Eid Al Fitr and Eid al Adha. The date of these festivals varies each year slightly. 21 days of paid leave annually is the minimum; after 5 years, this number is raised to 30 days. Unused leave days can be carried over to the next year.

Sick Leave in Saudi Arabia

Employees are entitled to four months total of sick leave. In the first 30 days, they will receive 100% of their salary; for an additional 60 days, they receive 60%; and then after this another 30 days of unpaid sick leave.

Maternity and Paternity Leave in Saudi Arabia

Female employees receive 10 weeks of paid maternity leave. Mothers are compensated at 50% of regular wages during this time if they have worked for the employer for a year prior to leave, and 100% if they have worked for three years.

Paid paternity leave is three days.

Tax Law and Social Security Contributions in Saudi Arabia

The rate for corporate income tax is 20%. There is no personal income tax on individual income in Saudi Arabia.

Employers in Saudi Arabia are expected to pay social security taxes for their employees; this amount varies but can be averaged at 10%. Employers also pay 2% towards occupational hazard insurance.

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FAQs

No, it is necessary to use a local entity abroad to comply with each country labor law.

Foreign companies can either set up a local entity in each country or use the services a local PEO (Professional Employment Organization) to hire the staff on-site directly.

The employer of record is the legal entity liable for the staff employed in a specific country. In practice, a foreign company can either open a subsidiary to become the employer of record of its abroad employees or use a PEO to act as the employer of record.

Liabilities may vary from country to country and include all the staff management responsibilities: labor contract issues, payroll management, and tax compliance, social security management, expenses claim declaration, hiring and termination
procedures, etc.

In general, 1-month is necessary to have an employee based out abroad using an existing PEO as the employe of record. When incorporating a new subsidiary to be the employer of record, the delay varies from 4-12 months.