Doing Business in KSA: Understanding the Ethics and Norms

Saudi Arabia, previously known only as an oil-rich economy, has now opened its doors to entrepreneurs, foreign investors, and expats looking for work. For decades, millions of expats fly into the Kingdom for job opportunities, however with megaprojects under Vision 2030 on the way – the numbers are expected to rise largely. This makes the country a perfect hotspot for business setup. For anyone looking to do business in KSA, there are a few things to be mindful of, especially because of the Islamic culture that heavily influences the government’s policies. 

This article will discuss the corporate ethics and business culture of conducting business setup in Saudi Arabia and simple things that any expat or foreign employee should be aware of. 

Corporate Ethics:

  • Greetings

In Saudi Arabia, a handshake is the traditional first-contact greeting for men. If you are aware of the hierarchy ahead of time, shake hands with everyone in the room commencing with the one with the most senior.

Wait for a woman to extend her hand before extending your own while you are introducing yourself. Keep your hand at your side if she doesn’t. 

As a gesture of courtesy and respect, Saudi males may embrace or kiss each other on the cheek, nose, or forehead. The same is not expected of foreign males, though.

  • Time

While businesslike, meetings in Saudi Arabia typically feature flexibility and friendly interactions. Meetings don’t have an agenda and don’t mind if their scheduled appointment begins late or is canceled at the last minute. 

However, it’s best if you speak to the company’s HR to know if your company has a different work ethic. 

  • Small-talk

Spend some time having casual conversations on unrelated topics. To establish a long-lasting work relationship, it is crucial to develop a positive rapport with your colleagues and superiors.

  • Attire

In the Kingdom, it’s vital to always present yourself well. Formal dress is required for offices and meetings. For expats, this entails wearing a suit and tie.  All women are required to wear an abaya (a black cloak), while foreign ladies are exempt from wearing a head scarf, but should consider covering as much skin as possible. 

  • Cultural norms 

Islam is the center stone of Saudi Arabian culture, it influences everything from day-to-day activities to political decisions. As an expat, especially if you are a non-Muslim, it is crucial to be respectful of Islam and the culture at all times. This is vital to remember whether you are an employee or you have a business setup in Saudi Arabia.

Business in KSA

Business Culture: 

  • Decision-making

In Saudi Arabia, a small group of senior executives who sit at the top of the chain control all key decisions. Line managers may have a say in planning, implementation, and budgeting, but only a small group of people are normally involved in making strategic decisions.

  • Hierarchy 

The local culture places a high value on hierarchy. An expat should, for instance, greet the person with the most seniority first while greeting coworkers. The use of “titles” (such as Doctor, Sheikh, etc.) is also widespread. The management structure is also hierarchical, with top-level decisions generally being carried out before being communicated to the rest of the personnel.

  • Networking 

Opportunities for business networking are expanding as Saudi Arabia shifts toward a more commercial culture. Indeed, networking is a recognized aspect of contemporary business culture in the Kingdom, from invitation-only embassy events to conferences and fairs, as well as contacts with trade delegations.

Associations for professionals in the business are also excellent ways to meet people. In Saudi Arabia, online networking is also very popular, with LinkedIn being the most popular network.

  • Communication

In Saudi culture, seeming impolite, offending, or rude is risky.  As a result, you will typically encounter an indirect, friendly, and friendly communication style. To effectively do business in KSA, ensure that you have the right tone and words to use, especially in front of seniors. 

Saudis frequently say “yes” to requests and rarely answer “no,” especially when interacting with foreigners.

It is typical, particularly among close friends or coworkers, to witness very localized disputes.

With KSA moving to diversify its economy and opening business avenues for foreigners, it’s likely many entrepreneurs and even big businesses will expand to the Kingdom. Thus, it’s essential to know how to effectively do the business setup in Saudi Arabia.