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Emerging Market Profiles: Living and Working in Saudi Arabia
 

By Pat DeDonato  7/16/2014

Located on the Arabian Peninsula with coastlines on the Persian Gulf and Red Sea, Saudi Arabia is known for its large oil and gas reserves. It is the largest Arab state in Western Asia, with the cities of Riyadh and Jeddah the most frequented expatriate destinations. This emerging market profile discusses key challenges associated with living and working in Saudi Arabia, including housing, schooling, transportation, security, language and culture.

Housing

The housing market for expatriates consists mostly of compounds, which are secure gated communities. Most assignees choose to live in compounds, not only for security purposes but also for the close community atmosphere, which can provide much needed support for newly relocated assignees. Demand for good quality, expatriate housing is very high in Saudi Arabia and waiting lists are common, with some reaching one year.

Properties are normally rented as furnished, from one bedroom apartments to five bedroom villas. Most compounds offer a variety of amenities, including grocery stores, movie theaters, hair salons and restaurants. They also offer recreational facilities such as swimming pools, tennis courts and ice rinks. Compounds typically provide private buses to schools and shopping centers, and other amenities outside of the gated community.

In the capital of Riyadh, demand for properties located in compounds is high among expatriates and continues to rise. Popular gated communities include the Kingdom Compound, Al Hamra Compound and Arizona Compound, with some waiting lists for properties reaching 12 months. In the west of Saudi Arabia, popular compounds like Belleview and Al Basateen in Jeddah are also very high in demand. Similarly, the rental market in the country’s Eastern Province is experiencing low vacancy levels and high demand. As development projects continue in the region, many multinational companies own properties in the area. Located in the Eastern Province, the cities of Jubail and Al-Khobar are quite western in orientation, with many expatriates residing there.

There are a number of popular gated communities in Al-Khobar, including Al Rushaid Compound, Riyadh Compound and Zamil Compound. All offer a variety of property-types and are family friendly. In Jubail, there are compounds being built to meet demand with the Zamil Compound, Bajrai Garden Village and Pearl Beach compounds all extremely low in availability. Western compounds in the Eastern Province must meet a number of security requirements including military presence, steel gates, steel gate barriers and walls that must be a certain height and thickness.

Rental Rates

Typically most compounds will have their own lease agreements. Diplomatic clauses or early termination clauses are not available.

Deposits may range from 5,000 Saudi Riyals (SAR) to 10,000 SAR and should be paid immediately to secure an assignee’s preferred property. For an individual lease (instead of a corporate lease) the prospective tenant needs a valid residency permit, which means assignees must wait to complete the immigration process before signing a lease agreement.

Rental payments are paid annually in advance. Utilities and maintenance fees are often not included in rental payments and may be paid on a monthly basis. Telephone, Internet and satellite television are also typically purchased separately and paid by the tenant.

Due to low availability in the housing market, contact your relocation provider as soon as an assignment is scheduled. This may help to source a property in time for the start date.

Once a property is found, assignees will need to act quickly to secure the lease. As deposits need to be paid immediately, organizations should ensure that accommodation allowances are made available to the assignee as soon as possible. This will make the home-finding process smoother.

Schooling

There is a wide selection of international schooling options in Saudi Arabia but availability is limited and assignees should begin the application process early. As many schools require placement tests and registration fees that are nonrefundable, advance research is imperative. International school websites provide fully comprehensive information.

Annual fees for private schools in Saudi Arabia range from 35,000 SAR to 70,000 SAR. This does not include school trips, uniforms or private bus service costs.

Transportation

As public transportation is limited in Saudi Arabia cars are the primary mode of transport. However, assignees should be made aware that women are not allowed to drive in the country and typically opt for designated drivers. Depending on the country of origin, expatriates may drive on a foreign driver’s license for up to three months, before they are required to get a Saudi driver’s license. Driving conditions may be more challenging than in some western countries and we recommend that assignees become familiar with the local language before driving, as nearly all road signs will be in Arabic.

As road conditions in Saudi Arabia in general can be quite challenging, especially for non-Arabic speakers, it is recommended that assignees do not drive. Typically, most companies provide their assignees with a car and driver for the duration of their assignment.

Security

Safety and security is a key challenge in Saudi Arabia. However, the country’s safety measures are highly regarded with car searches for example, a common practice when entering a compound or high-end hotel. To avoid potential threats and to protect expatriates living in compounds, there are typically at least three checkpoints, a car search, identity confirmation and guest list confirmation.

