Saudi Arabia Country Profile

Country profile

The Kingdom of Saudi Arabia occupies the majority of the Arabian Peninsula. Sharing land borders with Jordan, Kuwait, Qatar, Iraq, Bahrain, Oman, Yemen and the United Arab Emirates, it also has extensive coastline on the Persian Gulf and the Red Sea. Much of the landscape is desert, and most of the population either lives in large cities or coastal towns. Since its unification into a single kingdom in 1932, the country has been governed by an absolute monarchy, with the current ruler King Abdullah ibn Abdilazīz taking power in 2005.

Culture

Saudi Arabia is an Islamic state and since 1992 the monarchy has been legally obliged to govern the country in accordance with Sharia law. Religious observance is part of everyday life for Saudis, who pray five times a day. Compared to most western countries and some of the more liberal nations of the Middle East, Saudi society can be restrictive, particularly for women who lack many freedoms allowed to their male counterparts. Men and women are also segregated in many situations. However, with a generous tax system making the financial rewards potentially lucrative, an increasing number of people have decided to accept these restrictions and work in Saudi Arabia.

Popular activities

As Saudi Arabia does not have bars or nightclubs, eating out is a great way to socialise and there is a thriving restaurant scene. Shopping is also a popular pastime – the Saudis are said to have perfected the art of the shopping mall, adding entertainment complexes such as ice rinks or sea life centres. Cinema is making something of a comeback after being banned for many years, although tickets remain limited and expensive. The national sport is football, with basketball also a popular spectator sport. The Red Sea coast is a hotspot for watersports, which Saudis and expats alike enjoy along with more traditional pursuits like horse racing, camel racing, falconry and hunting. Remember that access to spectator events may be restricted for women. However, expat community compounds often provide excellent leisure facilities which are accessible to all.

Food and drink

With its origins in the Bedouin nomadic tradition, Saudi Arabia’s cuisine centres on locally-sourced seasonal food. Similar in style to the cuisine of neighbouring Gulf states, the staple meats include chicken and lamb, while local produce like dates, beans, rice and yoghurt also feature heavily. International gastronomy is increasing in popularity, with large hotels usually offering the best choice. In line with Muslim culture, pork is not allowed and other meats must be halal. Alcohol is also illegal in Saudi Arabia. Although the police tend to turn a blind eye to alcohol consumption amongst expats in residential compounds, drinking is still illegal and being caught drunk outside the compound can land you in trouble.

Languages

Saudi Arabia’s official language is Arabic. The vast majority of Saudis speak either Hejazi Arabic or Nejdi Arabic, reflecting the pre-unification divisions of the country. Gulf Arabic, which is spoken in nearby countries like Bahrain, Qatar and the United Arab Emirates, is less common in Saudi Arabia. English is taught in schools and is widely used as an international business language.

Weather

The desert climate of Saudi Arabia is typically hot and dry with low humidity. However, as with most desert climates in the region, extremes of temperature are possible. Summers in the central regions of the country can often exceed 40°C (≈104°F). During the winter, temperatures can plummet and sometimes reach freezing point at night. Coastal areas are more temperate, with the cities like Jeddah usually remaining between 20°C (≈68°F) and 30°C (≈86°F) all year round. Rainfall is infrequent but can be heavy, and the south-west of the country sometimes experiences monsoons.

Safety and security

With the severe penalties issued under Sharia law, crime rates remain fairly low in Saudi Arabia, although people should be alert to the potential for petty crime. The fluid political situation in the Middle East does mean the country is at an elevated risk of terrorist activity, so visitors are encouraged to be vigilant, particularly in areas near the Yemeni border.

Although the strict regime serves as a deterrent against crime, the contrary side is that foreign nationals can unwittingly find themselves on the wrong side of the law. Alcohol and drugs are banned and drug smuggling carries the death penalty. Adultery and homosexual activity are both prohibited and can be harshly punished. Publicly practicing a religion other than Islam or failing to adhere to conservative dress codes are also illegal. The rights of suspected criminals are limited, so to avoid falling foul of the law, do your homework and try to live within local laws and customs.

System structure

Educational reform has been encouraged by the Saudi government as part of their Saudization employment initiative. Public education is free to all Saudi citizens through school (administered by the Ministry of Education) and university (the Ministry of Higher Education). The state school system is not usually accessible to foreign nationals, leading many parents to place their children at private international schools.

Academic year

The school year in Saudi Arabia typically runs from September through to June and consists of either two or three terms depending on the type of school. The day usually begins early and ends early, so working parents may need to make childcare arrangements for the afternoons.

