Tuesday, May 19, 2009

How to do business in Saudi Arabia

Doing business in Saudi Arabia is no more onerous than anywhere else in the Middle East. Saudis are courteous and hospitable, but there are a few points of etiquette you should bear in mind. On meeting, swap business cards with your right hand and if a woman is present wait for her to offer her hand to shake first. Avoid pointing the soles of your feet at your hosts as this is considered disrespectful.
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Never dive straight into business at a meeting. Instead, enjoy some small talk over a cup of coffee – after a maximum of three cups gently rock the cup from side to side to indicate you have had enough and are ready to move on to business. Never lose your temper.

Clients are a mix of big contractors delivering government-funded projects and private developers. Consultants can work directly for government departments. Building up long-term relationships is important in Saudi Arabia. Lump-sum contracts are common and there is a dedicated form of contract for government projects.

When tendering for work, expect to provide 10% of the value as a bond. This will be returned whether you win or lose the contract. Successful bidders may be asked for a 5% performance bond which is returned at the end of the project. Negotiate your way out of paying this if possible.

According to Phil Dalglish, Buro Happold’s boss in the country, the Saudis are no better or worse than anywhere else when it comes to payment. He is concerned that newcomers risk getting burned. “With all the new consultants coming out here, I do worry that there will be a high level of abuse as they will pick the wrong clients who won’t pay them and lose their shirt,” he says.

Disputes are best avoided – although Saudi law recognises contracts, the problem is you may be faced with a five-year wait before it gets to court.

What it's like to live there

The question “What’s it like?” will be at the front of people’s minds when contemplating a move to Saudi Arabia. Well, for one thing, salaries are usually 10% to 30% higher than the UK. However, there is no doubt that life is much more restricted: alcohol is banned, women can’t drive and must wear the abaya – a long black cloak – and cover their heads in public. There are only 100,000 western expats in Saudi Arabia, so it’s a close-knit community. “You need to be the right sort of person to live here,” says Matthew Jordan, an assistant surveyor with property adviser DTZ. “It helps if you are sociable. I spend more time socialising with people through sport rather than meeting people in bars.”

The main problem is that there isn’t much to do. There are no cinemas, bars or theatres, but there is satellite television and the internet. Because of this, most westerners choose to live on compounds that are specifically for expats. Here they can mix with other westerners and women can socialise normally – outside the compounds women are forbidden from mingling with people who aren’t relatives.

Compounds are heavily defended against terrorist attack, and with good reason – in May 2003, 30 people were killed in Al-Qaeda bomb attacks on Western compounds. Expect bomb sweeps on entry and men with machine guns to be posted on the edge of barbed wire topped perimeter walls.

Inside, some of the better compounds resemble holiday camps – Bougainvillea-draped villas, large swimming pools, shops, restaurants, bowling alleys, tennis courts and even golf courses. On the other hand, some are grotty, and the long waiting lists means you may end up in one of the less impressive ones. The shortage of places also means they are expensive – on the best compounds, a three to four-bedroom villa costs £50,000 a year and a two-bedroom one £35,000. However, companies normally pay for accommodation and transport.

Compounds are usually located outside the city centres, but traffic is much lighter than Dubai, so commuting times are short. Unfortunately, the standard of driving is so bad that many women don’t mind not being able to drive. “If my wife was told she was able to drive tomorrow, she would be horrified,” says the British embassy’s Paul Williams.

There is some party life in Saudi Arabia. Embassies regularly host parties and serve alcohol, owing to their diplomatic immunity. “I’m at an embassy do seven weekends out of 10,” says Andy Isherwood, an associate with Rider Levett Bucknall. “In terms of a social life, it’s not as liquid as other places, but it’s still good.”

Home-brewed alcohol can be bought in illegal bars on some compounds, although there are harsh penalties for those who get caught. Instead, as Bahrain is only an hour’s flight away, Isherwood often goes there with friends for weekends.

Despite the restrictions, many speak positively about life in Saudi Arabia. Jordan is 25 and came over from fast-living Dubai. “If you talk to people in the UAE they will say Saudi is rubbish, as they haven’t experienced it,” he says. “I was surprised when I came here. I had prepared myself for the worst, but it was much better than I thought.”

1 comment:

Diane Gordon said...

Excuse me? The Saudi government lashes women for driving.
We do not need to do business with them. We need to take them down. And we will.