The kafala system is a sponsorship framework used across the Gulf and parts of the Levant that ties a migrant worker's legal residency and right to work to one named sponsor, the kafeel, who is almost always the employer. The sponsor holds the work permit, and historically controlled whether the worker could change jobs or leave the country.
That control is what separates kafala from an ordinary work permit. The International Labour Organization describes sponsorship as binding a worker's status to an individual sponsor so tightly that the worker cannot normally resign, transfer employment, or leave the country without permission. Human Rights Watch and Amnesty International have documented what that produces in practice, including wage theft, passport confiscation, and conditions amounting to forced labour.
Reform has been real in some states and thin in others, and it has moved at different speeds for different categories of worker. If your firm places engineers, delivery staff, or site teams into the UAE, Saudi Arabia, Qatar, Kuwait, Bahrain, or Oman, this is the law that governs the employment relationship at the far end of the placement, whatever your contract with the client says.
Table of contents
- What is the kafala system?
- Why the kafala system matters to firms placing workers in the Gulf
- Kafala reform status by country, with dates
- What the reforms did not change
- How kafala differs from work visa sponsorship elsewhere
- What Indian staffing and IT services firms should check before a Gulf placement
- Where Fabric fits, and where it does not
- FAQ
What is the kafala system?
The kafala system is a set of immigration and labour rules under which a Gulf or Levantine state delegates legal responsibility for a migrant worker to a private sponsor. Kafala is the Arabic word for sponsorship, and the sponsor is the kafeel. The sponsor applies for the worker's entry, holds the work permit, and is the party the state holds accountable for that worker's presence in the country. In its unreformed form, the arrangement gave the sponsor four practical powers: to bring the worker in, to end the worker's legal status, to withhold consent for a move to another employer, and to control the worker's departure. That bundle is what makes kafala a labour governance system rather than a visa process. The ILO notes that most sponsorship regimes in the region also carry an absconding rule, which lets an employer report a worker as having fled and thereby cancel that worker's residency and work permit.
How the sponsorship relationship works
Three parties sit in the arrangement: the state, the sponsor, and the worker. The state issues quotas and permits to the sponsor. The sponsor recruits, often through a labour agency in the sending country.
The worker's residency is then issued against that sponsor's file. Ending the employment relationship, for any reason, therefore puts the worker's right to remain in the country in question.
Where kafala applies
Kafala is the governing framework in all six Gulf Cooperation Council states: Saudi Arabia, the UAE, Qatar, Kuwait, Bahrain, and Oman. Versions of it also operate in Jordan and Lebanon.
The rules are not uniform across those countries, and this is the single most common error in general coverage of the topic. Each state has its own labour law, its own permit authority, and its own reform timeline, so a statement that is true in Doha may be false in Kuwait City.
Why the kafala system matters to firms placing workers in the Gulf
For an Indian IT services or staffing company, the commercial relationship is with the client, but the employment relationship on the ground is with whichever entity holds the work permit. That entity is the sponsor, and it is subject to the destination country's labour law rather than to the terms of your master services agreement. This matters at four points in a placement. It determines who can lawfully deploy the worker on site, what happens when a project ends earlier than the visa, whether the worker can be moved to a second client without a fresh permit, and what the worker's options are if the sponsor stops paying. It also determines your exposure. Where recruitment fees, passport retention, or contract substitution occur anywhere in the chain, the client's audit, the sending state's regulator, and the destination ministry can all take an interest.
The practical consequences show up as a small number of recurring operational questions:
- Who is the named sponsor on the permit, your local entity, the client, or a third-party manpower supplier?
- Can the worker transfer to another employer during the contract term, and on what notice?
- Is an exit or departure approval required before the worker can travel home?
- Which authority handles a wage complaint, and how long does it take?
- Does the worker's role fall inside the labour law, or in an excluded category?
The last question is the one most often skipped. Reform in the Gulf has generally been attached to the labour law, so any worker category sitting outside that law is also sitting outside the reform.
Kafala reform status by country, with dates
Reform status differs by state, by instrument, and by year, so a country-level answer is the only useful kind. Qatar and Saudi Arabia made the largest formal changes in 2020 and 2021, removing or narrowing the consent requirement for changing employers. Oman removed the No Objection Certificate requirement from the start of 2021. Bahrain went earliest, launching a self-sponsored permit in 2017, then folded it into a later registration programme. The UAE rewrote its private-sector labour law in 2021. Kuwait has moved least, and in 2025 added a departure approval requirement that Human Rights Watch says reinforces sponsorship rather than loosening it. In each case the reform was attached to the labour law, which left every worker category sitting outside that law roughly where it was before. The table below gives each state's headline reform, the date it took effect, and the documented limit on it. Every row links to the source it rests on.
