Kafala System: Meaning, History, Issues, and Saudi Arabia’s Landmark Abolition in 2025

Saudi Arabia ends its 50-year-old Kafala system under Vision 2030, granting freedom to 1.34 crore migrant workers, including 1.3 crore Indians. Learn about the Kafala system’s meaning, history, issues, and key reforms in this landmark labour policy shift.

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In October 2025, Saudi Arabia officially abolished the 50-year-old Kafala (sponsorship) system, marking one of the most significant labour reforms in the Gulf region.

The move is expected to benefit over 1.34 crore migrant workers, including 1.3 crore Indians, who form a crucial part of the country’s workforce.

The abolition of the Kafala system is not just a legal reform — it’s a humanitarian milestone, transforming labour rights and bringing Saudi Arabia closer to global human rights standards.

What is the Kafala System?

The Kafala system (Arabic: kafāla, meaning sponsorship) was a labour management framework introduced in the 1950s by Gulf countries to regulate foreign workers.

Under this system, every foreign worker (employee) was “sponsored” by a local employer (kafeel) who controlled:

The worker’s legal residency.
Their employment status.
Their ability to change jobs, travel, or even leave the country.

Essentially, migrant workers could not leave or change employers without the sponsor’s written permission, creating a dependency that often led to abuse.

Historical Background

The Kafala system emerged during the oil boom era (1950s–1970s) when Gulf nations required cheap labour for construction and infrastructure.

Initially, it aimed to streamline foreign labour inflow. However, over time, it evolved into a restrictive and exploitative framework, especially for low-paid migrant workers from South and Southeast Asia.

Countries that implemented the system included:

Saudi Arabia
Qatar
Kuwait
Bahrain
United Arab Emirates (UAE)
Oman

Why Was the Kafala System Criticised?

The Kafala system faced global condemnation from the United Nations (UN), Human Rights Watch, and Amnesty International for being a form of modern-day slavery.

Major Issues Under the Kafala System:

Exploitation and Abuse: Employers confiscated passports, delayed or withheld wages, and restricted movement.
No Freedom to Change Jobs: Workers could not switch employment without sponsor approval.
Exit Restrictions: Leaving the country required a sponsor-issued exit visa.
Lack of Legal Recourse: Migrants had little access to justice or labour courts.
Women’s Vulnerability: Female domestic workers often suffered severe abuse, isolation, and unpaid labour.

These exploitative conditions created systemic inequality, trapping millions of migrants in forced labour-like situations.

Saudi Arabia’s Abolition of the Kafala System (2025)

In June 2025, the Saudi government announced the end of the Kafala system, officially implementing reforms in October 2025 as part of Crown Prince Mohammed bin Salman’s Vision 2030 initiative.

Key Objectives:

To improve labour rights and workplace freedom.
To modernize Saudi Arabia’s image globally.
To attract skilled international workers and foreign investment.

Major Changes Under the New Labour Reform

Saudi Arabia introduced a contract-based employment framework that guarantees greater freedom and legal protection for foreign workers.

Old Kafala System	New Reformed System (2025)
Workers needed employer’s permission to change jobs.	Workers can change jobs freely after contract completion.
Employers could deny exit visas.	Workers can leave the country without exit visa or consent.
No legal recourse for abuse.	Dedicated labour courts and complaint portals introduced.
Passports often confiscated.	Passport seizure is illegal and punishable by law.
No digital contract system.	Digital employment contracts ensure transparency.

These changes align Saudi Arabia’s labour policies with global human rights conventions and International Labour Organization (ILO) standards.

Impact of the Reform

The reform will impact over 1.34 crore migrant workers, including 1.3 crore Indians, who form the backbone of Saudi Arabia’s workforce in:

Construction
Domestic work
Agriculture
Oil and energy sectors

Key Benefits:

Freedom of mobility and job change.
Improved access to justice and fair wages.
Reduction in labour exploitation and human trafficking.
Empowerment of women workers, especially in domestic roles.

Impact on Indian Migrants

India has one of the largest expatriate populations in Saudi Arabia, with over 1.3 crore Indians working in various sectors.

The end of the Kafala system means:

Safer working conditions for Indian workers.
Freedom to switch employers without harassment.
Faster repatriation and grievance redressal.
Strengthened India–Saudi bilateral labour cooperation.

The Indian government has welcomed the move as a progressive step toward migrant welfare and rights protection.

Global Context

Saudi Arabia’s move follows similar steps by Qatar, which abolished its Kafala system in 2022, ahead of hosting the FIFA World Cup.

Other Gulf countries are now under pressure to adopt labour reforms to meet international ethical and business standards, especially as they diversify away from oil dependency.

Conclusion

The abolition of the Kafala system marks a turning point in Gulf labour history.

For millions of migrants — especially from India, Bangladesh, Nepal, and the Philippines — it represents the end of decades of systemic exploitation and the beginning of fair and dignified employment in Saudi Arabia.

This landmark reform aligns with Saudi Vision 2030, promoting human rights, transparency, and inclusive growth — paving the way for a modern, worker-friendly Saudi Arabia.