Outlet Localisation Decrees in Saudi Arabia: Where Each One Reads Its Unit of Account

Outlet localisation decrees are a family of ministerial decisions in which the unit of account descends, in some of them, to the outlet: to its workers, or to its shift, or to its floor area, or to the management tier within it. And some of them read the number of workers at the establishments, as in the decree on real-estate activities and professions (212535). The denominator in each decree is read from its own procedural guide.

The purpose of this guide is one thing: that when the unit of account descends to the outlet, it does not descend in a single form. Once the outlet is the denominator of the percentage, once it is the shift, once a floor area is a condition for the decree to apply at all, once the management tier is given a table of its own, and once there is no percentage but a number that follows upon reaching another number. The difference in form changes the work that falls on the employer: this one is recruitment into a particular branch, this one is an arrangement of the shift roster, this one is the measurement of an area, and this one is an examination of the management structure.

The percentages of these decrees, their targeted professions and their dates are read from the procedural guides published by the Ministry of Human Resources and Social Development, and the rule of one decree is not carried over to another. The shared architecture of localisation decrees, the way they relate to the Nitaqat programme and the definition of the entity are not set out here. On the Nitaqat side, note that a separate guide already states that the required Saudization percentages and their variation by activity and establishment size are outside its scope: see attesting employment contracts on Qiwa and its effect on the establishment’s classification.

1. The outlet as the denominator, and the threshold measured inside it

The nearest form of the question is that the outlet itself is the denominator. Of that is the decree on administrative and support professions in relaxation and personal-care centres (68098), dated 11/11/2025, at 100% in the service outlet, with a grace period of 6 months ending 11/5/2026.

Of that also is the decree on sports centres and halls (72002), and it states its unit of account expressly. Its date is 27/5/1447 AH corresponding to 18/11/2025. Its percentage is 15% of the total number of workers in the targeted professions in the sports outlet, not in the entity. Its covered activities carry two codes: 931221 for men’s sports halls and centres, and 931222 for women’s. Its grace period is 12 months, ending 18/11/2026.

Two things in this decree are passed over, and both fall inside the outlet rather than outside it:

• The threshold of application is reckoned in the outlet. The decree applies to sports outlets whose total workers in the targeted professions number four or more. So the number that brings the establishment within the decree is a number inside the outlet, not the establishment’s total workforce.
• The licence does not take the outlet out of the decree. The guide provides that the scope of application of this guide covers any sports outlet practising one of the targeted activities under a commercial registration or a licence for a different activity. What counts is the activity practised in the outlet, not what is entered in its register.

Now read the two decrees just named against a third, because the comparison is the point of this section. 72002 divides by the workers in the targeted professions inside the sports outlet. The decree on the sales outlets of seven economic activities (208819), treated in section 3 below, states 70% of the total workers in the outlet. Both are outlet-level decrees and they count different populations inside the same outlet. A fourth, 212535 in section 7, does not read the outlet at all.

So there is no single sentence that states what these decrees divide by. There is a sentence per decree, and the general rule that the denominator is the workers in the targeted professions is established for the cross-cutting profession decrees, not for this family. Note also that “applies to” is not “is calculated on”: a decree may apply to an establishment practising a named activity while computing its percentage on a population the scope sentence never mentions.

These two points give the practical rule in this family: the first question is not “what is my percentage?” but “which of my outlets is within the decree at all?”, and the answer is read inside each outlet separately.

2. The shift as a unit of account: the freight outlets decree (141722)

In this decree the unit of account may be smaller than the outlet itself. Its date is 11/9/1444 AH corresponding to 2/4/2023, and its correction period is 6 months running from 11/9/1444 AH to 11/3/1445 AH corresponding to 26/9/2023.

What it requires is “restricting work to Saudis in the entirety of the outlets providing the services of freight activities and freight brokerage”. It then excepts named professions: loading and unloading, packing and wrapping, shelf stocking, product sorting, pulling a hand cart, warehouse worker, and cleaning offices and premises.

Here is where the lesson lies. The exception is not absolute. It is bounded by two constraints, both measured on the shift and not on the outlet as a whole:

• “Provided that their proportion does not exceed 20% of the workers in the outlet in a single shift.”
• And one worker only if the shift is five workers or fewer.

The reckoning mechanism in the guide is built on the same unit: obliging the establishment to have at least one Saudi present in a single shift in the outlet.

The effect of this on the work is plain. An outlet that meets its percentage across the total of its workers may be in breach in a particular shift, because the number the decree reads is the shift’s number. So the work that falls on the employer here is not recruitment alone but the arrangement of the roster: who falls in which shift, how many workers are in it, and whether a Saudi remains in each one. For that reason the shift roster is reviewed as one of the compliance documents, not merely as an operational arrangement. The statutory limits on the length of a working day and the weekly rest that the roster has to sit inside are set out in working hours and the weekly rest in the Saudi Labor Law.

