Foreign Worker Remittances from Saudi Arabia: 144 Billion SAR Officially and 500 Billion in Shadow Economy... Where Does the Kingdom's Wealth Go?

Introduction: The Kingdom as World's Second Largest Remittance Source

Saudi Arabia ranks second globally after the United States in terms of foreign worker remittance volume, according to World Bank data. This figure isn't just a passing statistic but reflects a complex economic reality where development needs intertwine with financial drain challenges, and official figures intersect with a shadow economy estimated at hundreds of billions.

In this comprehensive analysis, we reveal the true figures for both legal and illegal remittances, examine their economic impact on the Kingdom, government measures to limit this drain, and what it means for the real estate market and local economy.

Part One: Legal Remittances... Saudi Central Bank Figures

2024-2025 Statistics

According to Saudi Central Bank (SAMA) data, remittances by foreign residents in the Kingdom reached approximately 144.2 billion SAR (38.4 billion USD) in 2024, recording a 14% increase compared to 2023 which saw remittances of 126.8 billion SAR. This value is the highest since 2021, reflecting accelerated economic activity and rising expatriate worker numbers.

During the first nine months of 2025, remittances reached 125.21 billion SAR (33.4 billion USD), noticeably higher than the same period in 2024. Most notably, March 2025 alone recorded remittances of 15.5 billion SAR, the highest monthly figure in 9 years, specifically since June 2016.

Monthly Distribution of Remittances

The average monthly remittance ranges between 12 and 15 billion SAR, with seasonal increases during holidays and before summer vacation periods. October 2025 recorded remittances of 13.7 billion SAR, a 2% increase over the same period in 2024.

Part Two: Expatriate Workforce Size... Who Transfers These Billions?

Official Figures

Statistics from the Ministry of Human Resources and Social Development indicate that foreign workers in the Kingdom exceeded 13 million by end of 2024, comprising about 44% of the total population. This percentage is among the highest globally, reflecting the Saudi economy's heavy reliance on expatriate labor across various sectors.

These workers are accompanied by more than 2.2 million dependents including spouses and children, bringing total foreign residents to approximately 15 million people.

Workforce Distribution by Nationality

Indian nationality leads the expatriate workforce list with about 2.5 million workers, followed by Pakistani, Bangladeshi, Egyptian, and Filipino. This workforce concentrates in construction at 35%, retail and wholesale trade at 25%, domestic services at 20%, and other sectors at 20%.

Average Per-Person Remittance

By simple calculation, the average annual remittance per expatriate worker is about 11,000 SAR through official channels, approximately 900 SAR monthly. However, this figure varies significantly by profession and salary, potentially reaching multiples of this amount for skilled workers and high earners.

Part Three: Shadow Economy and Commercial Concealment... Hidden Figures

What is Commercial Concealment?

The Anti-Commercial Concealment System issued by royal decree in 1442 AH (2020) defines concealment as enabling a non-Saudi person to practice an economic activity in the Kingdom they're not licensed for, whether through using the citizen's name, license, or commercial registration. Simply put, it's when an expatriate works for their own account under cover of a Saudi commercial registration, paying a meager monthly amount to the concealing citizen.

Commercial Concealment Volume

The Ministry of Commerce revealed that commercial concealment in the Kingdom is estimated between 300 and 400 billion SAR annually across various sectors, while some expert estimates suggest the figure may exceed 500 billion SAR. These funds are entirely managed by expatriate workers, with the majority transferred abroad through unofficial channels.

In December 2019, the Saudi Public Prosecution revealed the largest commercial concealment case in the Kingdom's history, with amounts transferred abroad reaching 5 billion SAR involving one Saudi citizen and three expatriates. A gang was also caught in Riyadh in 2020 having transferred more than 500 million SAR abroad in just 8 months.

Most Concealment-Prone Sectors

According to official statistics, most concealment cases concentrate in construction and contracting at 40%, retail trade and consumer goods at 35%, and professions and services at 25%. Asian nationalities (Bangladesh, India, Pakistan) lead the list of workers involved in concealment at 70%, followed by Arab nationalities (Yemeni, Egyptian, Syrian).

Illegal Transfer Methods

Methods for transferring concealment money abroad vary, most prominently: unlicensed money transfer offices spread in popular neighborhoods, fake trade credits for non-existent purchases and goods, import invoice manipulation by inflating apparent values, and currency exchange through unofficial networks.

Part Four: Economic Impact... Liquidity and Resource Drain

Remittance Percentage of GDP

Official expatriate worker remittances represent about 5% of the Kingdom's gross domestic product, a very high percentage compared to international standards. The United States, which ranks first globally in remittance volume, has remittances not exceeding 0.3% of its national product. Adding estimated unofficial remittances, the percentage may reach 15-18% of GDP.

