Nitaqat reforms expose workforce data problem

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WHAT WE’RE TRACKING TODAY

Public Investment Fund’s EA takeover seeks EU green light

Good morning, wonderful people. Here's a quietly useful one for anyone running a payroll department this morning: Saudi companies are getting hit with Nitaqat violation notices for workers who are fully compliant — and the culprit isn't headcount, it's bad data. Jisr CEO Mohamed Akkar tells us attribution and quality are the real obstacles to Saudization compliance, not the hiring itself.

Two infrastructure moves worth clocking. The RCRC has launched the fourth phase of its Riyadh roads program — SAR 9.8 bn across four projects, 40 km of corridors built to carry north of 950k vehicles a day. And drilling contractor Ades is buying Saipem's shallow-water business in the Kingdom for USD 285 mn, picking up roughly USD 1 bn in backlog and pushing its fleet to 128 units.

EA takeover marches forward

PIF seeks EU green light for USD 55 bn EA takeover: A PIF-led consortium has applied for EU regulatory approval under the bloc’s Foreign Subsidies Regulation for its USD 55 bn acquisition of gaming giant Electronic Arts (EA), Reuters reports, citing a European Commission filing on ⁠Wednesday. The regulation is designed to prevent non-EU state-backed capital from undermining market competition.

What’s next? The European Commission has set a 30 July deadline for its preliminary review, at which point it can either clear the transaction unconditionally or launch an in-depth investigation if it flags competition concerns.

IN CONTEXT- Some mega-M&A — including the USD 110 bn Paramount-Skydance takeover — are still going forward, despite the war leaving some Gulf-backed agreements in limbo.

And while we’re on the topic: Paramount Skydance is reportedly divesting its film distribution JV with Universal Pictures to clear EU antitrust hurdles over its USD 110 bn takeover of Warner Bros Discovery, Reuters reports, citing unnamed sources. The offer will extend the European Commission’s preliminary review deadline to 21 July.

The latest regulatory victory faced by Paramount was an antitrust probe by the US Justice Department, with the institution ruling last week that the transaction wouldn’t harm competition or consumers.

REMEMBER- The transaction — partially funded by a USD 24 bn equity injection from the Public Investment Fund, the Qatar Investment Authority, and Abu Dhabi’s L’imad Holding — places CBS-owner Paramount in control of Warner Bros Discovery, the parent company of HBO and CNN.

Not out of the woods yet: Following a green light from Brussels, the merger still faces an EU Foreign Subsidies probe, targeting the Gulf funds — Paramount is expected to secure unconditional approval, Reuters reports. Several US states — including California and New York — are preparing to sue to block the merger, the newswire said.

Aramco deepens local supply chains

Aramco is providing access to more than 210 local procurement and manufacturing contracts to domestic suppliers and SMEs in the Eastern province under its IKTVA program, Mubasher reports. Senior VP of Procurement and Supply Chain Management Sulaiman Al Rubaian outlined the investment pipeline, speaking at an Asharqia Chamber event held to pull local businesses deeper into Aramco’s local supply chain ecosystem via its In-Kingdom Total Value Add (IKTVA) program.

REMEMBER- The Aramco-backed IKTVA program aims for a 70% localization score to strengthen the Saudi economy, boost local exports, and create jobs. Aramco signed 145 agreements worth USD 9 bn at last year’s IKTVA Forum.

Why this matters: Localized supply chains supported Aramco in 1Q during the US-Iran war, as local content was immediately deployed to fix disruptions and restore output. This enabled Aramco to post stellar results in the first quarter, with net income up 25% y-o-y to USD 32.5 bn.

Ladun wants to make the move to TASI in 3Q

Ladun Investment will re-submit its application to list on TASI next month, in hopes of making the move from the Nomu parallel market to the main market during 3Q, CEO Hassan Alhazmi‏ told the Arabic press.

REMEMBER- Ladun hit the brakes on its move to TASI late last year, less than a month after it submitted the request due to incomplete regulatory requirements.

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The big story abroad

Oil dips as ships leave Hormuz: An uneasy wind-down in US-Iran tensions coincided with tankers continuing to exit the Strait of Hormuz, dragging Brent crude futures down around 4.3% to USD 73.74 yesterday — its lowest level since the start of the war.

Speaking of the war: US President Donald Trump asked Congress for USD 88 bn to cover the costs of the four-month conflict. Both the Senate and House separately moved to end the war this month, displaying bipartisan (if largely symbolic) resistance to the campaign.

