Saudi Arabia's Labor Mobility Reforms : A New Era for Foreign Workers and the Labor Market

World Bank

Published

24 Aug 2026

Coverage

Saudi Arabia

Saudi Arabia’s Labor Reform Initiative represents an important step toward a more flexible, competitive labor market with greater worker autonomy. Introduced in March 2021 as part of Vision 2030 and the National Transformation Program, the reform eased key restrictions on expatriate workers’ mobility by allowing eligible workers to change employers and manageexit and re-entry procedures with greater autonomy. This report examines how the reform has shaped labor mobility, worker outcomes, and employer behavior in Saudi Arabia’s private sector, drawing on administrative data, surveys, and qualitative interviews. The findings indicate that removing obstacles to expatriate mobility increased job-to-job transitions, particularlyamong low-skilled expatriate workers, and was associated with improved earning prospects for expatriates who changed jobs. Survey and interview evidence further suggests that the reform has strengthened workers’ bargaining position and increased competition among firms for expatriate labor, prompting some employers to adjust retention practices and workingconditions. The analysis also points to opportunities to strengthen the reform’s impact by helping smaller and labor-intensive firms adapt to a more mobile labor market, including through better workforce planning, stronger human resource practices, improved access to skills, and incentives to invest in training and worker retention. Overall, the Labor Reform Initiative offers important lessons for advancing labor market flexibility, worker protection,and Saudi Arabia’s long-term economic transformation.