3. Floor area as a condition of application: the 200-square-metre constraint in 208819

The decree on the sales outlets of seven economic activities (208819) is dated 23/11/1443 AH corresponding to 22/6/2022, and its correction period is 12 months ending 23/11/1444 AH corresponding to 12/6/2023. Its percentage is 70% of the total workers in the outlet.

It carries a constraint that this guide did not come across in the other decrees it read here: a floor-area constraint. The decree applies to an outlet whose area reaches 200 square metres or more, and that only in two of the seven activities: the sale of security and safety equipment, and the sale of air guns, hunting gear and trip supplies. This restriction is stated in the guide; it is not an inference drawn from its absence in the other activities.

The decree also carries a stated exception: one expert in specified activities, on condition that he does not work in sales, in addition to 30% of the total workers in a single outlet.

The effect of this is that a single establishment may hold two outlets under the same decree whose treatment differs: one that reaches the area and is therefore within it, and another below it in the same activity. Area here is not a property detail. It is the door into the decree.

4. The management tier as a separate table: the postal and parcel outlets decree (208849)

This decree was published on 23/11/1443 AH corresponding to 22/6/2022, and its date of application is 10/9/1444 AH corresponding to 1/4/2023.

What it requires is “restricting work to Saudis” in the outlets providing the services, with only two excepted professions: the cleaning worker, and the loading and unloading worker.

What this decree also carries is that the guide sets out a separate table for the senior management levels, making the unit a layer in the structure rather than a position on the ground:

• Chief executives at 100% and the first level of senior management at 60% by 10/9/1444 AH corresponding to 1/4/2023.
• The second level at 70% by 16/3/1445 AH corresponding to 1/10/2023.

An establishment that reads this decree as an obligation at the counter alone has read half of it. The work that follows from it is an examination of the management structure: which posts sit in the first level and which in the second, and who occupies them.

A caution on dates here: this decree’s page at the Ministry carries a publication date and an issuance date that are far apart, and for that reason what is built on here is the publication date and the date of application, without the issuance date.

5. A number in the outlet that brings about a number: the women’s beauty and tailoring outlets decree (141602)

This decree is dated 11/9/1444 AH corresponding to 2/4/2023, its grace period is 9 months ending 11/6/1445 AH corresponding to 24/12/2023, and its activities carry two codes, 141060 and 960210.

It is built on two limbs of differing form:

• The administrative professions: “the entirety of the women workers”, namely the branch manager, the deputy branch manager, the human-resources supervisor, the section supervisor, the customer accountant, reception, customer service, the warehouse keeper, and the sales professions.
• The technical professions: one Saudi woman employee in one of the technical professions, for outlets employing 10 or more non-Saudi women workers.

The second limb is a form standing on its own: there is no percentage in it at all, but a number that follows upon reaching a number. An outlet employing nine non-Saudi women workers does not fall within this limb, and one employing ten does. And the entry point for the reckoning is the number of women workers in the outlet, so an establishment with multiple outlets reads this number in each outlet separately.

6. The type of site changes the percentage: amusement parks and cinema

Among the decrees of this family are those in which the percentage changes with the type of site rather than with the number of workers in it.

The decree on amusement parks and family entertainment centres (165575) is dated 28/8/1443 AH and applies from 10/2/1444 AH. Its percentage is 70% for standalone and seasonal sites and 100% inside enclosed commercial complexes. So a single operator may hold two sites whose treatment differs by the description of the site alone.

The cinema sector decree (212560) is dated 24/11/1442 AH corresponding to 4/7/2021. Its first stage is “restricting work to Saudi citizens at 100%” in the sales professions inside the cinema: ticket sales, food and beverage sales, and retail sales, together with the supervisory professions inside the cinema, with exceptions capped at 15% expatriate labour. The first stage runs 90 days from the date of publication of the decree, that is to 24/2/1443 AH corresponding to 2/10/2021, and the second stage 360 days, that is to 24/11/1443 AH.

Among the constraints in this decree is a spatial one: “inside the cinema”. It describes the place where the profession is performed, not the name of the profession alone, which is what makes the job title on its own insufficient to determine who falls within the decree.

7. A percentage with a stated floor alongside it: real-estate activities and professions (212535)

This decree is dated 24/11/1442 AH corresponding to 4/7/2021, and its grace period is 90 days from the date of publication of the decree to 24/2/1443 AH corresponding to 1/10/2021.

Its percentage is 70% of the total number of workers at the establishments operating in real-estate activities, “provided that the number of Saudis in the establishment is not fewer than one Saudi employee as a minimum”. And it carries, on top of that, “restricting work to Saudis at 100%” in the professions of real-estate brokerage, sustainable construction and real-estate arbitration.

