Saudi Arabia at a glance
Location: Bordering the Persian Gulf and the Red Sea, Saudi Arabia is north of Yemen. Its area is slightly more than one-fifth the size of the United States.
Total Population: 28.5 million. Immigrants make up more than 30 percent of the total population, according to 2015 UN data.
The only national flag to display an inscription as its principal design, the green Saudi flag (a traditional color in Islamic flags) puts the Shahada or Muslim creed in large white Arabic script above a white saber.
Government: Absolute monarchy
Religion: Muslim (official). Despite the large expatriate population of various faiths, most forms of public religious expression inconsistent with the government-sanctioned interpretation of Sunni Islam are restricted.
Economy: In an economy—the largest in the Gulf region—where oil accounts for approximately 87 percent of budget revenue and 42 percent of GDP, the Saudi Arabian government maintains strong controls over major economic activities. Seeking to diversify from an over-dependence on oil, the government in 2016 adopted the National Transformation Program, which aims to enhance the private sector and, among other objectives, increase the culture of entrepreneurship. With a large foreign workforce, the country does struggle with employing its own nationals (unemployment in 2016 was 11.2 percent).
GDP (official exchange rate): $637.8 billion
Currency: Saudi Riyal (conversion rate at press time: 1 SAR equals $0.27 USD).
Franchising in Saudi Arabia: A handful of factors point toward a positive outlook for franchising, including a rising per capita GDP, more Saudis traveling overseas and experiencing new concepts, and an expanding population—with 48 percent of it below the age of 24. Shopping is a top pastime, and growth in the construction of shopping malls is boosting the franchise sector. A franchisee business is treated under the Saudi commercial agency law and U.S. companies need to address the conservative nature of Saudi society; franchisors are advised to consult with an attorney familiar with Saudi law before establishing, changing or terminating a franchise agreement.
Ease of doing business ranking by World Bank: 94, up from 96 in 2016.
Cultural notes: Public activities are strictly segregated by gender, with public life primarily being the domain of men. Visitors are subject to the same Islamic law as Saudis and must have a sponsor before entering the country. This sponsor is your most important contact, and once you’ve chosen a sponsor, you are not permitted to switch. When it comes to business, the pace is much slower in Saudi Arabia than in the West, so be patient.
Sources: U.S. Commercial Service, CIA World Factbook, World Bank, “Kiss, Bow, and Shake Hands.”