| Country | Headline reform and date | Documented limit |
|---|---|---|
| Qatar | Law No. 19 of 2020, dated 8 September 2020, removed the No Objection Certificate requirement for changing employers. Law No. 17 of 2020 set a non-discriminatory minimum wage of QAR 1,000 basic plus food and housing allowances (ILO). | Human Rights Watch reports workers are still asked in practice for a signed letter from the original employer approving the resignation, and that wage abuses persist. |
| Saudi Arabia | Labor Reform Initiative in force from 14 March 2021: job transfer, exit and re-entry visas, and final exit visas move to the Absher and Qiwa portals (Ministry of Human Resources and Social Development). | Applies only to workers covered by the labour law. Domestic workers and farm workers are excluded, and employer consent is still needed to change jobs inside the first contract year (Human Rights Watch, 25 March 2021). |
| United Arab Emirates | Federal Decree-Law No. 33 of 2021 replaced the 1980 labour law and took effect on 2 February 2022, covering contracts, dispute resolution, and a ban on forced labour and discrimination (UAE Government). | The work permit and residence permit remain employer-linked, and Human Rights Watch found enforcement gaps alongside provisions it judged inconsistent with international labour standards (Human Rights Watch, 3 December 2023). |
| Oman | Royal Oman Police decision removed the No Objection Certificate requirement from 1 January 2021, allowing an expatriate worker who has completed their contract to move employer and transfer the residence visa (Oman Observer, 27 April 2021). | The worker must show proof that the previous contract expired or was terminated, and the receiving employer needs a valid recruitment licence, so the transfer is conditional rather than free. |
| Bahrain | Flexible Work Permit launched 24 July 2017, a two-year permit that lets an eligible worker act as their own sponsor and work for more than one employer (Labour Market Regulatory Authority). | The LMRA later moved flexi permit holders into a Labour Registration Program, setting 4 March 2023 as the deadline to regularise status before enforcement action (LMRA, 7 February 2023). |
| Kuwait | No comparable dismantling reform. From July 2025 private-sector migrant workers must submit a departure request through an employer-facing government portal before leaving the country (Human Rights Watch, 15 June 2025). | Human Rights Watch says the requirement reinforces kafala, enables employers to trap workers in abusive situations, and works as a tool for retaliation. |
Read the table as a snapshot with dates attached, not as a permanent state of affairs. Instruments in this area change by ministerial decision as often as by statute, so confirm the current position with the destination ministry before a placement.
What the reforms did not change
The legislative changes above are genuine, and the gap between text and practice is equally genuine. The ILO's own assessment, published 23 July 2023, is that more is needed on both the legislative and the implementation side, and it singles out the absconding regime for removal, because that rule lets an employer declare a worker to have fled and automatically end their residency and work permit. Amnesty International's May 2025 research on Saudi Arabia states that kafala binds the country's roughly 13 million migrant workers to their employers and directly enables forced labour, and that without an effective monitoring, inspection and enforcement regime, regulations are often meaningless in practice. On 29 April 2026 UN human rights experts publicly urged Saudi Arabia to effectively abolish the system, citing wage theft, document retention, and recruitment fee abuses.
Four exclusions do most of the work in explaining the gap:
- Domestic workers. In Saudi Arabia and several other states they sit outside the labour law, so labour-law reforms do not reach them. Amnesty reports around 4 million domestic workers in Saudi Arabia, most still needing employer permission to change jobs or leave.
- Consent inside the first year. Saudi mobility applies after a year of the contract or at its expiry, so a worker in month three is in the old position.
- Exit control. Kuwait's 2025 departure approval requirement moved in the opposite direction to the regional trend.
- Enforcement capacity. Human Rights Watch has reported weak labour inspection and reduced penalties for offences such as passport confiscation.
How kafala differs from work visa sponsorship elsewhere
Employer-tied work authorisation is not unique to the Gulf. A US employment-based visa is petitioned for by a named employer, and losing the job starts a clock on the worker's status, which is covered in our guide to work visas and sponsorship. What distinguishes kafala is the breadth of the sponsor's authority and the number of workers who fall outside labour law protection entirely. Under kafala the sponsor has historically controlled entry, residency, job mobility, and exit as a single bundle, and the state has treated the sponsor as the responsible party for the worker's presence. The choice of employment model matters here too. Where a third party becomes the legal employer, as in the arrangements compared in our EOR and PEO breakdown, the sponsorship obligation moves with the employer of record and does not disappear.
