Challenging Locations: Saudi Arabia
Posted by: Stacie Fulford, Client Services Director
The largest Arab state in Western Asia, the Kingdom of Saudi Arabia is a frequented destination for international assignees, with many relocating to Riyadh and Jeddah. Rich in historical and cultural heritage, the country is a fascinating destination but does pose challenges for relocating families, including housing, security, cost of living, cultural issues and transportation. Here, we take a look at some of these relocation hurdles and the best way to approach them.
Once a valid work permit is obtained, assignees need to apply for an Iqama (a government identity/registration document) within four days of arrival. As part of the registration process, a permanent address is required, which means assignees have to choose their new home before they arrive. With this in mind, organisations should ensure funds for security deposits and rents are available prior to assignment start dates.
Another consideration to meet the urgency with which a permanent address is required, is for a company to add rotational clauses into housing leases. This can be done when securing a new lease or renewing an existing one. That way, when an assignment is shorter than the agreed lease term, it allows a new assignee to use the property. This solves the urgency of finding a permanent address and is also a cost effective way to approach housing if a company has scheduled back-to-back relocations.
Cost of Living
Saudi Arabia tripled the country’s VAT rate on 1 July 2020, from 5% to 15%. This was to address the fiscal imbalance caused by a decrease in consumer and commercial spending, the loss of oil and tax revenues and the cost of healthcare initiatives put into place in response to the pandemic. Organisations should be mindful of this hike when setting cost of living allowances and relocating families should be prepared for the high cost of living whilst on assignment.
With limited public transportation, cars are the primary mode of transport in Saudi and obtaining a licence may take up to two months to complete. Male assignees on a temporary visa can drive using their home country licence, whilst all other male expatriates need to obtain a local one. For women, Saudi nationals and sponsored female employees have priority, making it a speedier process for these groups. Female assignees with a valid home country driving licence must take a driving test (unless they have a licence from an exempt country e.g. UK or U.S.).
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.
Saudi Arabia follows Sharia (or Islamic) Law, which prohibits things such as alcohol and public displays of affection. Shops and businesses also close five times a day for prayer, so working days can often extend into the evening and assignees will have to get used to planning their day around prayer times.
Good relationship building is the way to successfully conduct business in Saudi Arabia, which means hospitality is key. Invitations should always be accepted and it’s considered impolite to decline an offer of tea or coffee, even if you’re not particularly thirsty. Cultural issues will likely be one of the key challenges that relocating families face when moving to Saudi Arabia and as such, we recommend cross-cultural training for those moving there.
For more information on Saudi Arabia or any other aspect of your international mobility programme, contact your Cartus representative or email email@example.com.