Why Most Businesses Fail to Expand into Saudi Arabia and the UAE—And How to Avoid Costly Mistakes

Feb 17

3 min read

Expanding into Saudi Arabia and the UAE presents enormous opportunities, with both markets playing a central role in global trade, investment, and economic growth. However, despite the potential, many businesses fail when trying to enter these markets.

A McKinsey & Company study found that over 70% of international businesses struggle to scale in new markets due to poor market entry strategies, lack of local connections, and regulatory challenges. In Saudi Arabia and the UAE, these barriers can lead to delayed approvals, failed partnerships, and millions in lost investments.

At R Consultancy Group UK, we help businesses bypass these challenges and fast-track success. Before you expand, here’s what you need to know.

The Three Biggest Reasons Businesses Fail in Saudi Arabia and the UAE

1. Bureaucratic Red Tape and Regulatory Barriers

Saudi Arabia and the UAE have rapidly evolving regulations that require local expertise to navigate. Companies that attempt to enter without the right guidance face:

Lengthy approval processes that delay operations for months.
Legal and compliance risks that lead to fines or forced shutdowns.
Difficulties in securing the right business structure for long-term success.

Fact: According to the World Bank, setting up a business in Saudi Arabia without local expertise can take up to six months, compared to just 30-45 days with the right local connections.

2. Lack of Direct Access to Key Decision-Makers

Many companies rely on generic market research and local intermediaries instead of direct relationships with high-level decision-makers in government and business. Without the right access, businesses:

Struggle to form profitable partnerships.
Miss out on government-backed incentives.
Get stuck in slow negotiations that drain resources.

Fact: A PwC report found that 78% of successful international expansions in the Gulf were secured through strategic government or private-sector partnerships.

3. Misalignment with Local Business Culture and Market Needs

Many businesses enter the Gulf market without understanding the business culture, consumer behaviour, or industry-specific demands. The result?

Products or services that don’t match market demand.
Pricing and branding that fail to connect with local consumers.
Missed opportunities due to a lack of cultural adaptation.

Fact: A Harvard Business Review study found that companies that align their strategy with local business culture experience 2.5x higher success rates than those that don’t.

How R Consultancy Group UK Helps Businesses Succeed Where Others Fail

At R Consultancy Group UK, we don’t just offer consulting—we provide a shortcut to success by eliminating the risks and obstacles that derail most businesses.

1. Fast-Tracked Government Approvals and Compliance

We handle all regulatory approvals, ensuring:

Quick licensing and setup.
Full compliance with Saudi and UAE business laws.
Access to government incentives and tax benefits.

2. Direct Access to High-Level Business Leaders and Investors

We connect clients with decision-makers who can accelerate their success, including:

Government officials for fast approvals.
Strategic investors for funding and joint ventures.
Key business leaders who unlock new opportunities.

3. Market Entry Strategies Designed for Long-Term Growth

We don’t just help businesses enter—we position them for long-term profitability and scalability. Our services include:

Industry-specific market research.
Tailored go-to-market strategies.
Cultural adaptation consulting to ensure maximum market alignment.

The Cost of Getting It Wrong vs. The Value of Getting It Right

The Cost of Mistakes:

Delays that cost millions in lost revenue.
Failed partnerships that waste time and resources.
Regulatory issues that lead to shutdowns or fines.

💡 The Value of a Strategic Expansion:

Faster entry with minimal risk.
Stronger partnerships with high-value decision-makers.
Increased profitability with a proven market entry strategy.

Expand Smarter, Faster, and More Profitably

If your company is serious about entering Saudi Arabia or the UAE, do it the right way. At R Consultancy Group UK, we make your expansion smooth, strategic, and successful.

Let’s discuss your expansion today. Contact us at info@rconsultancy.co.uk

With the right strategy, your business doesn’t just enter the Gulf market—it thrives.