Saudi Arabia has put an end to the long-standing Kafala system, a labor sponsorship model that exerted control over the lives and rights of millions of foreign workers. This significant decision, announced in June 2025, signifies a monumental move towards enhancing migrant welfare and labor rights in the country. It is anticipated that approximately 13 million migrant workers, predominantly hailing from South and Southeast Asia, will benefit from this reform.
The term “Kafala,” originating from Arabic meaning “sponsorship,” symbolized a complete way of life in the Gulf region, where employers wielded extensive authority over their employees, determining their job changes, ability to leave the country, or even seek legal assistance.
Initially introduced in the 1950s to regulate the influx of low-cost foreign labor crucial for developing the oil-rich Gulf economies, the Kafala system linked each migrant worker to a local sponsor, known as a Kafeel, who controlled their residency, employment, and legal standing. However, over time, this framework became a breeding ground for widespread exploitation. Employers could confiscate workers’ passports, withhold or deny wages, and limit their mobility. Workers were constrained from changing jobs, returning to their home countries, or contacting authorities in cases of mistreatment without their sponsor’s consent.
Critics frequently likened the Kafala system to “modern-day slavery,” emphasizing that it stripped workers of fundamental freedoms and made them susceptible to abuse.
The Kafala system drew increasing censure from human rights groups, international labor organizations, and foreign governments. Bodies like the International Labour Organization (ILO) and various NGOs accused Gulf nations of perpetuating forced labor and human trafficking under the guise of sponsorship.
With an estimated 13.4 million migrant workers, constituting nearly 42 percent of its population, Saudi Arabia heavily relied on foreign labor for various sectors, including domestic services, construction, and agriculture. The majority of these workers hailed from countries such as India, Bangladesh, Nepal, and the Philippines.
Among the most vulnerable were domestic workers, particularly women, who often lived in seclusion and lacked adequate legal safeguards. Reports from global rights organizations documented instances of exploitation, non-payment, and excessive work demands.
Saudi Arabia’s decision to dismantle the Kafala system follows years of international scrutiny and demands for reform. It mirrors similar actions taken by other Gulf nations, like Qatar, which revised its labor regulations ahead of hosting the 2022 FIFA World Cup.
The abolition of the Kafala system is an integral part of Crown Prince Mohammed bin Salman’s Vision 2030 initiative, aimed at diversifying the Saudi economy, reducing reliance on oil, and projecting a modern, progressive image globally.
Under the reformed structure, Saudi Arabia will transition to a contract-based employment system that empowers workers with greater autonomy and control over their lives. Migrant workers will now have the freedom to switch jobs without requiring approval from their current employer and can depart the country without an exit visa or sponsor’s authorization, thereby liberating many from exploitative situations.
Furthermore, the reforms expand access to labor tribunals and grievance mechanisms, enabling workers to report violations and pursue justice more securely. These changes seek to bring Saudi Arabia’s labor practices in line with international standards while enhancing its appeal to skilled professionals and foreign investors.