KUALA LUMPUR - Saudi Arabia has officially dismantled its 50-year-old kafala system, a labour sponsorship framework that tied migrant workers’ residency and employment to individual employers.

According to Times of India, the reform, announced in June 2025, is expected to affect around 13 million foreign workers, mostly from South and Southeast Asia, who have long faced restrictions on job mobility and limited labour rights.

The kafala system, Arabic term for sponsorship, was a modern legal framework that emerged in the Gulf states in the 1950s.

Under the arrangement, a migrant worker’s legal status was directly linked to their employer, or kafeel, giving employers extensive control over the worker’s ability to change jobs, leave the country, or access legal recourse.

This structure often led to exploitation and abuse, leaving many workers without the right to seek alternative employment or protection without their employer’s consent.

Originally designed to delegate visa and residency responsibilities to local sponsors, the system evolved into what critics described as a deeply flawed and oppressive framework.

By tying a worker’s legal status directly to their employer, the kafala system created a steep power imbalance that human rights organisations said facilitated forced labour and slavery-like conditions.

The government said the abolition of the kafala model forms part of the Kingdom’s Vision 2030 initiative, which aims to modernise the economy, improve labour conditions, and enhance workers’ welfare.

As part of these reforms, the Saudi Press Agency (SPA) said the kafala system will be replaced with a more flexible contractual employment framework.

Migrant workers can now change employers without needing approval from their current sponsor and leave the country without obtaining an exit visa.

They are also entitled to greater legal protections and access to dispute mechanisms that were previously unavailable under the old framework.

Authorities described the change as a significant step towards enhancing job mobility and boosting Saudi Arabia’s competitiveness in the global labour market.

However, Times of India reported that several human rights organisations have urged the government to ensure effective monitoring and enforcement.

These groups stressed that successful implementation is key to ensuring that the new rights result in real improvements in the daily lives of migrant workers.

Saudi Arabia hosts one of the world’s largest migrant workforces, with around 13.4 million foreign workers making up about 42 per cent of its population.

The majority of these workers come from Bangladesh and India, with over 498,000 Bangladeshis and 426,951 other regional nationals employed in the Kingdom in 2023.

About four million domestic workers, who consist of foreigners, are also employed in Saudi households.

The abolition of the kafala system is expected to reduce exploitation, improve working conditions, and grant workers greater freedom and dignity.

Analysis

The end of the kafala system marks a pivotal moment in Gulf labour migration policy.

For millions of migrant workers across South and Southeast Asia, Saudi Arabia’s reform could redefine employment mobility in one of the world’s largest migrant corridors.

If effectively implemented, the new framework may encourage similar policy shifts across neighbouring Gulf states, where versions of the kafala model remain in place.

However, rights advocates caution that meaningful change will depend on consistent enforcement and continued oversight at the workplace level.

Times of India described the development as a historic step forward for labour rights in the Gulf region, signalling a major shift in the treatment and protection of migrant workers.