What is Kafala System? How it Works and List of Countries still following it

This month, Saudi Arabia announced that it had abolished the controversial 50-year-old Kafala labor sponsorship system. This system is viewed as "modern-day slavery" and gives employers, known as "kafeel," inhumane control over workers. This includes removing travel documents and determining when and if workers can change jobs or even leave the country.

Saudi Arabia, whose economy depends heavily on about 13 million foreign workers, has now formally abandoned this system for the first time in 50 years. However, what was the Kafala system exactly?

What is Kafala System?

The legislative framework known as the kafala system regulated migrant workers' employment and residency in all of the Gulf Cooperation Council's (GCC) member states. It first appeared in the 1950s, when oil-rich nations sought to avoid awarding citizenship or permanent residency while yet needing inexpensive labor to construct cities and infrastructure.

Why was Kafala System Created?

A foreign worker's legal standing under kafala was solely dependent on their employer, or kafeel. Their visa, their right to live in the nation, and frequently their freedom to change occupations or even leave the country were all within the sponsor's authority. Without the sponsor's consent, employees were unable to:

• Switch employers

• Exit the nation (many required a "exit visa").

• Seek legal action if mistreated.

The method was created to control labor through commercial sponsors and reduce state bureaucracy.

However, in reality, it led to a massive power imbalance. Workers had virtually limited options against employers that threatened deportation, withheld wages, or confiscated their passports.

Global View on Kafala System 

Over the years, Kafala emerged as one of the world's most criticized labor systems. The International Labour Organization (ILO) and human rights organizations have charged Gulf states with sponsoring human trafficking and forced labor.

Many workers stayed in violent or exploitative employment because they ran the possibility of being arrested or deported if they quit, especially in construction, domestic work, and agricultural. At worst, NGOs reported situations that resembled forced labor.

What will Happen Now?

In an effort to give workers their agency back, Saudi Arabia claims to be replacing kafala with a contract-based employment structure.  Important modifications consist of:

• Freedom to switch employment: Employees are free to switch jobs without obtaining permission from their existing employer.

• Freedom to leave: They are able to depart the nation without a sponsor's approval or an exit visa.

• Legal protections: Employees will have easier access to complaint procedures and labor courts.

The reforms will increase production, decrease exploitation, and enhance Saudi Arabia's standing with investors and the global community, according to officials.

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Countries that have fully Abolished Kafala System

List of Countries still following Kafala System

The landmark decision to outlaw kafala, which was made public in June 2025, is a component of Vision 2030, Crown Prince Mohammed bin Salman's comprehensive national strategy to modernize Saudi Arabia's image internationally, diversify the country's economy, and draw in foreign investment.

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