This is the counter-case that keeps the rest of this guide honest. The population 212535 divides by is not the outlet and not the targeted professions. It is the total number of workers at the establishments. So a reader who carries the outlet across from section 1, or the targeted professions across from 72002, has carried a denominator this decree does not state.

What is read in this decree is a set of rules together, not one rule: a percentage on the total workers, a floor fixed by a number rather than by a percentage, and a full restriction on three named professions. Whoever reads the percentage alone has missed what comes with it.

8. And what no unit inside the outlet was read for

In the family of activity decrees there are those for which this guide did not come across a unit of account inside the outlet. The decree on the customs clearance activity (212497) and the decree on vehicle driving schools (212519) are dated 24/11/1442 AH corresponding to 4/7/2021, and the grace period of each is 6 months to 26/5/1443 AH corresponding to 30/12/2021. The percentage of the first is 100% for the targeted professions, and the percentage of the second is 100% for non-professional drivers.

What is read here is this alone. That this guide did not come across a unit of account inside the outlet in these two decrees is not a denial of its existence. It is a report of the limits of what was read. Whoever wishes to build on them returns to the guide of each decree. The targeted professions in every decree of this family are read from its own guide and from the Saudi Standard Classification of Occupations, and their complete tables and codes are not reproduced here.

What the text does not address

• Aggregating outlets: whether a shortfall in one outlet is made up by a surplus in another outlet of the same establishment. This guide did not come across it in a source, so neither denial nor affirmation is stated on it.
• How the percentage and the exception combine in 208819: the text of the exception is read as it stands, but the order in which it operates alongside the 70% was not read in detail.
• How the area that counts for the 200-square-metre constraint is measured, and from which document it is taken.
• A wage floor for counting in the decrees of this family: this guide did not come across a published floor for them in the guides it read, and that is not a statement that there is no floor in them. Where a decree elsewhere does state one, the measure is the contribution wage registered at GOSI, which is set out in the contribution wage at GOSI.
• The definition of the first and second senior-management levels in the postal outlets decree: the table states the percentage, and no criterion for classifying posts across the two levels is read from it.
• The Gregorian date of the second stage of the cinema decree and of the two dates of the amusement parks decree: what is read is Hijri, and it is not converted here.
• The amount of the fine that follows a breach of any of these decrees. The decrees refer to the tables of violations and penalties, and the relationship between a decree’s reference and the table published today was not established here.
• The complete tables of targeted professions, and their codes, in each of these decrees: they are read from its guide and from the Saudi Standard Classification of Occupations, and they are not reproduced in full here.

And a caution that has to be added: an activity this guide did not come across is not thereby outside localisation. The reading here rested on the procedural guides published by the Ministry, and an activity may be reached by a profession decree, or a regional decree, or a decree whose guide has not been published.

What your system should record

The number that many of these decrees read is a number inside the outlet, so what is useful to hold in your records is what can be tied to a particular outlet:

• A list of the outlets, each on its own, with the activity practised in it and its activity code, not the establishment’s activity taken as a whole.
• The number of workers in each outlet, and the number of them in the targeted professions inside it. Some decrees read the first and some read the second.
• The attachment of every employee to an outlet, not to the establishment alone. An employee not attributed to an outlet does not enter the reckoning of any outlet.
• The shift roster preserved with its date: who was in each shift and how many they were, wherever the decree reads the shift. The related record of actual hours and compensatory rest is described in compensatory rest and the basis for computing overtime.
• The area of the outlet where the area is a condition of the decree’s application.
• The level of the post in the management structure where the decree sets out a table for the senior levels.
• The dates of the decrees that reach your outlets, and the ends of the correction periods in them. The registered job title of each worker, which is what the contract itself has to carry, is treated in the mandatory particulars of the Saudi employment contract.

Checklist

• Do you know which of your outlets is within a decree, and from which procedural guide you read that?
• Is the threshold of application in your decree reckoned on the outlet’s total workers or on the workers in the targeted professions inside it?
• Do you have an outlet practising a targeted activity under a register or licence for a different activity?
• Does your decree read the shift? And if it does, does each shift meet what the decree requires, not the total of the outlet’s workers alone?
• Do you know the area of each outlet where the area is a condition of application?
• Have you looked at the senior management levels where the decree sets out a table for them, or have you confined yourself to the workers at the counter?
• Do you have an outlet in which the number of non-Saudis has reached the threshold on which the decree builds an obligation stated as a number?
• Is every employee of yours attributed to a particular outlet in your records?
• Are you watching the ends of the correction periods, or waiting for the effect of a breach?

Why this turns into a problem

The prevailing error in this family is not an error in the division. It is an error in the choice of the unit. Whoever reads his decree at the level of the establishment while it is measured on the outlet sees a reassuring number the decree does not read. Whoever reads it on the outlet while it is measured on the shift sees an outlet that complies and a shift that does not. And whoever confines it to the workers at the counter while his decree carries a table for the senior management levels has read half the decree.

