Explained: What Is Kafala System & Why Has Saudi Arabia Abolished It?

For over fifty years, the Kafala (Arabic for "sponsorship") system was the legal and social framework that governed the lives of millions of migrant workers across the Gulf Cooperation Council (GCC) states. Emerging in the 1950s to facilitate rapid infrastructure development and fill labour needs without granting permanent residency, it became a lightning rod for international criticism, frequently labelled a form of "modern-day slavery."

In a landmark move, Saudi Arabia-home to approximately 13 million foreign workers-announced the official abolition of the system in June 2025 as part of its ambitious Vision 2030 reform plan. This change signals a fundamental shift, but the journey from legal reform to lived reality is just beginning.

What Was the Kafala System?

Kafala was a system where a foreign worker's legal and immigration status was tied entirely to a private employer, or kafeel. This employer held virtually total control over the worker's life, minimizing state bureaucracy at the cost of the worker's autonomy.

Under this legal structure, the kafeel's approval was mandatory for a worker to:

Change Jobs: The worker could not move to a new employer without the current sponsor's consent.

Leave the Country: Many Gulf states required an "exit visa," which the sponsor had to approve.

Seek Legal Recourse: Challenging an employer was nearly impossible, as doing so often meant immediately forfeiting legal residency and risking deportation.

In practice, this imbalance of power was extreme. It enabled sponsors to confiscate passports, withhold wages, or threaten deportation with little fear of reprisal, trapping workers-particularly in construction, agriculture, and domestic work-in exploitative and abusive situations.

The Controversy: Why Was Kafala Criticized?

Kafala attracted decades of severe condemnation from human rights organizations and bodies like the International Labour Organization (ILO), which accused Gulf governments of facilitating forced labour and human trafficking.

The controversy stemmed from the system's design, which made leaving an abusive or exploitative job without permission an illegal act, punishable by arrest or deportation.

Scale of Vulnerability: The issue was immense, with an estimated 13.4 million migrant workers in Saudi Arabia alone-nearly 42% of its population.

Extreme Cases: NGOs documented conditions resembling indentured servitude, particularly for the estimated 4 million domestic workers, who are often isolated and hidden from public view.

The Path to Abolition in Saudi Arabia

The decision to abolish Kafala, while driven by moral imperatives, is primarily framed as a strategic necessity for Saudi Arabia's future:

Vision 2030 and Modernization: The reform is a cornerstone of Crown Prince Mohammed bin Salman's plan to diversify the economy, attract skilled foreign investment, and modernize the Kingdom's global reputation.

International Pressure: Mounting scrutiny from global rights groups, Western governments, and multinational companies-especially ahead of high-profile events and global partnerships (similar to pressure on Qatar before the 2022 FIFA World Cup)-pushed the government toward reform.

The New System: Changes and Challenges

Saudi Arabia's new contract-based employment system is intended to restore agency and dignity to the workforce. The most critical changes include:

While officials tout the reforms as a boost to productivity and reputation, experts caution that the true test lies in enforcement.

Remaining Challenges:

Implementation Gaps: In reality, many employers still demand consent for job changes or attempt to control exit visas, signifying a gap between the law and everyday practice.

Vulnerable Workers: Domestic workers, who are often overlooked in reform packages, may not equally benefit from the new protections.

Recruitment Abuses: Systemic issues like high recruitment fees and contract substitution in workers' home countries are not addressed by Saudi law, leaving workers in debt and vulnerable before they even arrive.

The abolition of Kafala is undoubtedly a monumental step-one of the most significant labour reforms in the modern Middle East. For millions of workers from South and Southeast Asia, it promises the restoration of basic rights: the ability to seek justice and walk away from abuse. However, the legacy of a half-century-old system means that transitioning to an equitable reality will be a slow, persistent challenge that requires vigilant enforcement and continued advocacy.