Written and Produced by Synapse Global
Saudi Arabia is an Islamic monarchy currently ruled by King Salman bin Abdul Aziz. Its Basic Law, issued by Royal Decree specifies that the King be chosen from among the sons of the first King, Abdul-Aziz bin Saud, and their male descendants. The King controls the legislative, executive, and judicial bodies and royal orders and royal decrees that together form the basis of Saudi Arabia’s legislation.
It is one of the most religiously conservative countries in the world and Islam informs much of its business and social culture. This can make it a novel place to target for business growth and can provide plenty of opportunities for challenging situations. Businesses that do their homework on how to approach everything from meetings to long-term agreements will give themselves a much better chance of success in the Kingdom and reduce the risks associated with international investments.
Driven by the protracted slump in energy prices and a young, fast-growing population, KSA is in the early stages of a period of profound change, not least in the business arena. Steered mainly by the youthful and ambitious Crown Prince, HH Mohamed bin Salman, or MBS as he is popularly referred to, the country has embarked on a path of relative social and economic liberalism through its “Vision 2030” plan. The decline in petro-dollar revenues coupled with the near-term pressures of job-creation for the swelling population have made economic diversification a priority. This is already providing significant opportunities for international businesses to bring much needed expertise and products to the GCC’s largest market. Reform of areas such as business set-up and commercial dispute-resolution are gathering pace in an effort to make KSA more attractive to international investors. Overall KSA is rapidly becoming a more open and efficient environment to establish and grow a business for international investors.
Recent events in the Kingdom such as the Future Investment Initiative in November and the subsequent anti-corruption targeting of prominent Royal Family members and prominent business men have sent a somewhat confusing message to outside investors. However, many in the region believe that a new, more transparent and even business environment will result over the medium term giving investors increased confidence in doing business in KSA.