Doing Business in Saudi Arabia
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Expats anticipating doing business in Saudi Arabia should prepare themselves for a unique experience. The Saudi corporate world is perhaps the most unfamiliar of any of the Gulf countries for most Western expats. New arrivals are going to have to remain flexible and learn new skills in order to make a real success of their time in the country.
Saudi Arabia was placed 92nd out of 190 countries in The World Bank's Ease of Doing Business Survey for 2019. The country ranked particularly highly in protecting minority investors (7th) and dealing with construction permits (36th). The Kingdom didn't fare as well in categories such as resolving insolvency (168th) and trading across borders (158th).
The official language of Saudi Arabia is Arabic. However, English is widely spoken and understood in the business world.
Hours of business
Saudis generally work from Sunday to Thursday with Friday and Saturday being weekend days. Business typically operate from 8am to 12pm, and then 4pm to 8pm.
Business attire in Saudi Arabia is strictly smart and conservative. Men typically wear suits and ties for business meetings, despite the heat. Women should also wear business suits that cover as much skin as possible. Women should have their head and shoulders covered. Skirts should preferably be ankle-length. It is also advisable for women to carry a headscarf.
It is not advisable for men to wear traditional Saudi costumes. This may seem bizarre or even offensive to locals.
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. Alcohol, knives or anything made from pork products should be avoided. Gifts aren't to be opened in the presence of those that give them.
In recent years, the Saudi Arabian government has started taking steps to increase the percentage of women in the workplace. However, women in Saudi Arabia still play a very small role in public life, and even less so in the corporate world. Female expats looking to do business in Saudi Arabia are warned that, over and above potential difficulties in getting working visas, they are likely to be seen as inferiors in the business world in Saudi Arabia. This may make it hard to forge the kind of connections that are essential to successful business practice in the region.
Business culture in Saudi Arabia
Importance of Islam
Saudi society is underpinned by a fervent belief in the tenets of Islam. Expats, therefore, need to familiarise themselves with the basic guidelines for how to conduct themselves 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 convictions from their professional lives, in Saudi Arabia the presence of Islam is constant and all-pervasive.
The business culture of Saudi Arabia is prototypically Arabic. Great emphasis is placed on personal relationships between 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.
Establishing personal connections
Expats will also have to remain patient during their first business meetings with new Saudi partners. A significant chunk of time will be devoted to getting to know each other before any actual business is conducted. The forging of long-term, personal business relationships in Saudi Arabia is best considered an investment.
The management style that predominates Saudi Arabia is paternalistic and strictly hierarchical. Decisions are made at the top level and clear, direct instructions are then filtered down.
Business etiquette in Saudi Arabia reflects an intimate relationship between spiritual, personal and professional life. When greeting new associates, handshakes are common between men. To shows the necessary respect, expats should start with the most senior person present. Physical contact between unrelated men and women in public is frowned upon.
Eye contact is also extremely important in Saudi Arabia and is often considered an indicator of sincerity. However, women should avoid direct eye contact with men they are unfamiliar with.
Attitude to foreigners in Saudi Arabia
There is a clear and massive gulf between fundamentalist Islamic culture and modern Western culture. However, so long as expats conduct themselves appropriately and respect the beliefs and traditions of their hosts, they will be treated warmly and with true hospitality while in Saudi Arabia.
Dos and don'ts of doing business in Saudi Arabia
Do remain respectful and observant of Islamic culture and traditions at all times
Do look to cement long-term, personal relationships with Saudi business associates
Do make an effort to engage with the culture – learn some Arabic words and learn about the religion
Don't avoid eye contact with Saudi colleagues when speaking to them
Don't forget that in Saudi Arabia, the line between spiritual, professional and private life is blurry – try to remain sensitive of this in all professional capacities