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Taking A Look At Costco In Saudi Arabia

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Costco in Saudi Arabia
Foreign investors seeking to do business in Saudi Arabia are required to meet legal and other business regulatory requirements by the Saudi Arabia government. Foreign investment in Saudi Arabia is attractive because of favorable World Trade Organization regulations in the country. Costco Wholesale Corporation is a U.S corporation for members only. Costco has 663 warehouses across the U.S, UK, Canada, Australia, Taiwan, Mexico, Japan, South Korea, Spain and Taiwan (Costco). It offers a wide range of merchandise and is the third largest membership warehouse internationally. Members can use their membership to shop at Costco. The company is widely recognized for its customer satisfaction. Saudi Arabia is an attractive place for Costco’s foreign investment. However, many aspects of the Saudi Arabia’s institutional environment, foreign business regulatory agencies and foreign business registration lengthy processes might discourage Costco from investing in Saudi Arabia.
Costco may find it difficult to invest in Saudi Arabia because of challenges associated with cultural and religious barriers. Unlike many countries whose legal systems are independent from religion, the Saudi Arabia’s legal system relies on Islamic Sharia Law (Overview of Saudi and Foreign Corporate Laws). Costco should …show more content…

They are also required to comply with the country’s labor laws on regulations relating to employee working hours, annual leave, wrongful dismissal, end of service benefit, and sick leave among other things (HSBC Commercial Bank). Moreover, employment contracts should be written in Arabic and non-Saudi employees must be hired on fixed term contracts which expire upon the expiry of the worker’s work permit. These requirements might be discouraging to Costco due to language and cultural barriers between U.S and Saudi

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