Al Madani & Co. Law Firm & Legal Consultants
Expansion of a Cross-Regional Contracting Company in Saudi Arabia with the Help of Al-Madani & Partners
A cross-regional contracting company was founded in the United States. With great ambition and determined management, the company sought to expand its operations in the Middle East, identifying Saudi Arabia as the ideal destination for this expansion. Saudi Arabia is considered a promising market for foreign companies, thanks to the lucrative advantages offered to investors. However, the company faced significant challenges, especially with its limited budget as an “On shelf” company.
Challenges
The company’s management understood that establishing a company in Saudi Arabia required meeting stringent conditions imposed by the Ministry of Investment, which carefully examines the company’s budget size, previous projects, and achievements before approving the establishment request. Without these, the request would be denied. These challenges seemed like tough obstacles to overcome. This is where Al-Madani & Partners came in. The company’s management approached us to present their ideas and plans and to leverage our expertise in establishing their company in the kingdom.
Sound Strategy: Proving Credibility
Our specialized team in company establishment proposed a sound strategy to prove the company’s credibility. We began by demonstrating that the company was not merely a local entity but a cross-regional one. We gathered necessary evidence of the company’s active branch in Doha and presented this information to the ministry to illustrate that Saudi Arabia was the natural next step for expansion. This was the first step in changing the ministry’s perception of the company.
Expanding Activities: Overcoming Obstacles
Our team suggested expanding the company’s scope of activities in a smart way. We added several activities that did not require special classification, such as general construction of residential and government buildings, road and bridge construction, water line installations, and landscape design. This step facilitated the registration process and reduced legal obstacles.
Obtaining Permits: Overcoming Barriers
The company faced a hurdle related to obtaining a special classification for contracting activities from the Ministry of Municipal, Rural Affairs, and Housing. Here, our team’s expertise shone. We gathered all the necessary documents and submitted a comprehensive application for this classification. Thanks to our legal expertise, we were able to secure the necessary approvals without significant delays.
Administrative Procedures: Precise Follow-Up
Once the company was ready to operate in Saudi Arabia, our team followed up on the document submission procedures to prepare the company for securing the best projects. We monitored government tenders published in the official gazette and the Etimad platform and submitted documents timely. Due to our meticulous follow-up, one of the major projects was awarded to the company.
Compliance with Saudization: Achieving Balance
We understood the importance of complying with the Saudization system, which sets the percentage of Saudi employees required in each company. We worked diligently to maintain this required ratio, ensuring that the company adhered to all employment-related laws and regulations. On the other hand, we submitted applications to obtain additional work visas for expatriates through the Ministry of Human Resources, while maintaining the required Saudization ratio.
Ensuring Stability: The Desired Success
Thanks to the significant efforts of our team, the company was registered easily without discussing previous projects. The company was established with a modest capital of only 25,000 SAR. We successfully appointed the official manager of the company in the kingdom, granting him all necessary authorities. Our team also managed to open a bank account for the company, register its signature with the Chamber of Commerce, and issue a special residence permit for the manager without needing an actual office for the company. Due to our research and submissions for government tenders, and with the commercial registration, the company was able to bid on one of the largest projects in the kingdom, the Neom City project (Gaga Project).
This success story demonstrates how a strong legal team can achieve significant accomplishments for ambitious companies. Through proper planning, precise knowledge of regulations, and sound legal procedures, our team was able to overcome challenges and facilitate the company’s expansion in a complex market like Saudi Arabia. This experience proved that collaborating with professional legal advisors can make the difference between failure and success, turning obstacles into opportunities and achieving company ambitions in the best possible ways.
