Doing business in Saudi Arabia
On the plus side, however – at least in regulatory terms – Saudi Arabia is an easy country to do business in, being placed 12th (out of 183 countries) in the World Bank's "Ease of Doing Business" rankings, and excelling in the fields of 'registering property' (where it is ranked first) and 'paying taxes' (10th).
Business culture in Saudi Arabia
It's vital to understand that Saudi society is underpinned by fervent belief in the tenets of Islam. It is crucial to familiarise yourself with the basic guidelines for how to conduct yourself appropriately within Islamic society, so as not to cause offence. Unlike in Western countries, where someone might be devoutly Christian in their personal lives, but happy to separate these convictions from their professional lives, in Saudi Arabia it is important for expats to understand that the presence of Islam is constant and all-pervasive.
While this fact may be potentially difficult for irreligious expats to conceive of, they need to understand that, as far as their Saudi business associates are concerned, nothing in life will transpire that hasn't been divinely ordained. Many frustrated expats have written this off as 'fatalism' – or perhaps, even passivity – but it is, really, just another world-view, and as a guest of the country, you should do your best to understand and respect it, at all times. The oft-quoted phrase, 'Insha'Allah' – 'If God wills it' – might very well become a mantra you find yourself adopting before too long.
The business culture of Saudi Arabia is prototypically Arabic, in that a great emphasis is placed on personal relationships between business associates – Saudi businessmen will always prefer to do business with people they are familiar with, and who they feel they can trust. For this reason, nepotism is a characteristic feature of the Saudi business world, and is viewed as both natural and advantageous.
You will also have to remain patient during your first business meetings with your new Saudi partners – a significant chunk of time will be devoted to 'getting to know each other', before any 'actual business' is conducted. Don't get impatient: the forging of long-term, personal business relationships in Saudi Arabia is certainly worth the time and energy.
The management style that predominates in Saudi Arabia is paternalistic and strictly hierarchical – decisions are made at the top level, and clear, direct instructions are then filtered down. To expect anything more egalitarian, would fly in the face of the established culture and traditions of the country.
Business etiquette in Saudi Arabia reflects the intimate relationship between spiritual, personal and professional life mentioned above. Don't be shy to resort to flattery – it will stand you in great stead to appear (or better yet, to be) enthusiastic about Arabic culture and business practices. When greeting new associates, handshakes are common between men: start with the most senior person present, and proceed anti-clockwise around the group. Physical contact with women in public is frowned upon. Eye contact is also extremely important in Saudi Arabia – you will be judged on your sincerity by your ability to hold someone's gaze.
In Saudi Arabia, business meetings will most likely be lengthy, and subject to numerous interruptions and personal digressions. At times, you might even be completely ignored, while the chair of the meeting engages someone else in a long, personal conversation. While this structure might obviously be frustrating to expats who are used to keeping 'on the clock', and tackling an 'agenda' at meetings, don't become frustrated – rather, endeavour to fit in. You will be judged on your conduct in meetings, so treat them as necessary parts of the relationship-building process.
Finally, don't be surprised to hear people raising their voices, and emphatically expressing their emotions during business meetings in Saudi Arabia – this is seen as a sign of passion and engagement, and the ability to communicate in this way is a highly valued personal attribute in the Gulf region.
There is no specific etiquette regarding the exchanging of business cards in Saudi Arabia – but if you use them, make sure your details are printed in Arabic on the reverse side of your card. Despite the heat, business dress in Saudi Arabia is strictly smart, formal and conservative. It is, in fact, one of the responsibilities of the Saudi Mutaween (religious police) to enforce modest dress – and suffice it to say, expats do not want to fall foul of this organisation.
Attitude to foreigners in Saudi Arabia
No one – not the Saudis themselves, nor expats who relocate to the Arabian Gulf – is under any illusions, that there exists a massive gulf between fundamentalist Islamic culture and modern Western culture. However, so long as you conduct yourself appropriately, and cultivate a genuine respect for the beliefs and traditions of your hosts, there is no reason why you won't be treated warmly and with true hospitality while in Saudi Arabia.
Registering a business in Saudi Arabia
- Complete all required forms and submit them to the Unified Office at the Ministry of Commerce in Riyadh
- Open a Saudi bank account
- Register with the Department of Zakat and Income Tax (DZIT; 'zakat' is a religious wealth tax), and obtain a certificate of 'commencement of business' and a file number
- Register your details and your employees' details online, with the General Organisation of Social Insurance (GOSI)
Doing business in Saudi Arabia: Fast facts
Business language: The official language of Saudi Arabia is Arabic, though English is widely spoken and widely understood in the business world
Hours of business: Generally, 8am to 12pm, and then 3pm to 6pm, from Saturday to Wednesday. Thursday and Friday are weekend days.
Dress: Strictly smart and conservative – especially for women
Gifts: It is not obligatory to exchange gifts when meeting Saudi business associates for the first time – though it might be appreciated. Gifts should be wrapped and of high quality – and whatever you do, don't give alcohol, knives, or anything made of pigskin. Gifts shouldn't be opened in the presence of those that give them to you.
Gender equality: Women in Saudi Arabia play a very small role in public life, and so – unsurprisingly – do not feature in the Saudi corporate world at all. Female expats looking to do business in Saudi Arabia are warned that – over and above potential difficulties in getting working visas and the like – they are likely to be seen as inferiors in the business world in Saudi Arabia, and probably will not be able to forge the kind of connections that are essential to successful business practice in the region
Do's and don'ts of doing business in Saudi Arabia
- DO - remain respectful and observant of Islamic culture and traditions
- DO - look to cement long-term, personal relationships with your Saudi business associates
- DO - make an effort to engage with the culture – learn some Arabic words, and educate yourself about the religion, as this will endear you to your new business partners immensely
- DO - work on maintaining eye-contact with your Saudi colleagues when speaking to them
- DON'T - become impatient, frustrated, or negative about Saudi culture – treat your time there as a once-in-a-lifetime opportunity to learn about a culture so vastly different from your own
- DON'T - forget that in Saudi Arabia, the line between spiritual, professional and private life is blurry – try to remain sensitive of this in your professional capacities