Recent research highlights the significant role that cultural differences play within the success or of foreign investments in the Arab Gulf.

Although political instability appears to take over news coverage regarding the Middle East, in recent years, the region—and particularly the Arabian Gulf—has seen a steady increase in foreign direct investment (FDI). The Middle East and Arab Gulf markets have become rapidly appealing for FDI. However, the existing research on what multinational corporations perceive area specific risks is scarce and frequently does not have insights, a well known fact solicitors and danger consultants like Louise Flanagan in Ras Al Khaimah would likely be familiar with. Studies on risks related to FDI in the area have a tendency to overstate and predominantly concentrate on political risks, such as for example government instability or policy modifications that may influence investments. But lately research has begun to shed a light on a a critical yet often overlooked aspect, namely the effects of cultural facets regarding the sustainability of foreign investments in the Arab Gulf. Indeed, a number of studies expose that numerous businesses and their administration teams significantly neglect the impact of cultural differences, due mainly to deficiencies in knowledge of these cultural variables.

Recent studies on dangers connected to international direct investments in the MENA region offer fresh insights, trying to bridge the research gap in empirical knowledge about the risk perceptions and management strategies of Western multinational corporations active extensively in the region. As an example, research project involving a few major international companies in the GCC countries unveiled some fascinating data. It contended that the risks related to foreign investments are a lot more complex than just political or exchange rate risks. Cultural risks are regarded as more essential than political, financial, or economic dangers in accordance with survey data . Also, the study found that while aspects of Arab culture strongly influence the business environment, numerous foreign businesses struggle to adjust to regional traditions and routines. This trouble in adapting is really a risk dimension that needs further investigation and a change in how multinational corporations run in the area.

Working on adjusting to local culture is necessary but not sufficient for effective integration. Integration is a loosely defined concept involving numerous things, such as for example appreciating regional values, comprehending decision-making styles beyond a limited transactional business perspective, and looking into societal norms that influence company practices. In GCC countries, effective business connections tend to be more than just transactional interactions. What affects employee motivation and job satisfaction vary significantly across countries. Therefore, to genuinely integrate your business in the Middle East two things are expected. Firstly, a business mindset change in risk management beyond economic risk management tools, as experts and lawyers such as for instance Salem Al Kait and Ammar Haykal in Ras Al Khaimah would probably recommend. Secondly, strategies which can be effortlessly implemented on the ground to convert this new mindset into practice.