Micron earnings ease fears of chip-wreck: Extraordinary earnings by Micron — the largest US manufacturer of memory chips — have restored confidence in tech companies following a sharp selloff this week. It posted a 15-fold income jump to USD 28.2 bn in its financial quarter ending in May, surpassing Wall Street expectations by about USD 4 bn.

Another chip player is making moves: SK Hynix — South Korea’s premier chipmaker and most valuable company — is looking to raise USD 29 bn by issuing depositary receipts on the Nasdaq, as it capitalizes on soaring demand for AI.

BTC’s bad year gets worse: Crypto's biggest asset BTC saw its price drop below USD 60k yesterday, reaching its lowest level in 20 months, as an expected Fed rate hike forces investors to flee risky positions for safer assets.

A dry, hot European summer: A heatwave has raised temperatures across Western Europe by as much as 18 °C, resulting in dozens of deaths, disrupted power supplies, and school cancellations. The phenomenon is triggered by a weather pattern known as an Omega block, where heat is trapped for extended periods, keeping cooler temperatures from entering.

Tremor looms over Caracas: A magnitude 7.2 earthquake hit 160 km west of the Venezuelan capital city Caracas, which could lead to as many as 100k casualties, according to the US Geological Survey. The earthquake followed a magnitude 7.5 tremor.

The 2026 Nitaqat reforms are exposing a workforce data problem

Many Saudi companies are getting Nitaqat violation notices for employees who are fully compliant, and the problem is not headcount. Data attribution and quality are a big problem facing companies seeking to comply with Saudization requirements, payroll and compliance manager Jisr’s CEO Mohamed Akkar tells EnterpriseAM.

REMEMBER- A few things changed when the new Nitaqat Mutawar cycle kicked off in April: The Yellow tier is gone — establishments previously in Yellow are now Red, with blocked visas and blocked work permit renewals, and expatriate staff able to transfer sponsorship without employer consent. The general salary threshold also rose to SAR 4k from SAR 3k, with higher profession-specific floors above that. Meanwhile, profession-level quotas expanded to 269 roles, and Qiwa contract documentation became mandatory.

The macro figure suggests the Saudization drive is working. Jisr — whose platform manages payroll and compliance for roughly 800k employees, around 7-8% of the total private sector workforce — recorded that 51% of new hires across its client base between January 2024 and June 2026 were Saudi nationals, against 49% non-Saudi, according to data Jisr shared with EnterpriseAM. For a private sector that has historically skewed heavily towards expatriates, that’s a shift worth noting.

It’s a data problem — and the 2026 reforms just made it expensive. The expanded profession-specific quotas made it so a company can sit comfortably in Green on its overall Saudization rate while still triggering a violation in a single department. And, since April, only Saudi employees with contracts documented on Qiwa count toward the calculation at all. “When we looked into it, we saw that there were some employees categorized under the marketing department, but the reality was that they were in a different department entirely,” Akkar tells us.

Retention adds a second layer of complexity in labor-intensive sectors. “Now with the introduction of new laws that increase the Saudization requirement, it has made it a challenge to not only attract but to retain the talent as well,” Akkar says, speaking specifically about retail. This means compensation benchmarking — understanding what the market pays and whether a bonus structure is competitive — has become a compliance tool, according to Akkar.

The talent question

The talent supply is not the constraint. The local talent pool has grown rapidly over the past three years — in the startup sector alone, Akkar says it has expanded 5x over five years, driven by a combination of VC investment, government programs, and international talent relocating to the Kingdom. Looking ahead, he expects shortages in specific areas to become “far less significant” over time.

“The talent is available, but accessing this talent has been a bit of a challenge — finding and sourcing is the problem,” Akkar says. Globally, knowledgeable workers are findable, thanks to LinkedIn. In Saudi, the recruiting infrastructure to reliably reach that growing pool hasn’t kept pace with its growth, Akkar says.

DATA POINT- Jisr’s data shows the bulk of Saudi new hires between January 2024 and June 2026 were concentrated in food & beverages (17%), general services (12.5%), retail, wholesale and distribution (11%), construction and building (9%), healthcare and medical services (6%), and contracting (5.5%).

The missing middle: While Jisr is seeing Saudization quotas being filled across employment levels, “the middle layer is historically where we normally see some gaps when looking at the data,” Akkar says.

