How to mind your manners in the Middle East

The way business is done in the Middle East, generally defined as the region that stretches from Egypt to Turkey to Iran, reflects a cultural history that goes back more than 10,000 years. Considered the birthplace of civilization and the Jewish, Christian, and Muslim faiths, the region today is home to nearly 400 million people, the majority of whom are Muslim (91%), Arabic speaking (63%), and younger than 30.

Middle Eastern culture is far from one-dimensional—ethnic groups include Turks, Kurds, Jews, Armenians, and Persians, as well as Arabs; and Muslims tend to identify distinctly as Sunni or Shiite. Nevertheless, a similar business culture exists, said Sabry Heakal, CPA, a former senior partner with RSM McGladrey, who was born and raised in Egypt and has traveled extensively in the Middle East as a management and financial consultant.

“Life is not as fast as in the West,” Heakal said. “You’re going to face a slow pace of building a productive relationship with someone you’re going to work with.”

Heakal, who pursued his accounting career mostly in the United States and the United Kingdom, remembered his first big project in Saudi Arabia as a McGladrey partner. He was scheduled to be in Riyadh for three weeks, but the first two weeks nobody spoke to him about business.

“So I went into the office of the principal and said, ‘I’m going to give you a bill for the two weeks, and then I’m leaving within two days,’ ” Heakal recalled. “He said, ‘Why?’ I said, ‘Because I’m useless here. I’m not doing anything.’ He said, ‘No, no, no. You have to understand that for a period of time we need to test anyone that we would work with, and you passed the test. Let us really get cracking on the project now.’ ”

Heakal said he extended his stay for another two weeks and the project turned out to be lengthy and successful.

The Middle East continues to offer business opportunities despite recurring military, political, and cultural conflicts. The region has a young, growing labor force and a vast potential for high and sustained growth and jobs outside the oil industry, according to a 2014 economic outlook by the International Monetary Fund. The region’s GDP is projected to grow 3.5% this year, driven particularly by construction and retail trade and supported by strong public infrastructure spending and private-sector credit in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates—the six countries that make up the Gulf Cooperation Council.

What the experts advise

To find out what CPAs need to know about the Middle East, the JofA asked Heakal; Blake Vickers, CPA, CGMA, international tax manager at KBR, a U.S.-based construction and engineering services firm with a long history of doing business in the Middle East; and John Steininger, CPA, CGMA, an accounting staff consultant at the Saudi Arabian Oil Co., also known as Aramco, who has worked in Saudi Arabia for 25 years.

What are some important customs in the Middle East, and why should U.S. CPAs be familiar with them?

Vickers: Business in the Middle East is personal, and it is largely based on good manners, so building strong personal relationships and trust with your counterparts, including your outside service providers, is really important.

You need to invest time to get to know the people you’re dealing with. It’s always good to ask about the health and well-being of the family and how many children they have, or where they studied or are about to study; but never ask specific questions about the wife or daughter, or any female members of the family. That’s not taken well, but asking about the family in general terms is very important.

Secondly, status is very important, and it’s important to stand and to greet and acknowledge the most senior person in the room when you come in. It’s not hierarchical, more a general honoring of the elderly and respecting those in authority.

Thirdly, handshakes are always used, and a handshake can take a very long time. Etiquette commands that you wait for the senior person to withdraw his hand. Always use your right hand. The left hand is considered unclean. Now, a man interacting with a man is different from a man interacting with a woman. When a Western man is introduced to a woman, it’s advisable to wait and see if she holds her hand out. Assume that in public she won’t. If a Western woman is introduced to a Middle Eastern man, she should wait to see if he offers his hand. He may feel uncomfortable shaking hands with a woman.

Heakal: The pace of life is not as fast as in the West. Work is interrupted for prayers. During Ramadan, working time is maybe from 9 a.m. to 2 p.m. because people are fasting. And you’re going to face a slow pace of building a productive relationship with someone you’re going to work with.

People will observe and assess you, whether things they tell you in confidence would remain in confidence.

Also, they don’t like someone to come in and give the impression the white knight is coming. Even though you notice they need help, you have to be very modest in your approach. They don’t like arrogance. For example, when you hear an argument that doesn’t really make sense, you don’t stop it. Let them finish it and then say, “Don’t you think that if we did it this way, it would reach an objective faster and more efficiently?”

Steininger: Islam in Saudi Arabia is the only religion allowed, so being conservative when you dress is the No. 1 thing. Western women, when they go shopping, go into town, they have to wear an abaya [a full-length robelike garment] or cover their hair. Men are not allowed to wear shorts. I have to wear long pants.

You have to time your shopping in Saudi Arabia because they have two afternoon prayers that conflict with shopping, and stores have to close. In Riyadh, for example, restaurants close their doors, people inside finish their meal, the restaurant staff goes in the back, and for about 20 minutes or so you don’t see anybody, and people outside are locked out. The other countries aren’t as strict as Saudi Arabia. Businesses there don’t usually close for prayer time.

In Saudi Arabia, women aren’t allowed to drive. Single women aren’t supposed to be with anybody other than their parents or their mother and sister. Married women are only supposed to be with their husband.

But some of that is changing as more Saudi women are working. It’s an ongoing battle in the country with the younger generation not accepting the values of the older generation.

How do business culture and corporate leadership in the Middle East differ from the United States? What steps can U.S. CPAs take to minimize misunderstandings?

Vickers: Several key differences: The workweek is generally Sunday through Thursday. Punctuality is always expected of Westerners but is not necessarily practiced by the locals. The concept of time is relaxed, and sometimes decisions can be made very quickly, other times they are made more slowly. Meetings can be very chaotic—phone calls can be taken, emails responded to, and text messages exchanged; and don’t be surprised if somebody enters your meeting unannounced and begins to discuss his or her own agenda.

