The Saudi Arabian work culture can demand adjustments from international companies expanding into the country. Having an economy traditionally based on oil, Saudi Arabia has been opening its doors to international investment, companies and expatriate employees for decades as it builds its global trading profile. The government’s Vision 2030 program encourages private enterprises, start-ups, and SMEs’ growth as it widens its economic horizons. From 2023, foreign companies will need a regional headquarters in Saudi Arabia to qualify for a license.
Saudi Arabia has already issued multiple licenses for multinationals to move their headquarters to the capital, Riyadh, including PepsiCo, Deloitte and Unilever, in a drive to rival the United Arab Emirates as the No. 1 business hub in the Middle East and West Asia. Most staff in the private sector are expatriates, which led to the government introducing in 2011 the ‘Saudization’ plan, or Nitaqat, to increase the number of locals on company payrolls. Companies must comply with quotas based on company size, business activities and the balance of employees between foreigners and Saudi Arabians.
Despite its growing profile in the world economy, Saudi Arabia’s business culture remains traditional and more conservative than most international companies. Adjustments must be made whichever country incomers arrive from. Expats must be prepared for ‘positive discrimination’ towards local employees, such as training, promotion, benefits, and entitlements above the statutory minimums.
Language: Meetings are generally conducted in English if different nationalities attend, but attendees may discuss delicate or technical points in Arabic.
Timekeeping: Meetings and office environments tend to be flexible. Meetings likely have no agenda. Don’t take it personally if the appointment starts late or is cancelled last minute. Saudi Arabians place little value on punctuality as a whole. Meetings often start late, and prayer times dictate schedules.
Meetings and Negotiations: Introductory small talk can soon be followed by hard bargaining with decision-making from the top, usually from a Saudi Arabian. Being ‘pushy’ will not work, with polite flexibility being the best option. Building trust and relationships are crucial, as in most countries in the region, so be prepared to spend time laying the foundations for the business relationship.
Greetings: A handshake is the standard first-contact greeting in Saudi Arabia for men. If you are greeting a woman, wait for her to extend her hand before offering yours. If she doesn’t, keep your hand by your side. Greet everyone in the room with a handshake, starting with the most senior person in the room and then by seniority if you know the hierarchy. Saudi Arabians and other Arab men may embrace and/or kiss on the cheek, nose, or forehead as a sign of deference and respect. However, expatriate men are not expected to do the same.
Business Cards: Exchange them using the right hand at the start of the meeting, with the Arabic side uppermost. Try to take note of any particular designations on your contact’s card (Shaikh, Doctor, or Engineer) and refer to the person with that title from time to time during the conversation.
Dress Code: Dress to impress! Suit and tie for male expatriates, and national dress (white thobe, red/white checked ghutra) for locals. All women must wear an abaya (black cloak), although foreign women need not cover their heads.
Out of Hours: Lunches and dinners or meetings for coffee in a hotel lounge are part of the “getting to know you” process and a helpful networking introduction for those trying to get ‘ their foot in the door’ for business opportunities.
Gifts: Gift-giving is not part of business etiquette in Saudi Arabia.
Taboos: Acceptable topics for discussion are families, business, art, culture, and sport. Avoid discussing local politics, religion, or the royal family. Never show the soles of your feet, and don’t openly argue with your host, especially in the presence of others. Don’t raise your voice; use only your right hand when eating.
For more information, download our free guide or get in touch with our consultants here