What separates the leaders

The companies consistently exceeding their Saudization targets have one thing in common — they started early. “Planning is crucial. Those companies who [do] well in terms of workforce planning are the ones that actually make it,” Akkar says. The second distinguishing factor is training investment — mapping future quota requirements against current workforce composition and building internal capability rather than scrambling for the smaller pool of senior Saudi hires.

What’s next

The current Nitaqat Mutawar cycle runs through 2028, and the pressure doesn’t plateau. The Human Resources Ministry has set a target of localizing more than 340k additional private-sector jobs by 2028. The C-values that set required Saudization rates by sector are scheduled to increase again for most economic activities over the next two years — meaning a company sitting in Mid Green today can slide toward Low Green without changing a single hire.

Where Jisr comes in: Jisr, which has operated in the Saudi market for more than nine years, is rolling out a new platform version that combines compliance tracking, compensation management, and workforce planning in a single system, Akkar says. Its focus is SMEs, on the basis that best practices available to companies with dedicated HR and legal teams should be accessible to the broader market. “Global HR-tech platforms don't understand the nuances of local regulations, how different government entities interact, or how data is fragmented across various systems,” Akkar says.

RCRC rolls out SAR 9.8 bn fourth phase of Riyadh road upgrades

Group 4 of Riyadh’s road network expansion kicks off: The Royal Commission for Riyadh City (RCRC) has launched the fourth phase of its Main and Ring Road Axes Development Program, rolling out four major infrastructure projects worth a combined SAR 9.8 bn, according to a statement. This phase covers 40 km of road corridors, including 14 intersections, 33 bridges, and five tunnels designed to add capacity for over 950k vehicles per day.

The projects include:

The development of the southern section of Sheikh Jaber Al Sabah Road over a 12 km stretch, which includes six main intersections, 22 bridges, and three tunnels, raising daily capacity to 350k vehicles.
The development of the central section of Prince Turki bin Abdulaziz Al Awwal Road over a 9 km stretch, with three main intersections, six bridges, and two tunnels, which should handle 200k vehicles daily.
The development of Prince Mishal bin Abdulaziz Road over a 6 km stretch, adding two main intersections, two bridges, and four pedestrian bridges, with a capacity of 200k vehicles per day.
The development of the western section of Najmuddin Al Ayoubi Road over a 13 km stretch, adding three intersections, three bridges, and two pedestrian bridges to accommodate 200k vehicles daily.

BACKGROUND- The first phase launched in August 2024, the second came in February 2025, then the third phase was in December 2025 — with a total value of SAR 29 bn across 18 projects — as part of the Ring Roads Axes Development Program, which kicked off in 2019. The program includes upgrades to some 500 km of road in Riyadh.

Ades buys Saipem’s Saudi rigs

Drilling contractor Ades is expanding its offshore footprint with a USD 285 mn acquisition of Italian Saipem’s shallow-water drilling business in Saudi Arabia, according to a disclosure. The acquisition — expected to close in 3Q — includes some USD 1 bn in backlog, alongside three owned and two leased premium jackup rigs, and will be funded through existing liquidity and financing commitments. Ades’ fleet will expand to 128 units, including 88 offshore rigs and 40 onshore units.

This comes as Gulf offshore drilling activity shows signs of recovery following months of disruptions with all affected rigs in Qatar back in service while Saudi is starting to issue rig resumption notices. Ades had temporarily suspended operations at several offshore drilling rigs across the GCC in March amid regional tensions that forced Gulf producers to slash daily crude production due to limited storage capacity.

More on Ades’ acquisitions: Ades along with its Cayman-based arm BidCo completed the takeover of Dubai-based and Oslo-listed Shelf Drilling in November last year. The acquisition folded Shelf’s fleet into Ades’s platform, creating a combined group with 123 rigs and expanding Ades’s footprint to 19 countries. The combined platform had a contracted backlog of more than SAR 34 bn.

Avilease prices USD 650 mn bond

PIF-owned aircraft lessor AviLease priced a USD 650 mn bond issuance yesterday, drawing an order book that was more than 5.3x oversubscribed against the 3.75x that met its USD 850 mn debut last November. However, the coupon climbed to 5.50% from 4.75% on the inaugural note. The deeper book at a higher price points to a tougher rate backdrop.

Not a one-off: AviLease is now a repeat USD issuer seven months after opening the channel, with the new notes maturing June 2031 and issued via subsidiary AviLease Capital under its medium-term note program.

