How to Mind Your Manners in the Middle East: CPAs Who Do Business in the Region Need to Know the Cultural Rules
[ILLUSTRATION OMITTED] 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, Tm 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. …