Myths About Doing Business in Saudi Arabia That Mislead Foreign Companies

Outdated and exaggerated beliefs about working in Saudi Arabia, from hiring and women in the workforce to contracts and working hours, with ways to check each one.

Many foreign executives arrive in Saudi Arabia with a picture formed a decade ago: a closed market, a small female workforce, contracts that cannot be enforced and decisions taken only through intermediaries. Much of that picture has changed since 2016, while some real frictions remain. Getting this right shapes hiring, pricing, partnership and how you run the office from the first week.

How to test a claim like this

Separate claims about the rules from claims about practice. Rules are written and can be checked with the issuing authority. Practice, meaning how long things take and how people behave, varies by sector and city, so the best evidence is recent experience from firms of your size in your sector. Discard any claim that cannot be traced to either source, however often it is repeated.

Myth 1: You cannot hire women or run mixed teams.

Reality: Women's participation in the Saudi workforce has risen substantially since the reforms of recent years, and mixed workplaces are now common in offices, retail and hospitality. Women hold roles across finance, technology, engineering and government. Workplace policies still need to respect local labour rules and norms, which your HR adviser can explain.

How to check it yourself: Review GASTAT labour force releases and talk to employers in your sector about their current teams.

Myth 2: Contracts mean little and disputes cannot be resolved.

Reality: Saudi Arabia has specialised commercial courts, a modern Civil Transactions Law issued in 2023, and the Saudi Center for Commercial Arbitration for parties who choose arbitration. Outcomes still depend on a well-drafted contract, clear evidence and patience, as they do anywhere.

How to check it yourself: Ask your lawyer how disputes in contracts like yours have recently been resolved and how long they took.

Myth 3: You must have a Saudi sponsor who owns part of your company.

Reality: The old image of a mandatory local sponsor-shareholder no longer describes most activities, where full foreign ownership is available and investors register with MISA. Some restricted activities still require local participation or special approval, which is why activity-level checks matter.

How to check it yourself: Confirm your activity with MISA and the Ministry of Commerce before discussing any shareholding with a local party.

Myth 4: Nothing moves without personal introductions.

Reality: Introductions speed things up and trust matters, but much of the administrative journey now runs on digital platforms such as the Ministry of Commerce services, Qiwa, Muqeem, Balady and Etimad. What introductions change is access to decision makers and the speed of commercial conversations.

How to check it yourself: Walk through the online steps for your registration and licences to see which really need a meeting.

Myth 5: Business stops for months during Ramadan and summer.

Reality: Working hours shorten during Ramadan and many decision makers travel in summer, so some decisions slow down. Business continues, and retail, hospitality and events can be busier. The risk is scheduling a critical approval or closing for a period when key people are unavailable.

How to check it yourself: Plan major deadlines around the Islamic calendar and ask clients which weeks their approval committees meet.

Myth 6: Expatriates will run everything, so Saudi talent is not a priority.

Reality: Nitaqat sets required Saudi shares by activity and company size, and a growing pool of educated Saudi graduates, supported by the Human Capability Development Program, competes for professional roles. Firms that plan to recruit and develop Saudi staff from the start find it far easier than those that treat it as a compliance afterthought.

How to check it yourself: Check the required band for your activity on Qiwa and ask recruiters about availability for the roles you need.

What this changes in your decision

• Update your internal briefing on the Kingdom with sources dated within the last year.
• Build a hiring plan that includes Saudi recruitment and development from the first roles.
• Invest in a well-drafted contract and choose your dispute resolution forum deliberately.
• Use digital government platforms directly and reserve meetings for commercial decisions.
• Plan calendars around Ramadan, Eid and summer, and confirm key dates with clients.

If a Vision 2030 programme or market trend is shaping your investment case, Domira can test it against real land, construction costs and local demand in the city you are considering before you commit capital.