The 2025 numbers give investors something to price against: The company reported revenue of USD 664 mn last year, marking a 19% y-o-y increase. Its fleet now runs to roughly 200 fuel-efficient jets leased to 50-plus airlines, en route to a stated goal of cracking the global top 10 by 2030.

Gasco acquires 50% stake in Jaco Gases

Gasco gets half of Jaco

The National Gas and Industrialization Holding Company (Gasco) finalized its 50% acquisition of Jaco Gases for SAR 125 mn, according to a Tadawul disclosure. The transaction was structured as a capital injection intended to double Jaco’s share capital and support its expansion plans.

REFRESHER- Gasco had received the General Authority for Competition’s green light for the move in April, after signing an equity interest purchase agreement in March.

Yet another real estate fund

The Ladun-Al Ayuni consortium will set up a closed-ended real estate fund worth at least SAR 4 bn to develop the infrastructure of Makkah’s Al Khalidiyah informal area, according to a disclosure to Tadawul. The Royal Commission for Makkah City will transfer land ownership to the fund, which will then develop the infrastructure, subdivide the land into plots, and market the project.

ICYMI: The consortium signed SAR 2.4 bn worth of infrastructure contracts with the Royal Commission for Riyadh City this week, building on contract awards in May.

Real estate funds are acting as a powerful growth engine for Saudi asset managers this year, driven by a wave of new vehicle launches. Just this week, Yaqeen Capital and Osool & Bakheet launched two hotel funds, and earlier this year, Arabian Dyar and Al Rajhi Capital launched a SAR 4.5 bn real estate fund for residential and hospitality projects in Makkah and Madinah.

Beijing wants more control over the USD 807 bn that left China last year

Chinese companies and investors moved a record USD 807 bn offshore last year, helping Hong Kong overtake Switzerland as the world’s largest offshore wealth hub, Bloomberg reports. Now Beijing is tightening its grip on where that money goes to try to stem the USD bns of outflows.

Outflow control: Authorities have imposed roughly USD 330 mn in penalties on three brokerages commonly used for offshore investing, tightened bank controls, and increased scrutiny of overseas trust structures used by wealthy Chinese. The measures amount to China’s biggest cross-border financial clampdown in a decade, according to wealth managers and advisers cited by the business news service.

Why now? Beijing appears to be seeking greater oversight of offshore assets and capital flows after years of record outflows. Or, as Sterlington partner Paul Jebely put it: “Beijing isn’t closing the door — they are installing a doorframe.”

The move has implications for its next-door neighbor. Hong Kong’s family-office count jumped 25% to 3.4k last year as mainland wealth flowed into real estate, financial markets, and luxury spending. The city’s capital markets boom has also been fueled by Chinese money, with listings, placements, and block trades topping USD 76 bn last year — the highest level in four years.

Could the Gulf benefit? Dubai has spent much of the past decade positioning itself as a global wealth hub, attracting family offices, hedge funds, and wealthy migrants seeking political stability, favorable tax treatment, and global connectivity. The city is now home to around 81.2k m’naires, up 102% over the past decade, making it one of the world’s fastest-growing wealth hubs, according to Henley & Partners.

Wealthy Chinese looking to diversify their offshore footprint — rather than concentrate it in Hong Kong — need jurisdictions that offer political neutrality, robust legal frameworks, and distance from Beijing's regulatory reach. Dubai International Financial Centre’s common-law courts, zero personal income tax, and the UAE's studied neutrality on US-China tensions check those boxes in ways that Singapore — a second offshore hub that absorbs a lot of Chinese outflows — increasingly cannot.

There are limits to the window: Much of the money leaving China still flows through Hong Kong and Singapore because of their proximity, language advantages, and established banking infrastructure. But if Beijing’s latest measures encourage wealthy Chinese to diversify their offshore footprint rather than abandon it altogether, Dubai is among the small group of jurisdictions positioned to compete for a share of that capital.

MARKETS THIS MORNING-

Asia-Pacific markets are trading higher in early trading this morning, led by South Korea’s Kospi, which is up over 4.4%. Japan’s Nikkei is looking at more moderate gains. Over on Wall Street, equities are set to open higher, with index futures in the green ahead of key US inflation data due later today.

