Appointing A General Manager To A Saudi Joint Venture

Corporate authority, sponsorship and the limits of secondment: the structuring question that arises for groups entering the Kingdom through a UAE regional company.

01             Background

Foreign groups expanding into the Gulf commonly establish a regional com-pany in the UAE and enter Saudi Arabia through it. Where a joint venture is then formed in the Kingdom with a local partner, it is frequently proposed that the group’s UAE-based regional or country manager be appointed Gen-eral Manager or Managing Director of the joint venture, reporting to the board and holding authority to sign and commit the company. The analysis applies wherever the employer sits outside the Kingdom.

The question that follows is whether that individual must be employed dir-ectly by the Saudi joint venture, or whether the existing UAE employment can be preserved and the individual seconded into the Kingdom. The answer engages Saudi corporate law, Saudi employment and immigration law, and the tax