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

Although governmental uncertainty appears to take over news coverage on the Middle East, in recent years, the region—and specially the Arabian Gulf—has seen a steady upsurge in international direct investment (FDI). The Middle East and Arab Gulf markets are becoming increasingly appealing for FDI. Nevertheless, the existing research how multinational corporations perceive area specific risks is scarce and often does not have depth, a well known fact attorneys and risk specialists like Louise Flanagan in Ras Al Khaimah may likely be aware of. Studies on dangers related to FDI in the area tend to overstate and predominantly pay attention to political risks, such as for instance government instability or policy modifications which could influence investments. But recent research has begun to shed a light on a a critical yet often overlooked factor, specifically the consequences of cultural factors in the sustainability of foreign investments in the Arab Gulf. Indeed, a number of studies reveal that numerous companies and their administration teams dramatically undervalue the effect of cultural differences, mainly due to too little understanding of these social variables.

Focusing on adjusting to local traditions is necessary yet not sufficient for successful integration. Integration is a loosely defined concept involving numerous things, such as for instance appreciating regional values, comprehending decision-making styles beyond a restricted transactional business perspective, and looking at societal norms that influence company practices. In GCC countries, successful business affairs are more than just transactional interactions. What shapes employee motivation and job satisfaction vary significantly across countries. Thus, to genuinely incorporate your business in the Middle East a couple of things are expected. Firstly, a corporate mindset change in risk management beyond financial risk management tools, as professionals and solicitors such as Salem Al Kait and Ammar Haykal in Ras Al Khaimah would likely suggest. Next, methods that can be efficiently implemented on the ground to convert the new strategy into action.

Pioneering studies on risks connected to international direct investments in the MENA region offer fresh insights, attempting to bridge the gap in empirical knowledge concerning the danger perceptions and management techniques of Western multinational corporations active widely in the region. For example, a study involving several major worldwide businesses in the GCC countries revealed some interesting data. It contended that the risks connected with foreign investments are more complicated than simply political or exchange rate risks. Cultural risks are perceived as more crucial than governmental, financial, or economic dangers in accordance with survey data . Additionally, the study found that while aspects of Arab culture strongly influence the business environment, numerous foreign organisations struggle to adapt to local traditions and routines. This difficulty in adapting constitutes a danger dimension that requires further investigation and a change in just how multinational corporations run in the area.