‘5×1’ licensing decision still on hold as PAM flags procedural barriers; collective punishment

The decision allowing majority owners of subsidiary companies or branches — those holding more than 50 percent ownership — to operate from a single headquarters with one automated number for up to five licenses, known as the “5×1” system, has yet to be implemented.

The delay stems from procedural concerns raised by the Public Authority for Manpower, which has expressed reservations about its ability to enforce the decision under current regulations.

PAM officials highlighted difficulties in applying penalties under the new framework. If one partner commits a violation that requires closure, all licenses under the unified automated number would be penalized, creating what they describe as an unfair collective punishment.

Another complication involves assessing labor requirements when multiple licenses are tied to the same location, making it difficult to track violations separately.

In response, the Ministry of Commerce and Industry has suggested several measures, including warning applicants beforehand about the risks of collective closure and requiring them to explicitly accept the Authority’s regulations before approval.

The Ministry also argued that since the system targets majority owners, they should bear responsibility for potential penalties, even if violations come from minority partners.

Despite the reservations, officials across regulatory bodies agree the “5×1” decision could ease costs for business owners — especially SMEs — by reducing the need for multiple offices.

The move is part of a broader Ministry strategy to simplify licensing, stimulate investment, and cut operational burdens. Work is ongoing to align labor force regulations with the decision, and authorities suggest a procedural compromise may soon be reached.

If successful, the initiative could expand to include more activities and owners with less than 50 percent stake under clear criteria.

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