Saudization is the national policy of Saudi Arabia to encourage employment of Saudi nationals in the private sector, which, as of 2006, was largely dominated by expatriate workers from Southeast Asia and to a lesser extent with western expatriates. As of 2004, the program had met with little success.
The Saudi government has enacted policies to promote Saudization, including warnings that "companies which fail to comply with Saudization regulations will not be awarded government contracts". Since 2005, the target Saudization rate has been set at 75% for the private sector, however in most sectors the actual rates are still much lower
In June 2006, negotiations between business executives and senior government leaders, including King Abdullah, led to reductions of Saudization targets in some work sectors from 30 percent to 10 percent, and full waivers from Saudization in the case of two Chinese companies, according to discussions between US ambassador James C. Oberwetter and Saudi executives.
As of April 2009, it was reported that a Saudi campaign seeks to reduce the number of foreign workers.
Nitaqat ("ranges" or "zones") is a Saudization program introduced by the Saudi Ministry of Labour. The initiative was announced in June 2011, when the Ministry of Labour passed Ministerial Resolution no. (4040). The implementation deadline for the program was in 2013.
The program classifies the country's private firms into four categories: Premium, Green, Yellow and Red. Premium and Green categories include the companies with high Saudization rates, while Yellow and Red include the ones with low rates. The classification of other companies is based on the Saudization percentage (% of Saudi employees) and the total number of employees. The companies with less than 10 employees are exempt from the program, but still need to employ at least one Saudi citizen