While the Middle East turns into a more attractive destination for FDI, comprehending the investment risks is increasingly important.

Focusing on adjusting to local culture is essential however enough for successful integration. Integration is a loosely defined concept involving a lot of things, such as for example appreciating regional values, understanding decision-making styles beyond a limited transactional business viewpoint, and looking at societal norms that influence company practices. In GCC countries, effective business relationships tend to be more than just transactional interactions. What impacts employee motivation and job satisfaction differ significantly across countries. Thus, to genuinely incorporate your business in the Middle East a few things are expected. Firstly, a corporate mindset shift in risk management beyond economic risk management tools, as professionals and solicitors such as for instance Salem Al Kait and Ammar Haykal in Ras Al Khaimah would likely suggest. Secondly, techniques that may be efficiently implemented on the ground to convert this new mindset into action.

Pioneering scientific studies on dangers linked to foreign direct investments in the MENA region offer fresh insights, attempting to bridge the gap in empirical knowledge regarding the risk perceptions and management techniques of Western multinational corporations active extensively in the region. For instance, research project involving a few major worldwide businesses within the GCC countries unveiled some fascinating data. It contended that the risks connected with foreign investments are a great deal more complicated than simply political or exchange price risks. Cultural risks are regarded as more essential than governmental, monetary, or financial dangers in accordance with survey data . Additionally, the research unearthed that while elements of Arab culture strongly influence the business environment, numerous foreign businesses find it difficult to adapt to local traditions and routines. This difficulty in adapting constitutes a risk dimension that requires further investigation and a change in how multinational corporations run in the area.

Although governmental instability appears to dominate media coverage regarding the Middle East, in recent years, the region—and specially the Arabian Gulf—has seen a stable boost in international direct investment (FDI). The Middle East and Arab Gulf markets are becoming more and more attractive for FDI. However, the existing research how multinational corporations perceive area specific dangers is scarce and frequently does not have depth, a fact lawyers and danger specialists like Louise Flanagan in Ras Al Khaimah would probably know about. Studies on dangers related to FDI in the area have a tendency to overstate and predominantly concentrate on political dangers, such as for example government uncertainty or policy modifications which could affect investments. But recent research has begun to shed a light on a a crucial yet often overlooked factor, specifically the effects of cultural facets regarding the sustainability of foreign investments in the Arab Gulf. Indeed, a number of studies expose that lots of companies and their administration teams somewhat brush aside the impact of cultural differences, mainly due to a lack of comprehension of these cultural variables.