Expat fines in Saudi Arabia could reach £1.7bn Under controversial new laws which came into force on November 15, the start of the Islamic new year, any private sector firm which employs more expats than locals will be fined 2,400 riyals a year (about £400) for each excess worker. Saudi Arabia's growing private sector has long depended on foreign labour, with nine out of 10 employees believed to be from abroad. Many expat workers have skills which businesses say the local population does not provide, while others -especially those from south or south-east Asia - provide far cheaper labour than that available in the local population. Terri Lundberg, an American expat who lives in Saudi Arabia, said: "Many large corporations will have no choice but to keep hiring expats, because they need more skilled or educated labour in certain sectors than the Saudi population can offer at the moment. Large corporations can absorb these costs. However, this may put a financial burden on the small to medium businesses. Mark Hammerton, head of the employment and pensions team at businesss law fim DWF, said that companies would be forced to look at their workforces, "and weigh the potential fines against the need to deliver a cost-effective and suitable skilled service." Many companies that used Saudi Arabia as a hub for business throughout the Middle East might consider moving to a place with less restrictions on expat labour, he added. The new fines are the latest step the Saudi Arabian government has taken to try and address the oil-rich kingdom's over-dependence on international workers. Under a policy known as "Saudization," it hopes to gradually oversee the transfer of knowledge and skills from the foreign workforce to Saudi nationals. Last year, it announced that private firms would have to employ a mimimum number of Saudi employees, or be restricted when applying for foreign worker visas.