Kuwait is set to introduce a new system for work visas and transfers in June 2024. The revamped process focuses on needs-based recruitment and stricter regulations to improve efficiency and transparency for employers and foreign workers.
The Public Authority for Manpower (PAM) in Kuwait is gearing up to implement a new system for granting work visas and transfers for private sector employees, starting early June 2024. This move comes a month after Resolution No. 3 of 2024 was issued, outlining significant changes to the labour market.
Key Provisions of the New Resolution
New Needs-Based Work Permits
Under the revised system, employers seeking foreign workers must obtain work permits. PAM will issue these permits based on a thorough needs assessment by the relevant department. To cover administrative costs, a new fee of 150 Kuwaiti dinars (approximately USD 490) will be charged for each work permit.
Transfer Fees
The new system also introduces a streamlined process for transferring employees between employers. Workers recruited with a work permit can now be transferred to another company within three years for a fee of 300 Kuwaiti dinars (approximately USD 980).
Exemptions
Certain entities are exempt from these new regulations, including:
Government-owned companies
Healthcare facilities licensed by the Ministry of Health
Educational institutions
Foreign investors approved by the National Promotion Authority
Sports clubs
Public benefits associations
Cooperative societies
Labour unions
Charitable endowments
Licensed agricultural plots
Fishing activities
Livestock operations
Commercial and investment real estate
Industrial facilities
Small industries
Addressing Labor Market Challenges
Resolution No. 3 of 2024 addresses severe labour shortages in sectors like construction and contracting, where wages have surged dramatically.
By allowing direct recruitment from abroad, the government hopes to eliminate the residency trade and provide businesses with the necessary workforce without inflating labour costs.
Expected Benefits of the New System
Resolution No. 3 of 2024 aims to achieve several key objectives:
1. Reduce Labor Costs and Prices: By allowing companies to hire based on specific needs, the government hopes to control rising labour costs and ultimately lower prices for goods and services.
2. Targeted Recruitment: Businesses can now recruit foreign workers based on their needs, eliminating the need for internal transfers within the country.
3. Combat Residency Trade: The new system aims to crack down on the illegal practice of residency trading.
4. Address Labor Shortages in Key Sectors: Streamlined recruitment processes should ease labour shortages in critical sectors like construction, where wages have skyrocketed due to a lack of qualified workers.
Conclusion
Implementing this new system in June 2024 will significantly change Kuwait’s labour market. Focusing on needs-based recruitment and stricter regulations, the government aims to create a more efficient and transparent system for employers and foreign workers.