We recommend that you ensure your assignees attend a security briefing to allay perceptions and concerns. It is important that assignees are realistic with regards to the potential dangers, but at the same time, nonalarmist. Organizations should have a well-developed security policy and a local ‘go to’ person for security related matters.

Language

Arabic, Saudi Arabia’s official language, is spoken in three distinct dialects in the country’s east, interior and west. As a language it is often deemed to be quite challenging to learn, with its own alphabet and sentences read from right to left. We recommend that assignees learn some basic Arabic phrases, as well as standard greetings and yes/no. It is also useful to learn numbers, which can be beneficial when shopping and in office buildings for example (floor number, room number).

Language training is strongly recommended for assignees and their families moving to Saudi Arabia. Language lessons should be conducted before and during the assignment to ensure they feel fully prepared for the move.

Religion

Religion influences nearly all aspects of daily life in Saudi Arabia. As it is home to two of Islam’s most sacred cities, Mecca and Medina (located in the west), the country’s rules and regulations are particularly strict and follow Sharia (or Islamic) Law. As such, the following laws need to be respected and followed by all expatriates at all times, as matters can escalate quite quickly if caught not doing so:

  • Alcohol is forbidden.
  • Public displays of affection are not tolerated.
  • Nonrelated men and women cannot be together in public spaces or cars.
  • Shops close five times a day for prayer times, so shopping has to be arranged accordingly.
  • Do not bring or eat pork.

The working day, also influenced by religion, is broken up by prayer times, including a long break in the afternoon. Due to these breaks, working hours can often extend into the evening and night.

Ramadan

The month of Ramadan is strictly adhered to in Saudi Arabia, and working hours can change to accommodate some of the fasting period. Expatriates should respect Ramadan and not eat or drink in public or in the presence of someone fasting during this time.

Women

Women are not allowed to drive in Saudi Arabia and are required to cover their entire bodies, from wrists to ankles, when in public. Depending on the city they are in, women may have to wear a head scarf or an abaya, which is a long gown. Such dress is not necessary when at home or in compounds.

Doing Business

The following lists the ‘top tips’ and best practices for those doing business in Saudi Arabia:

  • Relationships are the most important element of business in Saudi Arabia. Assignees will need to take their time to cultivate and maintain business relationships.
  • Like most Asian countries, hospitality is key to relationship building. Invitations should always be accepted and it is considered impolite to reject tea or coffee when offered. Food or drink should be accepted with the right hand only, as the left hand is considered unclean.
  • Maintain good eye contact at all times and expect people to be more tactile than in some western countries. Although a firm handshake is expected in the west, it is interpreted as aggressive in Saudi Arabia. Verbal communication is deemed more important than written communication and assignees may find that they achieve more positive and quicker results by meeting or telephoning people, rather than e-mailing or writing to them.
  • Meetings may start late, over run or be cancelled. There could also be frequent interruptions. They are “circular” in format rather than “linear,” with an unfixed agenda. Saudis may revisit previous topics and introduce personal conversation. The latter is typically done to diffuse tension and give attendees time to re-evaluate their business position.
  • Assignees should respect the importance placed on “saving face,” especially during business negotiations or transactions. Patience is imperative when doing business and frustration should never be shown.

Climate

Saudi Arabia’s climate is harsh and extreme. Most of the country is covered by desert which means the day is extremely hot and the night is cold, sometimes below freezing in certain areas. Humidity is between 85 percent and 100 percent, creating a hot mist that hangs over large cities in the day. In the summer months, layered lightweight cotton clothing is recommended, although air conditioning is widely used in houses, cars, offices and shopping malls. Rainfall is minimal, but when it does rain, it is usually a sudden downpour that may create flash floods.

Saudi Arabia can also be prone to sandstorms, which can last hours or days, across specific areas or the entire country. We strongly advise that assignees and their families remain indoors during sandstorms and to reduce damage, outdoor items should be kept secure.

Immigration

Once a valid work permit is obtained, all assignees must apply for an Iqama, which is a government identity/registration document. Assignees will need to have an Iqama before their family can reside in Saudi Arabia. The Iqama will also allow the assignee to open a bank account, set up utilities and drive a car. The assignee and family will need to have their Iqama on their person at all times, as government officials or policemen may request it.

Pat DeDonato is senior vice president of supply chain management at Cartus, a provider of global relocation solutions serving half of the Fortune 50, in more than 165 countries, helping clients with their mobility, outsourcing, consulting, and language and intercultural training needs.

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