Kuwait is overhauling its labor permit system to address workforce shortages and control rising labor costs. This major policy shift, approved by the Kuwaiti Public Authority of Manpower (PAM), will take effect on June 1.
The amendments are designed to simplify the recruitment process by eliminating the need for employers to transfer existing manpower within Kuwait before hiring foreign workers. This change aims to foster business development and make the hiring process more efficient.
Previously, the requirement to prioritize internal transfers and limit foreign recruitment led to increased wages and higher consumer prices, necessitating these reforms.
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The new regulations also adjust the fee structure for work permits to promote labor market stability and prevent illegal visa trading. Employers will now pay KD150 for a new work permit and an additional KD300 to transfer an employee between companies within the first three years, provided they have the employer’s consent.
These steps are part of Kuwait’s broader efforts to stabilize the labor market and reduce employment costs, creating a more sustainable economic framework.
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Last year, Kuwait allowed private sector employees to take on secondary jobs with some restrictions, including a maximum of four hours per day, to alleviate labor shortages, particularly in the contracting sector.
With foreigners making up approximately 3.2 million of Kuwait’s 4.8 million population, these reforms are expected to significantly impact the nation’s labor market and economic outlook.