Higher education

As the standards of education in Saudi schools have increased, so has the demand for university places and in response the Saudi Arabian government has opened a number of new establishments in recent years. The creation of private universities has also been encouraged to take some of the pressure off government universities. International students are welcome at Saudi universities, but it is fairly rare for the children of expats to continue into higher education in the country, particularly given that when boys turn 18 they are no longer covered by their father’s Iqama.

Funding

While Saudis are funded through university, foreign nationals must pay their way. The government does offer some scholarships to non-Saudis, although some of these offers may be subject to the student passing an Arabic exam.

Courses

Universities in Saudi Arabia typically offer associate degrees, bachelor’s degrees, master’s degrees and doctorates. Courses last for different lengths of time depending on the qualification level and subject. Undergraduate courses usually last four years, but some subjects may take up to six years. Although many institutions are segregated and there are some limitations on the types of course that women can take, enrolment rates for females are high and there are now some mixed universities.

Research

Research is a growing area for Saudi universities and is attracting considerable investment. For most information, consult the relevant university directly.

School education

State primary education begins at the age of 6 and lasts for six years, before three years of intermediate education and three years at secondary school. The curriculum is religious with teaching almost entirely conducted in Arabic and schools are segregated by gender. Exams are taken every two years to monitor progress. At secondary level, children have the option to go down a general educational route or to attend a more technical or vocational establishment. International schools tend to follow the structure of their home curriculum and offer qualifications to the same framework.

Preschool and childcare options

Preschool education is not compulsory in Saudi Arabia, but it is popular with Saudi families and expats alike and is increasingly viewed as an important period in a child’s development. Some employers provide dedicated pre-schools or crèches for the children of their employees as private enrolment can be very expensive. Alternatively, some families chose to hire a full-time nanny as labour rates are low and this can sometimes be the most cost-effective form of childcare.

Geographical variation

Typically the cost of living in Saudi Arabia is more expensive in the cities and suburbs. Although the country is reputed to have a low cost of living, prices for most goods are not really as low as they seem (with fuel being the notable exception). While locally-sourced produce is cheap, imported goods can be quite expensive. However, with low taxes, less entertainment facilities to spend money on and employers often subsidising housing or living costs, foreign nationals typically find their spending power goes up considerably compared to home.

Accommodation

The majority of foreigners in Saudi Arabia live in expat compounds, but this is not compulsory. Although foreign nationals are no longer banned from buying property in Saudi Arabia, it is not common practice as various permits are required and renting is usually a more cost-efficient option. Because most foreign workers are sponsored by their employer, many companies will arrange accommodation as part of the employment package, at least on a short-term basis. If not, a relocation allowance or the services of a relocation consultant may be offered instead. The transient nature of the expat population means some landlords will only deal with a local contact, so speak to your sponsor before searching for your own accommodation.

Rental deposit

A deposit of one month’s rent is usually requested as security in addition to the first monthly payment. However, some landlords will ask for advance payment of six months’ or even a year’s rent. In these situations, employers will normally cover the cost and enable you to pay monthly rent back to them.

Property tax

In some regions there is a local tax imposed on property. The baladiya covers the cost of local services like road maintenance and refuse collection. Some landlords include it in the rent while others leave it to the tenant, so make sure you ask ahead of signing a contract.

Utilities

In Saudi Arabia, utility costs are subsidised by the regional authorities through state-owned suppliers. Water is provided through the National Water Company and electricity through the Saudi Electricity Company. There is no mains gas supply, but bottled gas can be purchased fairly cheaply. Watch the electricity bill in summer though – air-conditioning costs can really add to your expenditure. The telephone, mobile phone, internet and TV service markets are more competitive, with state provider Saudi Telecom Company aiming to keep prices low and encourage investment.

TV licence

Saudi Arabia does not have a TV licensing system, but the state broadcaster only runs one English-language channel. However, paid and free-to-air services are available through companies like Nilesat and Arabsat, offering a greater choice of language services for expats.

Healthcare and medical costs

A good standard of healthcare is provided to Saudi citizens free of charge by the Ministry of Health. While expats are allowed to access the same healthcare facilities, they must pay for treatment which can be very expensive. As a result it is now compulsory for foreign nationals living in Saudi Arabia to have health insurance, but many employers will provide this as part of their proposition.