What compounds it is that the effect appears late. An establishment is not notified that it has fallen outside what its decree requires on the day it falls outside, and the breach is known when it occurs. Then many of these facts cannot be recovered retrospectively: a shift roster that has passed, or the attribution of an employee to an outlet that was not recorded on the day, or an area that was never documented. Holding these facts in a single file at the time they occur is easier than extracting them after the question has been asked.

This is where it pays to have an employee’s facts in a single file. That is what Qoyod HR provides: a single employee file holding the contract, the documents and their expiry dates with an alert before them, an attendance record for each employee, and their leave, salary and end-of-service entitlements. It is a standalone HR system with its own subscription, and the link with Qoyod accounting is available now. As for the localisation percentage laid down in your decree, it is read from that decree’s guide, and no system reckons it.

For more guides and templates, browse the HR Resource Centre.

Frequently asked questions

What does it mean for a localisation decree to be reckoned on the outlet?

It means that the denominator of the percentage is read inside the outlet rather than across the whole establishment, and its form differs from decree to decree. The decree on the sales outlets of seven economic activities (208819) states 70% of the total workers in the outlet, the decree on sports centres and halls (72002) states 15% of the total number of workers in the targeted professions in the sports outlet, and the decree on administrative and support professions in relaxation and personal-care centres (68098) states 100% in the service outlet, stating the level without stating a population it is measured on. This is not the form of every decree in this area, and the level of measurement in each decree is read from its own procedural guide.

Is a shortfall in one outlet made up by a surplus in another outlet of the same establishment?

This guide did not come across an answer to that in a source, so neither denial nor affirmation is stated on it. The denominator of the percentage differs from decree to decree: some of it is read in the outlet, and some of it is read in the total number of workers at the establishments, as in the decree on real-estate activities and professions (212535). The unit of account in each decree is read from its own guide, and the aggregation of outlets is a matter to be referred to the statutory text and the competent authority.

Which decree has the percentage reckoned on the shift?

The decree on the outlets providing the services of freight activities and freight brokerage (141722). It restricts work to Saudis in the entirety of the service outlets and excepts named professions, among them loading and unloading, packing and wrapping, and the warehouse worker, provided that their proportion does not exceed 20% of the workers in the outlet in a single shift, and one worker only if the shift is five workers or fewer. Its reckoning mechanism is to oblige the establishment to have at least one Saudi present in a single shift in the outlet.

Does the sales outlets decree apply to every outlet whatever its area?

No. The decree on the sales outlets of seven economic activities (208819) carries a stated area constraint: it applies at 200 square metres or more, and that for the two activities of selling security and safety equipment and selling air guns, hunting gear and trip supplies only. As for how the area that counts is measured and the document it is taken from, this guide did not come across it.

Are the outlet decrees confined to the workers at the counter?

Not in every decree. The decree on the outlets providing postal and parcel services (208849) sets out a separate table for the senior management levels: chief executives at 100% and the first level of senior management at 60% by 10/9/1444 AH corresponding to 1/4/2023, and the second level at 70% by 16/3/1445 AH corresponding to 1/10/2023. As for the criterion for classifying posts across the two levels, it was not read in the guide.

Does an outlet fall outside the decree if its commercial registration is for a different activity?

Not in the decree on sports centres and halls (72002). Its guide provides that its scope of application covers any sports outlet practising one of the targeted activities under a commercial registration or a licence for a different activity. This is stated in this decree, and it is not carried over to another.

Statutory references

This guide rests on the procedural guides published by the Ministry of Human Resources and Social Development and on the signed ministerial decisions attached to them, and in particular the guides for: the sales outlets of seven economic activities (208819), the outlets providing the services of freight activities and freight brokerage (141722), the outlets providing postal and parcel services (208849), the women’s beauty and tailoring outlets (141602), sports centres and halls (72002), administrative and support professions in relaxation and personal-care centres (68098), amusement parks and family entertainment centres (165575), the cinema sector (212560), real-estate activities and professions (212535), the customs clearance activity (212497), and vehicle driving schools (212519).

No percentage, date or grace period that was not read from the guide of its own decree is published in this guide, nor any fine amount attributed to a localisation decree, nor any conversion of a Hijri date into a Gregorian one or the reverse. Decrees that are updated from year to year have their dates reconsidered from their page at the Ministry before anything is built on them.

Two subjects that border these decrees and are not settled in this guide: registration with the General Organization for Social Insurance, and the contributions recorded against a worker under it. Neither is read from the guides of these decrees.

This guide is an organisational explanation and not legal advice. In a live dispute or a particular case, the statutory text and the competent authority remain the reference.