They will have to pay a 20% tax.

Jojo Puthuparampil is a business news writer for Inc. Arabia.

The Saudi Arabian government is likely to give expatriates an opportunity to opt for self-employment.

It is considering a proposal which would allow foreigners to register as self-employed by paying an estimated tax rate of 20% annually.

This would mean that foreigners would no longer need Saudi nationals to sponsor them.

Currently, Saudi nationals register businesses under their names and the expatriates run the business and pay a percentage to the nationals.

As a result, funds that would have gone to the state are being diverted to individuals. According to some, the commercial cover-up phenomenon has cost the national economy billions of riyals.

Foreigners dominate commercial activities and commercial cover-ups account for 80% of the Saudi economy which is equivalent to SAR300 billion, according to economist Ahmad Al Jubeir.

The phenomenon has also been one of the key reasons for the prevailing unemployment in the country, he opined.

Commercial cover-ups represented more than 20% of GDP in 2014, Al Jubeir said.

Around 30% of the expatriate labor force is working for themselves under commercial cover-ups, according to him.

Saudi Arabian authorities have been trying to tackle ways to reform the labor market amid an oil price slump that has forced the country to implement austerity measures.

In December, media reports said that Saudi government is likely to include a monthly fee for expat workers in the country.