Negative Effects on the Economy

This financial drain causes several negative effects on the national economy. First is local liquidity drain, as hundreds of billions annually exit the local economic cycle, reducing purchasing power and weakening local demand. Second is increased unemployment rates, as commercial concealment leads to expatriates monopolizing job opportunities and employing their compatriots, depriving Saudis of these opportunities.

Other effects include tax evasion and zakat loss, as concealment activities aren't recorded in official records, thus evading taxes, zakat, and fees. Also, market competition distortion, as concealment activities compete with legal establishments at lower prices by not bearing regulatory costs and fees. Finally, commercial fraud spread, as these activities aren't subject to oversight, leading to spread of counterfeit and substandard products.

Impact on Real Estate Market

The real estate market is closely linked to these remittances. On one hand, expatriates form a large segment of tenants in the Kingdom, and any decrease in their numbers directly affects rental demand. On the other hand, money transferred abroad could have been invested locally in buying or renting better properties, revitalizing the real estate market and raising values.

Part Five: Government Measures to Combat Drain

New Anti-Commercial Concealment System

The Kingdom issued the new Anti-Commercial Concealment System under Royal Decree No. (M/4) dated 1442/1/1 AH, which included severe penalties: imprisonment up to 5 years instead of two, fines up to 5 million SAR instead of 2 million, confiscation of illegal money and profits, license cancellation and commercial registration deletion, deportation of convicted expatriates and entry ban to the Kingdom, and banning convicted citizens from any commercial activity for 5 years. The system also rewards informants about concealment cases with up to 30% of collected fines.

Financial Levy on Expatriate Workers

Since 2017, Saudi Arabia has implemented fees on expatriate workers and dependents, with dependents paying 400 SAR monthly (4,800 SAR annually). Expatriate worker fees range between 700 and 800 SAR monthly depending on the establishment's nationalization ratio. These fees aim to reduce reliance on foreign labor and encourage Saudi employment.

Nationalization Programs (Nitaqat)

The Ministry of Human Resources launched the developed Nitaqat program requiring establishments to meet specific nationalization ratios, restricting some professions exclusively to Saudis. The program contributed to more than 2.2 million expatriates leaving the Saudi private sector between 2017 and 2021.

Financial Levy Cancellation for Industrial Establishments

In December 2025, the Council of Ministers announced cancellation of the financial levy on expatriate workers in licensed industrial establishments, aiming to enhance Saudi industry competitiveness. This decision reflects the balance the Kingdom seeks between attracting investments and limiting financial drain.

Part Six: The Other Side... Remittances as Positive Economic Indicator

Reflection of Economic Strength

Some economists believe rising expatriate remittances isn't necessarily negative but may reflect the Saudi economy's strength and attractiveness to workers. Every increase in remittances means real economic movement exists, ongoing projects, and wages being paid, indicating activity being built on Kingdom soil.

Workers' Role in Development

The vital role of expatriate workers in implementing major projects under Vision 2030 cannot be denied, from NEOM to Qiddiya to the Red Sea Project. These projects need millions of skilled workers whose sufficient numbers aren't currently available locally.

Part Seven: Proposed Solutions to Limit Drain

Encouraging Expatriate Local Investment

Instead of transferring their savings abroad, expatriates can be encouraged to invest part of their money in Saudi Arabia through dedicated investment funds, facilitated stock market investment, allowing expatriates property ownership in specific areas, and providing tax incentives for investors among them.

Enhanced Remittance Monitoring

Each expatriate's remittances can be linked to their registered salary in social insurance, so if their remittances exceed declared income, the source of these funds is investigated. This simple measure may reveal many concealment cases.

Accelerating Quality Nationalization

Focusing on nationalizing high-value, high-salary jobs rather than quantitative nationalization that may produce disguised unemployment. A Saudi holding a 15,000 SAR salary job is better for the economy than three Saudis with 4,000 SAR salaries in marginal jobs.

Conclusion

Expatriate worker remittances from Saudi Arabia represent a compound phenomenon combining economic necessity with financial drain. On one hand, the Kingdom needs millions of workers to execute its ambitious projects. On the other hand, hundreds of billions exit the local economy annually, much of it through unofficial channels.

The solution doesn't lie in closing doors to expatriate workers but in regulating their presence, firmly combating concealment, encouraging local investment of their savings, and accelerating quality job nationalization. The Kingdom has taken serious steps in this direction through the new anti-concealment system and nationalization programs, but the road remains long to achieving the required balance between development requirements and preserving national wealth.