Doing business in Saudi Arabia

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Saudi Arabia is going through many rapid political, economic and social changes. Economic changes are driven by the need to diversify from the heavy reliance on oil revenues. Saudi Vision 2030, announced in 2016, is a grand programme designed to move the Kingdom toward economic and social reform. It is also linked strongly to Saudisation, designed to reduce the reliance on expatriate labour, both skilled and less skilled.

Much of the country would be nearly unrecognisable to visitors who have been away from the Kingdom even for only a few years. However, it remains deeply conservative and remains significantly more so than its neighbours. It’s important for people travelling to Saudi Arabia to understand the laws and obey them. Although gender segregation is fading away in many public venues such as restaurants and shopping mall food courts, there are other locations where this practice remains in place, particularly in more conservative areas. If you make a mistake, simply move to the correct place. There is strict segregation of the sexes in hotel swimming pools/gyms, although more generous accommodation is being made for women than in the past. Alcohol consumption is forbidden and can attract fines, prison sentences, loss of your visa to stay in the Kingdom, and deportation.

Business culture in Saudi Arabia

During the month of Ramadan, residents and visitors must avoid eating, drinking or smoking in public between dawn and sunset, regardless of whether you are Muslim or not. Restaurants will be closed as well. Room service remains available at your hotel. It is forbidden to take photos of an airport, military installation and other sensitive buildings. Care should be taken not to photograph people without their consent, although do not be surprised if you see Saudis taking selfies, including women. Respect is the operative word. Public displays of affections remain taboo.  Homosexual behaviour and adultery in its broadest definition are illegal and could carry the death penalty.

The working week is Sunday to Thursday.

Throughout the Arab world, the respect a person enjoys depends on their status, rank and age. Authority is related to age and gender which is associated with experience and wisdom. The head of the family or clan is normally the oldest male.

Showing status is important so people will take you seriously. Carefully select your hotel and transportation and use the services of a porter, for example, to avoid being viewed as a low-ranking employee.

Building lasting and trusting personal relationships is very important to most Saudis, who expect to establish strong bonds prior to closing any deals. This requires a long-term perspective and commitment and can be a slow process.  Changing a key contact may require the relationship-building process to start again or bring negotiations to a halt.  Admired personal traits include flexibility, patience and sociability.

Traditional business is usually focused around a family unit with key employees coming from the extended family. Nepotism is a way of life. Businesses run on strongly hierarchical lines with the majority of power being held at the top by the senior, older family members. You must take time to build relationships with everyone you meet. A seemingly junior employee may prove to be a favoured relative of a senior manager and therefore of potential help.

Do be aware that an increasing number of businesses in Saudi Arabia are local or regional offices of multinational organisations, often from the West, Indian Subcontinent or Dubai. These businesses typically exhibit cultural and operational practices that are a blend of their own ways of doing business along with some local Saudi practices.  Businesses of all definitions are modernising in Saudi Arabia, driven by technology, improving education and the encouragement of exposure to effective global business practices. However, many of these practices can be new to many Saudi organisations and may take time to be fully accepted and implemented.

Management approach is traditionally instructional. Subordinates view it as the boss' role to take decisions and to convey those decisions down the chain for implementation. Consensus-style discussions may be held but the final decision is taken by the leader. It is important that any instructions you give are clear, unambiguous and complete. Decision-making can be slow. Decisions require several layers of approval and many people are consulted within the organisation. Try to win the support of all senior managers.

Both men and women should dress formally in Saudi Arabia unless there is a specific reason for an exception, such as a uniform policy or working outdoors in the summer. Men should wear a formal business suit that would not look out of place in a banking or law environment in the West. Women must wear an ‘abaya’, the long black robe that covers her body from the shoulders to her feet. Women are no longer wearing headscarves in most environments, although it is important to have one to hand in case she is in a conservative environment. Business abayas should be of good quality and of modest design, although they can be fashionably modest in less conservative environments. It is also advised that women wear formal, conservative business attire under their abaya to avoid embarrassment as there are times where she may be invited to remove it in some private settings. Accessories, jewellery and grooming are all judged for men and women.

Meetings are changeable so it’s best to be flexible in your approach to scheduling meetings. As all things emanate from the will of Allah, a degree of fatalism and acceptance are inherent in the Saudi character. Things will or will not happen according to the will of God and not because of the actions of man. The meeting will take place tomorrow at ten o'clock - God willing.

The Saudis will want to know whom they are meeting (titles, positions, responsibilities, etc) in advance. Meetings may be cancelled or postponed with little notice as schedules are loose and can be reprioritised at the last minute. Avoid being late yourself.  After the introductions, offer your business card to everyone present. Cards should be in English on one side and in Arabic on the reverse. Show qualifications and your professional title. Present your card with your right hand with the Arabic side facing up.

Early meetings will include lots of small talk and personal questions. Frequent meeting interruptions are normal and do not signal a lack of interest. Your presentation should be short and concise, allowing lots of time for questions and clarifications.

The use of correct titles and salutations can be a particularly sensitive matter. Special care should be taken in all formal written communication. As a general rule, it is wise to err on the side of formality.

Members of ruling families are addressed as His/Her/Your Highness. Ministers and ambassadors have the standard international designation of 'Excellency'. The titles Doctor, Sheikh [chief], Mohandas [engineer] and Ustadh [professor] are in both the literal and honorific senses.  'Sheikh' should always be used the same as a knighthood in English – applied only to the first name, never the surname.

Communication can be indirect. Saudis engage in flowery language, exaggerations and rhetoric and open disagreement and confrontation is rare.  You will not usually hear a direct ‘no’.  When a Saudi says ‘yes’, they mean ‘possibly’.  ‘We must think about it’ usually means ‘no’ or at least ‘not now’. Use a similar indirect approach when dealing with Saudis so that they do not think you are too pushy or rude.

Body language is important in Arab culture. Shake hands with the right hand only and at the beginning and end of any meetings.  Shake hands longer, but less firmly than in the West. Remember to always use the right hand for passing objects, touching food or touching other people. Feet should remain on the ground when sitting and should never be crossed so that the bottom of your shoe is exposed to others.

Finally, gift giving is fading into the past in general. However, if giving or receiving a gift, it is likely that the gift will not be opened in front of the giver.