Saudi Arabia is an attractive market for many businesses. It is not surprising, considering that it is among the largest economies in the Middle East, has a population of more than 32 million, and GDP per capita approximately USD 21,000.
Doing business in Saudi Arabia is not without challenges, of course.
Lack of Cultural Awareness
Religion plays a central part in Saudi Arabia culture. It shapes the values of the people of Saudi Arabia, how they develop relationships, and how they interact with not just family and community but also business as well.
When you do business in Saudi Arabia, you must have strong cultural awareness. If you have strong cultural awareness, it will give your company a competitive advantage as you will have the ability to create benefits while keeping Saudi Arabia’s culture in mind.
Business Etiquette in Doing Business in Saudi Arabia
Besides cultural awareness, you should also know the business etiquette in the Kingdom. For example, communication by Saudis relies mostly on non-verbal languages, such as moments of silence (which indicates contemplation) and tone of voice, as well as body language.
Different Work Week
The Monday to Friday workweek is not the norm in Saudi Arabia. In the Kingdom, the workweek starts on Saturday and typically ends on Wednesday. Thursday and Friday are considered as the traditional days of rest.
The difference in the workweek can make scheduling more difficult. This is especially true when you attempt to integrate workers in other parts of the world and workers in Saudi Arabia.
Need for Different Branding
Even if you have existing branding in your country of origin, it is unlikely to resonate with an audience in the Kingdom. In other words, you can’t rely on existing branding. Oftentimes, creating a new branding that takes the values, customs, and religions of the Saudis into consideration is necessary.
Developing relationships requires time and trust. Before you develop a business relationship with people in Saudi Arabia, you must first develop a personal relationship. Without becoming acquainted with your business partners in Saudi Arabia, you are unlikely to be able to develop a solid business relationship.
One important thing to note is that hospitality is a large part of the culture. You can use it strategically to develop stronger personal as well as business relationships.
Strict Immigration Standards
Saudi Arabia has localization standards that affect its immigration standards. The government of Saudi Arabia has established strict quotas for hiring nationals that businesses must meet.
The problem is that it can be challenging for a business to find an adequate quantity of qualified nationals who are able to fulfill their needs.
Lack of Intellectual Property Rights
The enforcement of intellectual property rights in Saudi Arabia is lacking, particularly in the software, digital goods, and pharmaceutical industries. Counterfeiting is a problem as well. Although there have been improvements, these issues remain a challenge for a lot of foreign businesses.
Quoted from Saudi Competitive Intelligence, these are unique challenges that you will face when doing business in Saudi Arabia. Understanding the challenges and addressing them head-on may help you increase the likelihood of establishing a successful business in the Kingdom.