| Question | Kafala, as historically operated | Employer-sponsored work visa elsewhere |
|---|---|---|
| Who holds the permit? | The named sponsor, who is also legally answerable to the state for the worker. | The petitioning employer, with the worker holding the status directly. |
| Can the worker change employer? | Historically only with sponsor consent. Now varies by country, contract stage, and worker category. | Usually yes, through a transfer or new petition, without the old employer's permission. |
| Can the worker leave the country? | Exit permission has been a live constraint, and Kuwait reintroduced a departure approval in July 2025. | Departure is not conditioned on employer approval. |
| Who is excluded? | Domestic workers and, in some states, agricultural workers sit outside the labour law and its reforms. | Coverage varies by visa category, but labour law generally applies to all employees. |
What Indian staffing and IT services firms should check before a Gulf placement
India regulates the outbound side of this pipeline under its own law, and that obligation sits with the sending firm rather than the Gulf client. The Emigration Act, 1983 provides that no Indian citizen shall emigrate for employment without emigration clearance from the Protector of Emigrants, and the Ministry of External Affairs applies that requirement to holders of Emigration Check Required passports travelling to a notified list of countries. All six GCC states appear on that list. The MEA also tells workers to verify a recruiting agent's original registration certificate from the Protector General of Emigrants and warns that sub-agents are not permitted under the Act. Separately, the ILO's fair recruitment principles hold that recruitment fees and related costs should never be charged to the worker, directly or indirectly. A fee charged at any tier of the chain is where recruitment debt begins, and it is the tier below your own supplier that usually goes unaudited.
That gives a delivery head a short list of checks to run before signing a placement:
- Confirm the named sponsor. Establish in writing which entity holds the work permit and whether that entity can lawfully deploy the worker at the client site.
- Check passport status and clearance route. Determine whether the worker holds an ECR or non-ECR passport and which emigration clearance or registration step applies.
- Verify the recruiting agent. Ask for the registration certificate issued by the Protector General of Emigrants and check it is current.
- Apply the employer-pays principle. Audit the chain so no fee, deposit, or cost recovery lands on the worker at any tier.
- Read the mobility and exit clauses. Establish what happens if the project ends early, if the client changes, or if the worker needs to travel home.
- Confirm the grievance route. Identify the labour authority in the destination state and the escalation path, before you need it.
None of this is a substitute for advice on the specific placement. This article is general information, not legal advice, and cross-border deployments should be confirmed with employment counsel qualified in the destination jurisdiction and with the relevant labour ministry.
Where Fabric fits, and where it does not
Fabric has nothing to do with kafala compliance. It does not advise on sponsorship, permits, emigration clearance, or labour law in any jurisdiction, and none of the checks in the previous section are things a hiring platform can do for you.
The honest connection is narrower. Firms that hire across borders still have to run a first round on candidates they cannot meet, often at volume and across time zones. Fabric is an AI interview platform that screens resumes, filters on eligibility parameters such as budget, location, and years of experience, and runs an AI-led Round 1 interview, with role-specific formats including pair programming for technical roles. Its cheating detection is designed to flag AI-assisted answers during an interview and surface them to your recruiter. It is a signal for your team to weigh, not an automatic reject.
For IT services and staffing firms, the value is submission quality: a shortlist where technical depth has been checked before a profile goes to the client, in a market where each account gives you a limited number of shots.
This article is for informational purposes only. Fabric's Interview Engine screens, scores, and records Round 1 interviews; it does not make the final hiring decision. The recruiter or hiring panel using Fabric remains responsible for all hiring decisions.
FAQ
What are the origins of the kafala system?
Kafala grew out of Gulf states' need to import large numbers of foreign workers quickly while keeping control of residency in private hands, so the state delegated responsibility for each worker to a named local sponsor. The ILO's position is that sponsorship systems of this kind are incompatible with core ILO Conventions on forced labour and discrimination that most Arab States have ratified.
Who are the workers under the kafala system?
They are migrant workers, mostly from South Asia, Southeast Asia and East Africa, working in construction, hospitality, security, logistics, domestic work and, increasingly, professional and technical roles. Amnesty International puts the migrant workforce in Saudi Arabia alone at around 13 million people, roughly 4 million of them domestic workers.
What risks do workers face?
Human Rights Watch and Amnesty International have documented wage theft, passport confiscation, recruitment debt, restricted movement, and conditions amounting to forced labour across Gulf states. Risk is highest for domestic workers, who are excluded from the labour law in several countries and therefore from the reforms attached to it.
What are the prospects for reform?
Legislative reform has continued since 2017 and is unlikely to stop, but the ILO says more is needed on both the legislative and the implementation side, and singles out the absconding regime for removal. UN experts asked Saudi Arabia to effectively abolish kafala on 29 April 2026, which indicates the direction of pressure rather than a settled outcome.
How has the rest of the world responded?
The ILO has run technical cooperation programmes in the region and published country briefs mapping each sponsorship regime, while UN human rights experts have issued direct public calls for abolition. Labour-sending states, India among them, regulate the outbound side through their own emigration law rather than through the destination country's system.
Do any other parts of the world use such a system?
Employer-tied work authorisation exists well beyond the Gulf, including in the United States, where an employment-based visa is petitioned for by a specific employer. The distinguishing features of kafala are that the sponsor has historically also controlled the worker's residency, exit and ability to change jobs, and that entire worker categories sit outside labour law protection.