Mudad, Muqeem, Qiwa: Next Steps After Setting Up in Saudi For Foreign Business
Understanding and adhering to the Kingdom's portal regulations on Mudad, Muqeem, and Qiwa is a non-negotiable next step after expanding to Saudi Arabia.
Registering with and maintaining full adherence to governmental portals such as Mudad, Qiwa, Muqeem, and GOSI represents a primary compliance area in Saudi Arabia.
These portals are specifically designed to streamline business operations and enhance regulatory oversight, as the county strives to promote an efficient, business-friendly regulatory environment.
To foster smooth operations in the Kingdom, foreign businesses must thoroughly understand the functions of these portals and the importance of achieving compliance with their requirements. This article provides a comprehensive guide to ensure compliance with Saudi portal regulations, outlining best practices to mitigate non-adherence risks.
Best Practices for Compliance Risk Management with Saudi Portals: Muqeem, Mudad and Qiwa
In Saudi Arabia, adherence to local laws not only fulfills legal obligations but also demonstrates a company's commitment to responsible business practices. This level of transparency fosters trust, builds strong positioning and drives long-term success in the fast-evolving market of Saudi Arabia.
In light of this, foreign businesses in Saudi Arabia are required to register with key governmental portals, including Muqeem, Qiwa, and Mudad, as a crucial part of the Saudi market entry process.
Recognizing that staying on top of requirements set by Saudi portals might be challenging for foreign businesses, AstroLabs, the Gulf's leading expansion platform, has incorporated comprehensive portal management services into its Saudi market setup offerings. This support has proven advantageous for foreign businesses in implementing proper record-keeping and reporting practices, thus achieving full compliance.
Additionally, the team conducts routine checks across all key governmental portals and provides monthly reports that summarize recent activities undertaken by the company in that regard, outline upcoming tasks based on expiry dates and detail necessary steps to avoid any penalties or problems before they occur.
- On its part, AstroLabs’ team conducts a monthly check on the Muqeem portal to know the status of employee Iqamas and their exit/re-entry visas and to ensure the account subscription is valid and renews it each year.
- The AstroLabs team also checks the Qiwa portal frequently, at least once a week, focusing on essential services such as creating employee contracts, issuing visas, and handling sponsorship transfers. They also provide insights into the company's compliance percentages and ensure that the account subscription is valid, renewing it each year.
- AstroLabs conducts monthly checks on the Mudad portal to ensure the company's compliance with the Wages Protection System (WPS) by adding the WPS file and processing it with payroll. If the company is compliant, it will gain access to Human Resources and Social Development services, such as visa issuance.
Compliance with the requirements of Saudi products is essential for foreign businesses across diverse sectors. Non-compliance may result in the blocking of some services as well as significant monetary fines, which can impact the company's overall financial health.
The highest cost, however, arises from disruptions to business operations and damage to the company's reputation.
Understanding the Risks of Non-Compliance with Saudi Portals
Saudi government portals are seamlessly integrated, meaning that disruptions in one portal can have a knock-on effect across multiple business areas. Below are some real examples where foreign companies faced noncompliance issues with Saudi portals and the compounding impact on their operations.
For instance, a company that fails to remove terminated employees from the system can be subject to fines for “having ghost employees,” which can be considered a case of occupational fraud.
Similarly, non-compliance with Saudi business regulations, whether it’s in the areas of employment or taxation, will cause significant challenges in portal management.
The evolving risk of noncompliance with Zakat and VAT tax declarations may lead to the Muqeem portal becoming inactive, which in turn would prevent a business from issuing exit and re-entry visas for expatriates.
The inability to process GOSI invoices through the government online portal will lead to the non-issuance of the GOSI certificate. This is considered an act of noncompliance and can result in the company being disqualified from bidding on key projects and working with any entity within the Kingdom.
Highlighting the cascading effects of non-compliance, Abdullah Aldhubaie, senior operations coordinator at AstroLabs, reported: “We have seen companies that didn't process salaries properly through the WPS, and they got blocked from the whole Ministry of Labour (MOL) portal. That means they couldn't process Iquamas, apply for a new visa, or use other services."
Failure to achieve a green rating under the Nitaqat system within the Saudization Policy, or non-compliance with the WPS, can lead to challenges in obtaining Saudization certificates, thereby hindering the renewal of Iqamas or the acquisition of visas for foreign employees.
To avoid the risk of being non-compliant with government portals, companies must ensure timely renewals of documents to prevent disruptions to operations and portal management processes. That can include commercial registration (CR) and the general manager’s Iqama, for example.
An expired CR for a company prevents it from issuing visas. The Chamber of Commerce will be locked as a result, hindering the company’s ability to delegate visas, attest letters, or issue business visit visas. An expired GM's Iqama can create significant operational challenges. That can include frozen bank accounts, financial penalties, and the complete removal of Iqama from the system.
The significance of Saudi governmental portals is becoming more evident as the Kingdom continues to attract a growing number of global companies looking to relocate their endeavors and benefit from increased business opportunities.
Using its on-ground team’s all-encompassing understanding of the market legal frameworks, AstroLabs helps foreign companies in Saudi Arabia stay abreast of any regulatory changes to ensure uninterrupted operations while maintaining compliance with Saudi labor laws.
