“Owners of small and medium enterprises (SMEs) with less than 10 workers can apply for recruitment visas if they have at least one Saudi employee,” the ministry said in a major move to support SME owners.

The ministry will consider the Saudi owner of the firm as its worker if he is not an employee of any other firm. “If he works in another company, then the firm has to employ at least one Saudi before the recruitment application is accepted,” the ministry said.

The ministry pointed out that firms with less than 10 employees would be able to renew the working licenses of their existing expatriate workers, even if they do not fulfill their Saudization quotas.

“This is an excellent decision,” said Hesham Rowaihy, a management consultant at a top consultancy firm who has extensive experience in the labor market and issues facing the private sector.

“This decision will not only minimize illegal ‘cover-up’ businesses run by foreigners but also open more job opportunities for Saudis,” he told Arab News.

He said the move would also help SMEs established by Saudis to compete with others. He also pointed out that the retail sector including SMEs could employ more than 500,000 Saudis, quoting a recent study.

The ministry said the new decision, to be issued next week, would enhance the competitiveness of young entrepreneurs who own SMEs, adding that many of these enterprises run by Saudis were suffering from losses as a result of stiff competition from “cover-up” businesses, effectively run by foreigners who then pay a monthly fee to the real owner, who usually has no hand in the day-to-day running.

“The decision will affect cover-up businesses run by foreigners as they have to employ at least one Saudi if they want to expand their business. This condition does not apply to businesses run by Saudis, thus it would enhance their competitiveness,” it said.