Shopping

Shopping choice is extensive in Saudi Arabia, with everything from the bargains of local souqs to practical supermarkets and high-end designer stores. Grocery shopping can be fairly cheap, as can white goods which have fairly low import duties. However, clothing can be expensive, and while they have a great choice, the top malls are not the place to go if you are looking for value for money.

VAT

In line with its low-tax policies, Saudi Arabia does not charge value-added tax (VAT) on goods and services.

Price guide

• Rent on 1-bedroom apartment in city centre – SAR1,536.92 (≈£261.47) per month
• Rent on 1-bedroom apartment outside city centre – SAR1,141.24 (≈£194.16) per month
• Price of apartment in city centre – SAR4,700.00 (≈£799.60) per square metre
• Price of apartment outside city centre – SAR3,608.33 (≈£613.88) per square metre
• Loaf of bread – SAR2.34 (≈£0.40)
• Milk (1 litre) – SAR4.05 (≈£0.69)
• Bottled water (1.5 litre) – SAR2.02 (≈£0.34)
• Draught beer (0.5 litre) – SAR3.00 (≈£0.51)
• Packet of cigarettes – SAR9.50 (≈£1.62)
• Petrol (1 litre) – SAR0.51 (≈£0.09)
• Cinema ticket – SAR100.00 (≈£17.01)

Source: www.numbeo.com (accessed November 2014)

Working hours

The typical working week in Saudi Arabia is five or six working days and hours range from 40 to a maximum of 48 per week, although this is reduced during Ramadan. With Friday being the Muslim day of rest, the weekend is officially Friday and Saturday, although some private or international businesses and schools take Thursday as a day off instead of Saturday. Working hours can vary immensely, but government offices and banks tend to open early and close early.

Holidays

Saudi labour law grants a minimum paid leave entitlement of 21 days a year, rising to 30 days a year after five years of service. However, many employers will offer discretionary increases on this minimum, particularly when trying to attract employees from overseas. After two years of service, employees are also entitled to additional paid leave to perform the Hajj pilgrimage.

Public holidays

Apart from Saudi National Day, which always falls on 23rd September, public holidays in Saudi Arabia are taken according to the major festivals of the Islamic calendar. Dates are announced by the government according to lunar observances, and public sector workers generally receive more leave for these festivals than those in the private sector, so ensure you check with your employer before making plans around them.

Public holiday dates 

2018

Eid al-Fitr: 15th – 21st June*

Saudi National Day: 23rd September

Eid al-Adha: 22nd-25th August*

*Dates may change according to the lunar month

Visas and eligibility to work

Although foreign workers are usually welcomed by businesses in Saudi Arabia, the Interior Ministry imposes strict controls on the movement of foreign nationals and the Saudization policy actively promotes the employment of Saudis over foreigners. All visitors to Saudi Arabia, even those just passing through on connecting flights, require a visa to enter and exit permits to leave. Fines are imposed for even minor infringements so documentation must be vigilantly kept up to date. In some circumstances, business visas or other forms of visa may be available. These are simpler to obtain for short visits to the country and can also cover multiple entries.

It is very rare for foreigners to be granted Saudi citizenship, so many expats work there on a long-term temporary basis. To work in Saudi Arabia, you need a work visa and a residence permit (Iqama). To obtain these, a sponsor (usually your employer) must apply for a work visa on your behalf, so it is vital to find work and agree a contract before moving. Your employer will send you a contract of employment and an authorisation number for you to take to the Saudi Embassy in your home country when you make your visa application. You will also be asked for several other documents including various forms of identification, medical certificates and security clearances. Once you have travelled to Saudi Arabia, your residence permit provides a form of photographic identification and must be carried at all times.

Tax

Saudi Arabia is a famously low-tax country, and foreign nationals can live and work in the country paying little or no tax to the government. There is no employment tax and no social security deductions from wages, but those who are self-employed may be taxed on their income. Foreign nationals working in the country should always check the tax relationship between Saudi Arabia and their home country as some may require you to pay tax on foreign income.

Pensions

Saudi Arabia does not currently have a state pension scheme which is accessible to expats. Most foreign nationals living in the country either choose to continue paying into a state pension fund in their home country or take up a personal pension plan. Some employers will offer access to a pension scheme as part of their employment package, while other expats make their own pension arrangements, with many companies offering schemes to help foreign nationals maximise their low-tax salaries.

Benefits

The relatively small population and high GDP in Saudi Arabia enable the government to operate a number of welfare schemes without the need to tax workers in the country. However, like pensions, social security in Saudi Arabia is largely restricted to Saudi nationals, so expats will need to pay for any services used. It is compulsory for foreign nationals to have medical insurance. Be aware that the trade unions are illegal in Saudi Arabia.