TASI	11,007	-0.3% (YTD: +4.9%)
MSCI Tadawul 30	1,468	-0.6% (YTD: +5.8%)
NomuC	23,056	+0.3% (YTD: -1.0%)
USD : SAR (SAMA)	USD 3.75 Sell	USD 3.75 Buy
Interest rates	4.25% repo	3.75% reverse repo
EGX30	51,711	-0.1% (YTD: +23.6%)
ADX	9,993	-0.3% (YTD: 0.0%)
DFM	6,112	+0.1% (YTD: +1.1%)
S&P 500	7,358	-0.1% (YTD: +7.5%)
FTSE 100	10,462	+0.3% (YTD: +5.3%)
Euro Stoxx 50	6,215	-0.3% (YTD: +7.2%)
Brent crude	USD 73.74	-4.3%
Natural gas (Nymex)	USD 3.23	+0.2%
Gold	USD 4,015	+0.1%
BTC	USD 60,935	-2.8% (YTD: -30.5%)
Sukuk/bond market index	912.64	-0.2% (YTD: -0.7%)
S&P MENA Bond & Sukuk	152.48	+0.3% (YTD: +0.4%)
VIX (Volatility Index)	18.63	-4.4% (YTD: +24.6%)

THE CLOSING BELL: TADAWUL-

The TASI fell 0.3% yesterday on turnover of SAR 5.0 bn. The index is up 4.9% YTD.

In the green: Wafrah for Industry (+10.0%), Masar (+10.0%), and Saudi Fisheries (+9.9%).

In the red: Al Rajhi Takaful (-4.4%), CGS (-3.4%), and Al Yamamah Steel (-3.2%).

THE CLOSING BELL: NOMU-

The NomuC rose 0.3% yesterday on turnover of SAR 15.3 mn. The index is down 1.0% YTD.

In the green: Meyar (+9.9%), Hamad bin Saedan Real Estate (+9.4%), and National Building and Marketing (+5.9%).

In the red: International Human Resources (-9.9%), Time Entertainment (-8.2%), and Dar Almarkabah (-6.8%).

CALENDAR

AUGUST

30 August-1 September (Sunday-Tuesday): The Saudi Entertainment and Amusement Expo, Riyadh Front Exhibition and Conference Center.

31 August-3 September (Monday-Thursday): Leap Tech Conference, Riyadh Exhibition & Convention Center - Malham.

SEPTEMBER

8-10 September (Tuesday-Thursday): The WTM Spotlight Riyadh, Riyadh Front Exhibition & Conference Center (RFECC), Riyadh

15-17 September (Tuesday-Thursday) The Global AI Summit, King Abdulaziz International Convention Center, Riyadh.

23 September (Wednesday): Saudi National Day.

28 September-1 October (Monday-Thursday): The International Conference on Theory and Practice of Electronic Governance (ICEGOV), Prince Sultan University, Riyadh.

OCTOBER

12-15 October (Monday-Thursday): World Energy Congress, Riyadh.

26-28 October (Monday-Wednesday): ACHEMA Middle East, Riyadh International Convention & Exhibition Center.

28-29 October (Wednesday-Thursday): Procurement and Supply Chain Futures Forum, Mandarin Oriental Al Faisaliah Hotel, Riyadh.

28-29 October (Wednesday-Thursday): Real Estate Supply Chain Forum, Mandarin Oriental Al Faisaliah Hotel, Riyadh.

NOVEMBER

11-12 November (Wednesday-Thursday): Aluminum Arabia, The Arena, Riyadh.

16-19 November (Monday-Thursday): Cityscape Global, Riyadh Exhibition and Convention Centre (Malham), Riyadh.

25-29 November (Wednesday-Sunday): Aero Middle East and Sand & Fun, Thumamah Airport, Riyadh.

Signposted to happen sometime in 2026:

2H: Sabic’s USD 6.4 bn Fujian project in China to start production;
September: Saudi Paper and Packaging Expo, Riyadh International Convention & Exhibition Center;
November: The UN Trade and Development Global Supply Chain Forum to take place in Saudi Arabia;
November: The Esports Nations Cup, Riyadh;
The World Economic Forum’s Global Collaboration and Growth Meeting, Jeddah;
SkyMove Air Cargo MENA, Riyadh;
The Intervision international music competition will take place in Saudi Arabia.

Signposted to happen sometime in 2027:

The World Water Forum takes place in Riyadh;
The Ocean Race finishes in Amaala on the Red Sea;
Riyadh-Kudmi transmission line to be completed;
Capital Markets Forum takes place in March in Riyadh.

Signposted to happen sometime in 2Q 2027:

The Hail Region Water Networks Project is expected to be completed.

2027f

FEBRUARY

1-3 February (Monday-Wednesday): Energy Regulators Regional Association annual conference, Riyadh.

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