Saudi Arabia abolishes Kafala System after 50 years; grants freedom and new rights to millions of migrant workers

In a groundbreaking move, Saudi Arabia has officially dismantled its 50-year-old Kafala system, a labor sponsorship framework that tied migrant workers ' residency and employment to individual employers. This reform, announced in June 2025, is set to impact approximately 13 million foreign workers, primarily from South and Southeast Asia, who have long faced restrictions on job mobility and limited labor rights.
What was the Kafala system and how it Began?
The Kafala system, Arabic for "sponsorship," is not an ancient tradition but a relatively modern legal framework that emerged in the Gulf states around the 1950s. The Kafala system was a labor sponsorship arrangement prevalent in Gulf Cooperation Council (GCC) countries, including Saudi Arabia. Under this system, migrant workers' legal status was directly tied to their employer (kafeel), granting the employer significant control over the worker's ability to change jobs, leave the country, or even access legal recourse. This often led to situations where workers faced exploitation, abuse, and violations of their basic rights, as they were unable to seek alternative employment or legal protection without their employer's consent.

The system was designed to delegate the legal and administrative responsibility for the worker (including visa and residency status) to a local individual or company-the kafeel-ensuring the workforce was regulated without burdening the state bureaucracy. Over time, this system evolved into a deeply criticized structure. By tying a worker's legal status directly to their employer, it created a steep power imbalance, enabling widespread exploitation that human rights organizations described as facilitating forced labor and even slavery-like conditions.

The reform: What changed?
Saudi Arabia's recent labor reforms have replaced the Kafala system with a contractual employment model. According to the Saudi Press Agency (SPA), this new system allows migrant workers to change employers without needing their current employer’s approval, leave the country without an exit visa, and access legal protections that were previously inaccessible under the Kafala framework.

The reform is part of Saudi Arabia's broader Vision 2030 initiative , which aims to modernize the economy and enhance the rights and welfare of foreign workers. While the government has described the reform as a significant step forward, human rights organizations have emphasized the need for comprehensive implementation and monitoring to ensure that these changes translate into tangible improvements for workers.
Workers under the Kafala System
Saudi Arabia's Kafala system has significantly influenced the lives of millions of migrant workers. Here are some key statistics:

• Total Migrant Workers: Approximately 13.4 million migrant workers reside in Saudi Arabia, constituting about 42% of the country's population
• Major Source Countries: The largest groups of migrant workers come from Bangladesh, and India with over 498,000 Bangladeshis and 426,951 other neighbouring nationals migrating to Saudi Arabia for employment in 2023
• Domestic Workers: Around 4 million individuals work as domestic workers in Saudi Arabia, all of whom are foreign nationals
• Employment Sectors: Migrant workers are employed across various sectors, including construction, domestic work, hospitality, and agriculture, often under the restrictive conditions of the Kafala system.

Impact of the new Kafala reforms on migrant workers
Saudi Arabia’s abolition of the Kafala system is set to transform the working lives of around 13 million migrant workers. Under the new regime, workers can freely change employers without needing approval from their current sponsor, leave the country without an exit visa, and access legal protections that were previously unavailable. This shift is expected to reduce exploitation, improve working conditions, and give workers greater agency and dignity. By empowering employees to negotiate terms more fairly, the reform also strengthens economic participation and motivation, marking a historic step forward in labor rights in the Gulf region.