In some areas of the Middle East it is common to communicate with vocal emphasis, really loud volume and body language, but it’s not anger even though it comes across that way. Responding to anger or seriousness with a light laughter or a smile is very common, but that doesn’t mean they’re not taking you seriously. Also, the concept of personal space is different. You could be talking to somebody, and someone walks up really close and starts talking to you, and it’s uncomfortable. Finally, never show the bottom of your shoes when sitting down—it’s considered very rude.

Heakal: Big corporate entities are owned by families in many countries in the Middle East, therefore corporate leadership is centered around who is next in the family. Succession is always around family members. Also, the CPA going over there will need to understand that in most cases he or she will not deal with, for example, an audit committee. You’re going to deal with the godfather, the main guy in the family that runs the business, and you need to develop the relationship at that level. You don’t develop a relationship with the controller or the treasurer. You shoot for the top because that’s where decisions will be made.

You can’t send a young CPA to deal with the top guy. It has to be one of the senior partners. In many Middle Eastern countries, they look at the hair: If there’s enough white in it, then you’re senior enough. Once the relationship has been established, even a phone call would be helpful to deal with what interferes with what you’re trying to do.

Business culture in Middle Eastern countries tends to be straightforward—in the sense that if I shake your hand agreeing to something, it will happen, regardless of whether or not we sign a piece of paper. A handshake is more important than writing a contract 50 pages long because once business partners in the Middle East develop that relationship with you, then they trust you, and you never want to betray that trust. They trust you with the hours you’re going to report. They trust you that the hours are going to be productive, and they trust you with doing the best you can to come up with the best solution for them.

Steininger: Generally speaking, don’t go into Saudi Arabia expecting to get an answer in your first meeting. Throughout most of the Middle East, the pace is slower. It’s the insha’Allah attitude. Insha’Allah means “God willing.” Bookra insha’Allah means “tomorrow, God willing.”

Everything is on consensus. Saudis like to have meetings, and they like to have PowerPoints, everything explained, and then a lot of questions. At the end of the meeting, you may not have any resolution. You may just agree to meet again.

They don’t like confrontation. They don’t want to be put on the spot to make a decision, and they will not do that.

What’s the best way to handle a business dispute with a supplier or partner in the Middle East?

Vickers: Business disputes are easier to deal with if you have a strong personal relationship.

I’ve been in discussions when there were huge amounts of money on the table, and we had one need and they had another, and they believed they had communicated that need to us upfront and we didn’t understand that. So we asked them to tell us what they were trying to accomplish, and we’d tell them what we were trying to accomplish and that we’d see if we can bridge the two. It took a couple of weeks, but we were able to come up with a compromise both parties were happy with.

Heakal: Don’t force the supplier or the partner in the Middle East to draw a line in the sand. Try to empathize, try to really understand his point of view, and don’t talk to him like he doesn’t understand anything. Turn it into a discussion instead of an argument. And lower your voice and work on everybody to lower their voices. If you don’t make him feel like he is going to lose his pride, he’s going to come around to your point of view.

Steininger: Saudis like to sit down and talk. So the best way to handle any disputes is have a meeting and discuss both sides. Don’t go yelling and screaming, or they’ll get up and leave. When you raise your voice, that’s a good way to create a confrontation with somebody who will not do business with you. You have to be very respectful and talk in a calm voice, and they will be the same, and you’ll be surprised how far that goes.

How difficult is it to recruit and retain employees in the Middle East, particularly finance talent? What is the best way to address the challenges?

Heakal: It’s very difficult—and I’m talking about accounting and finance professionals.

Most accounting firms don’t provide recruits with a clear career track. Also, many accounting firms are owned by a single individual who would like to leave the firm to his son. The common worker will get a fair wage, and that’s it.

In countries where there are active stock markets and investment banking firms, such as Qatar, Saudi Arabia, and the United Arab Emirates, you’re competing with the investment banking firms for finance professionals. Given the fees charged for most professional engagements in the Middle East, you cannot compete with the investment bank.

In Saudi Arabia, accountants prefer to go work for the government. They will get a good salary, and the work is not that tough. Once they get into government, they figure, “Why should I do anything other than work from 9 a.m. to 2 p.m. or from 9 a.m. to 3 p.m.?” You see what I mean? It becomes a bad habit.

Steininger: It’s difficult to make it competitive financially for an American to work in the Middle East. Because of the U.S. [tax law], the companies have to gross up an American’s salary to cover taxes. They don’t have to do that for somebody from the U.K., Germany, or France.

What’s the most important piece of advice you would give U.S. CPAs dealing with the Middle East? Why do you feel so strongly about this advice?

Vickers: The Middle East is a large area. In spite of having a common culture, there is a wide variety and a wide diversity within the region. I would also say that just like in any Western country, the Middle Eastern people run the full gamut from very classy, warmhearted, generous, trustworthy, honorable people to unmitigated rogues and everything in between.

A lot of Middle Eastern people are very sophisticated and very smart and have a better understanding of our culture than we have of theirs. They generally forgive a cultural faux pas if they understand that we’re not intentionally trying to be rude or disregard their culture or values.

Heakal: Don’t expect performance according to a U.S. timescale. Expect delays and provide for them. Try to deal with the cultural differences by bringing in people that have good human qualities. And try to overcome the language challenge. For most Arabs, the Americans talk too fast and use too many abbreviations.

Steininger: The culture and religion are intertwined. That has to be respected.

Sabine Vollmer is a JofA senior editor. She can be reached at svollmer@aicpa.org or 919-402-2304.

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