More than 200,000 private sector companies in Saudi Arabia which failed to employ the required quota of local workers have closed down, said a report.

A total of 1.8 million companies remain in the Red Zone of the country's Nitaqat program, a Saudization scheme introduced by the Saudi Ministry of Labour, reported the Arab News, citing official data.

The firms are classified as micro and small enterprises, which are required to employ at least one Saudi national. A total of 180 large companies remain in the Red and Yellow zones for not having the required quota of Saudi workers, it added.

According to the ministry, 58.6 per cent of these firms are classified as micro and small enterprises, which are required to employ at least a Saudi national. About 180 companies remain in the Red and Yellow zones for not having the required quota of Saudi workers.

The nationalization scheme applies to 255,833 companies, which have 10 or more employees, whereas small companies with less than 10 employees, known to be in the "white" zone, are exempt, but are required to employ at least one Saudi national.