For expatriate employees in Saudi Arabia, ending an employment relationship doesn’t always mean simply ending a contract and processing a final salary. Because an expatriate employee’s Iqama (residence permit) and employment status are linked to their sponsorship, how that employment ends matters.
The employee’s Iqama is tied to their sponsoring company, which means the end of employment requires the sponsor to manage the employee’s next step, whether that is a transfer to a new sponsor or a Final Exit from Saudi Arabia. One of the most important distinctions for employers and EOR providers to understand is the difference between a sponsorship transfer and a Final Exit Visa. A sponsorship transfer allows an expatriate employee to move to a new sponsor while remaining in Saudi Arabia. A Final Exit does not.
Once a Final Exit has been issued, the employee is on a departure route and cannot simply transfer to another sponsor.
A Final Exit Visa is the mechanism used to end an expatriate employee's stay in Saudi Arabia under their existing sponsorship and facilitate their departure from the country. Once a Final Exit has been issued, the employee has a 60-day grace period to leave Saudi Arabia.
This 60-day period is not a 60-day period in which the employee can continue looking for a sponsor and transfer to a new employer. The employee must secure a new sponsor and arrange a transfer before a Final Exit Visa is issued. Once Final Exit has been issued, the employee must leave Saudi Arabia.
When an expatriate employee's employment is coming to an end, they may be able to arrange a sponsorship transfer. Because expatriates work under fixed-term employment contracts, they know in advance when their contracts are due to end. Alternatively, their employment may end earlier if they receive notice of termination. The termination notice period is typically around two months.
During this period, an employee who has secured a new sponsor can potentially transfer their sponsorship and remain in Saudi Arabia.
The process therefore looks like:
Employment ending → new sponsor secured → sponsorship transferred → employee remains in Saudi Arabia
This is very different from issuing a Final Exit.
A Final Exit would generally be used when an employee is no longer required and there is no new sponsor to which they can be transferred. From an employer's perspective, issuing a Final Exit brings the employee's employment and sponsorship arrangements to an end and stops certain employment-related liabilities from continuing to accrue, including salary and applicable severance and leave-related liabilities. However, a Final Exit does not mean that every obligation disappears immediately.
During the relevant period, applicable obligations connected to the employee's sponsorship can continue, including certain medical and social insurance-related obligations. The sponsor is also responsible for the costs associated with the employee leaving the country. Once the current sponsor issues a Final Exit, the employee cannot simply be transferred to a new sponsor. The employee has 60 days to settle their affairs and leave Saudi Arabia.
Even If they find a new sponsor after Final Exit has been issued, they cannot remain in the country while waiting for a new employer to transfer their sponsorship. Instead, if the Final Exit remains in place and the employee must return to their home country. The new sponsor must then begin the employment process from scratch. For an employee who may have lived and worked in Saudi Arabia for many years, this can be a significant disruption.
The process becomes:
Final Exit issued → employee leaves Saudi Arabia → employee returns home → new employment process begins → employee returns under new sponsorship
There is one important exception. If an employee has received a Final Exit but has subsequently secured a potential new sponsor, the potential new sponsor can request that the current sponsor cancel the Final Exit. If the current sponsor agrees to cancel it, the sponsorship transfer can then potentially proceed, subject to the applicable requirements. A new sponsor cannot simply transfer the employee while the Final Exit remains active. If the current sponsor does not cancel it, the employee must leave Saudi Arabia and start the new employment process from their home country.
A separate route can remove an individual's reliance on traditional employer sponsorship: Premium Residency. Premium Residency is available to qualifying individuals who meet the relevant requirements and allows them to hold residency independently rather than relying on a traditional employer sponsor.
Premium Residency holders can move between establishments and leave and re-enter Saudi Arabia without requiring a visa. However, this is not the standard arrangement for expatriate employees. It is a premium and relatively expensive option with specific eligibility requirements, including the ability to demonstrate sufficient financial resources. For most expatriate employees, the employer-sponsored Iqama model remains the most common form of employment.
A Final Exit means exactly that: the employee is exiting Saudi Arabia.
It is not a 60-day window to find a new sponsor.
The opportunity to transfer sponsorship exists before Final Exit is issued.
Once Final Exit is issued, the employee must leave Saudi Arabia unless the current sponsor cancels the Final Exit, allowing a transfer to potentially proceed.
If it is not cancelled, the employee returns to their home country, and the new sponsor starts the employment process again.
For employers and EOR providers, understanding that distinction and acting before Final Exit is issued can make a significant difference to the employee's experience, the employer's obligations and the time and cost involved in bringing an expatriate employment relationship to an end.
If this article raised questions or highlighted areas you’d like to understand better, let’s talk.Our team can walk through the details, implications, and practical considerations for your business.
.webp)
.webp)
.webp)
.webp)
.webp)
.webp)
