The Kingdom of Saudi Arabia is the largest economy in the Middle East and the 18th largest economy in the world. It is considered an energy super-power, given that it is home to the second largest reserves of petroleum and fifth largest natural gas reserves. Although the command economy is energy-based, the country also generates significant income from agriculture, gold mining and tourism. Roughly two million annual hajj pilgrims create a large number of temporary jobs in Hajj and Umrah organisations and services. Over 5.7 million Saudi visas have been issued so far in 2019 for the pilgrimage alone.
According to the World Bank ratings for 2018, Saudi Arabia ranks 92 among 190 economies in terms of the ease of doing business. In recent years, the government has taken significant steps to encourage new businesses and promote local talent. Programmes like In-Kingdom Total Value Add (IKTVA), Vision 2030 and National Transformation Program 2020 have been set up for creating a pro-business environment in the nation.
For anyone interested in doing business in the kingdom, here are 5 basic things you should know.
1. Know the Work Week
In Saudi Arabia, businesses are open from Saturday to Wednesday. Friday is a holy day for Islam and is reserved for religious practices. Make sure to never ask for appointments or conduct business dealings on Friday, as a mark of respect for the nation’s religion and culture. Some companies remain open on Thursdays, but it is uncommon. Also, during the holy month of Ramadan, Muslims fast through the sunlight hours and are supposed to work only 6 hours a day.
2. Dress Appropriately
The country is steeped in religious beliefs and customs. It is essential for any prospective businessman or woman to respect these cultural traditions. In fact, this factor will be much emphasised when you are in the process of getting a Saudi visa.
Firstly, dress conservatively and limit the amount of skin exposure. A typical businessman in the country wears full length dress pants and long-sleeves. Women wear the abaya, a long black cloak that covers them entirely from head to toe. Women also wear head pieces in public. By dressing traditionally, you will be able to strike a chord with the local businesses.
3. Making Small Talk before a Meeting
Unlike the west, people conversing with the opposite gender in public is frowned upon in Saudi Arabia. So, stick to greeting people of the same gender. Men and women are usually segregated at workplaces. In any case, wait for your counterpart to greet you.
Next, Saudi businessmen take a leisurely approach to conducting business meetings. Patience is essential. Try to start a friendly conversation, rather than getting straight to the point. Ask them about their family and attempt to build a rapport. However, do not broach topics like Israel, politics, death, and illness.
4. Understand the Business Style of the Saudis
Apart from taking time to build personal relationships, you should also know that Saudi businessmen are very particular about their business hours. They do not appreciate impromptu scheduling or tardiness. Respect their prayer times. Most Islamic nations have local mosques that call Muslims to prayers. And, no matter who the person is, they will halt for 15-20 minutes to pray when the call is sounded.
The Saudis are world-renowned for their generous hospitality and delectable cuisine. At the same time, they do not appreciate a refusal to invitations. Of course, a valid reason or an emergency will always be understood. But, do try to let them know beforehand.
Men in Saudi Arabia also are more affectionate towards friends than in the west. Physical contact between male friends is not disapproved of. If a Saudi businessman holds your hand, consider it a gesture of friendship and trust. Religion has a profound impact on their social structure, behaviour and even politics. So, try to understand the basic principles of Islam. This will help with business dealings too.
In negotiations, expect a certain degree of wild gesticulations, insistent persuasions and often personalised appeals. Those who have received higher education abroad will show regard for conceptual and analytical thinking, but a vast majority of the people in the business circles rely on immediate feelings over empirical evidence.
5. Women Doing Business in Saudi Arabia
For female business travellers, getting a Saudi visa could be a tough task. The limitations placed on accepted behaviour is highly regulated. In the country, men and women do not enjoy the same rights and public life is the primary domain of Saudi men.
If you are a female business owner or employee, the first thing to do is to dress conservatively. You might be accepted without a veil but keep yourself covered. Next, have a male chaperone (colleague or family member).
Although a highly conservative society, the women have been allowed to vote, work and drive in a series of cautious social reforms in recent years. But they still remain segregated at workplaces and enjoy minimal benefits.
While the business environment is improving due to various government initiatives, to be successful in Saudi Arabia, it is important to know about the local customs, etiquette, and expectations. This can go a long way in easing the process of starting a business in the kingdom.