Disability

Historically Saudi Arabia had very little legal provision to protect the rights of disabled workers. Recently there have been new initiatives to end discrimination on the basis of disability, including employer incentive schemes, but their impact is yet to be fully realised. Foreign nationals are not entitled to any kind of disability benefits in Saudi Arabia.

Organisational structure

Although some of the multinational corporations in Saudi Arabia may have a more international culture to them, business operations are usually very conservative and hierarchical. Showing respect for family and elders is paramount, so you will need to maintain the correct degree of formality. Older people and those in senior positions are treated with the utmost respect and their decisions are rarely questioned. The decision-making process can be very prolonged as Saudis like to take time to weigh up options and get to know people before accepting a proposition.

Management style

In Saudi Arabia there tends to be some distance between managers and subordinate staff. Managers reach decisions after lengthy discussions with major stakeholders, but once that decision is made, junior employees are expected to implement it without question. In general, Saudis tend to be quite risk averse and changes may take a long time to implement. Failure is seen as a reflection on both the individual and the group, which goes some way towards explaining the frequently lengthy deliberations.

Formality

Civility and manners are important in Saudi Arabia, so adopt a formal approach to make the right impression. Avoid abbreviating people’s names without invitation as this may cause offence. Before meeting a new contact, try to find out the correct form of address for them, particularly if they hold a title such as ‘Sheikh’, meaning ‘chief’. If in doubt, the usual form of generic address is ‘Sayyed’, meaning ‘Sir’ for a man or ‘Sayeeda’, meaning ‘madame’ for a woman, followed by their full name.

Relationships

Business in Saudi Arabia is a very personal affair. Face-to-face meetings are essential to developing the relationships you need to succeed there. Your sponsor may be able to help with introductions, but patience will be your best friend. Put aside plenty of time for meetings and social occasions as both are frequently interrupted. That said, Saudis enjoy taking the time to get to know you, and even though you may need to make several visits to achieve positive outcomes the effort will be appreciated.

Dress code

There is a tendency amongst Saudis to judge people on appearances, so it’s important to look the part. Wearing good-quality, conservative clothes will make a good impression. Most Saudi businessmen wear variants on the traditional thobe and keffiyeh for both business and leisure, although some choose western attire. Male visitors are not expected to wear traditional Saudi business attire, but it’s important to respect the conservative nature of society, so men should wear long trousers and a long-sleeved shirt if not a suit and tie. Saudi women wear the abaya in public, although many now choose western clothing at home. Women visiting the country must dress modestly, covering their shoulders, arms and legs at all times. They should also wear a headscarf in public as the police may stop women whose hair is not covered.

Greetings

The typical business greeting between two men in Saudi Arabia is a handshake. Two women may hug, but men and women who are not acquainted must not greet each other in public. Social situations will most likely be single-sex or segregated, however don’t be surprised if people stand very close to you as the concept of personal space is different in the region.

Punctuality

Appointment times are usually considered guides in Saudi Arabia as the culture is very fluid in timings. That said, you will most likely be expected to arrive on time even if your contacts are not! If you are working to strict deadlines, you will need to continually reiterate the timescales to have any chance of sticking to them.

Meetings

Small talk is common prior to meetings but you should always avoid personal questions such as enquiring about wives or children. Saudis are tough negotiators and will often start with an excessively low or high price in their own favour. Everything is considered negotiable, but high-pressure tactics are not welcome. Instead, repeat your main points as this will signify that they are true. There is a tendency for Saudis to avoid giving negative answers, so a verbal ‘yes’ may in fact only mean ‘maybe’ and decisions are easily overturned.

Cultural sensitivity

The Islamic faith is culturally bound to the Saudi nation and religion has a great impact on day-to-day life. Friday is the Muslim holy day and no business activities take place then. Muslims also pray five times a day, so be considerate of this when scheduling appointments. Although western visitors are not expected to fast during Ramadan, be respectful and avoid eating or drinking in public places during this holy month. Also be aware that Saudi society places numerous restrictions on the rights of women, so it is essential to understand the expectations of your hosts.

Business language

Arabic is the official language of Saudi Arabia, but English is widely spoken, particularly in a business environment. As it is a compulsory second language in schools, many Saudis have at least a basic knowledge of English, but it’s still worth getting presentation materials professionally translated. Business cards are usually exchanged during meetings, so it’s useful to have one side of yours printed in Arabic.