Corporate Commercial & Corporate Structuring
Our Corporate Practice at Al Tamimi & Company has over 120 specialist lawyers across our regional network of offices.
Al Tamimi & Company is one of the very few law firms in the Middle East and North Africa (‘MENA’) with a dedicated Corporate Structuring practice. Our practice prides itself on having the capability to provide a full-service solution to all clients across the region.
We have advised on a wide variety of corporate structuring and restructuring related projects and specialise in design and implementation of corporate structures. In particular, we design a structure for our client, however complex their goal may be – in a legally compliant manner with their commercial goal in mind, and we assist them with implementation however challenging that implementation may be.
The strength of our team comes not only from our in-depth knowledge of relevant laws and regulations in every jurisdiction in which we have a presence, but also from our awareness of the regional regulatory practices which we have developed by having very close working relationships with regulatory authorities and Ministries in the entire MENA region.
Given changes in the global financial landscape in recent years, our team of lawyers have worked extensively with clients in the area of cross border corporate restructuring and reorganisation.
We have handled many of the largest and most significant M&A deals in the Middle East, acting as lead and local counsel. Our culturally diverse team includes Arabic lawyers as well as English and common law qualified lawyers from leading international firms. This gives us the expertise to match large international firms, but with the added benefit of in-depth regional understanding.
M&A deals require wide-ranging specialist legal inputs across different legal practice areas. In cross-border transactions we offer our clients an unequalled combination of specialist legal skills, and a network of lawyers practicing in 10 Middle Eastern countries. Our regional team work seamlessly across our network of offices.
Our M&A team has extensive cross-border transactional experience and is well versed in advising on both public and private M&A deals. Deals handled include acquisitions, disposals, joint ventures, mergers and strategic alliances.
Our clients include global corporations, GCC listed and private corporations, governmental authorities, business enterprises, private equity firms and financial institutions.
We are well known for our cross-border, local and international capital markets legal advisory in the wider MENA region. We are the only law firm able to provide securities law advice across 10 jurisdictions in the Middle East, offering both domestic and international clients a full-service practice.
Our key strength lies in our ability to give on-the-ground capital markets advice tailored to specific industry sectors underpinned by our unrivalled relationships with governments, financial services regulators and stock exchanges. We offer tailor-made relationship management to get the deal done efficiently and on time. We have a team of locally and internationally qualified lawyers in all offices providing international quality legal advice but with local knowledge.
We are particularly visible and strong on initial public offerings (IPOs), capital increases in public M&A, share buy-backs and rights issues. The team excels in all types of public company matters from ECM to public M&A and corporate governance, regulatory and ESG advisory.
Our IPO team provides all ‘day to day’ and strategic long term advice for our IPO clients from structuring the company months in advance to public offering up to post subscription services and assisting newly listed companies to adapt to new rules (such as corporate governance and public disclosure requirements).
When it comes to IPOs, we have an enviable track record of experience. In the UAE in particular, we have provided advice to either issuers or bookrunners in the vast majority of UAE IPOs since 2006, providing innovative and unprecedented legal and corporate structuring advice and regulatory know-how that has contributed significantly to the success of the IPOs. We act for either issuers (government or private) or banks/financial advisers and the team is noted for its work on government privatisations.
The government structure in the KSA is the Monarchy system. The king is the head of state and government overseeing the execution of regulations and directing the state’s general policy while guaranteeing the coordination and collaboration among governmental agencies.
The king receives recommendations from KSA’s ultimate governing council, the Council of Ministers, composed of prominent officials and specialists. Several governmental agencies and councils help the Council of Ministers, including the Shura Council, an advisory body that plays a role in the legislative process.
The Ministry of Investment;
The Ministry of Commerce;
The Saudi General Authority of Foreign Trade;
The Saudi Exports Development Authority;
The Saudi Authority for Intellectual Property;
The Economic Cities and Special Zones Authority;
KSA has entered into a number of trade and bilateral investment agreements in efforts to protect investment and encourage the adoption of market-oriented domestic policies that treat private investment in an open, transparent, and non-discriminatory manner.
Existing Trade Agreements:
Agreement on Facilitating and Developing Inter-Arab Trade (Major Arab Free Trade Area) entered into force on 1 January 1981;
GCC Economic Agreement entered into force on 1 November 1981;
GCC Free Trade Agreement concluded with Singapore and entered into force on 1 September 2013;
GCC Free Trade Agreement with EFTA Countries entered into force on 1 July 2015; and
Agreement on Liberalization of Trade in Services among Arab States entered into force on 14 October 2019.
Bilateral Investment Treaties:
Philippines – KSA BIT (1994) signed on 17 October 1994 and entered into force on 11 November 1996;
China – KSA BIT (1996) signed on 29 February 1996 and entered into force on 1 May 1997;
Italy – KSA BIT (1996) signed on 10 September 1996 and entered into force on 22 May 1998;
Germany-KSA BIT (1996) signed on 29 October 1996 and entered into force on 8 January 1999;
Malaysia – KSA BIT (2000) signed on 25 October 2000 and entered into force on 28 December 2001;
Taiwan Province of China – KSA BIT (2000) signed on 31 October 2000 and has not yet entered into force;
BLEU (Belgium-Luxembourg Economic Union) – KSA BIT (2001) signed on 22 April 2001 and entered into force on 11 June 2004;
Austria-KSA BIT (2001) signed on 30 June 2001 and entered into force on 25 July 2003;
South Korea - KSA BIT (2002) signed on 4 April 2002 and entered into force on 19 February 2003;
France – KSA BIT (2002) signed on 26 June 2002 and entered into force on 18 March 2004;
Indonesia – KSA BIT (2003) signed on 15 September 2003 and entered into force on 5 July 2004;
Azerbaijan - KSA BIT (2005) signed on 9 March 2005 and entered into force on 20 May 2011;
Philippines - KSA BIT (2005) signed on 2 October 2005 and has not yet entered into force;
India-KSA BIT (2006) signed on 25 January 2006 and entered into force on 20 May 2008;
Switzerland – KSA BIT (2006) signed on 1 April 2006 and entered into force on 9 August 2008;
Spain – KSA BIT (2006) signed on 9 April 2006 and entered into force on 14 December 2016;
Singapore – KSA BIT (2006) signed on 10 April 2006 and entered into force on 5 October 2007;
Turkey – KSA BIT (2006) signed on 8 August 2006 and entered into force on 5 February 2010;
Sweden – KSA BIT (2008) signed on 11 March 2008 and entered into force on 1 October 2009;
Ukraine – KSA (2008) signed on 9 April 2008 and entered into force on 18 February 2009;
Belarus – KSA (2008) signed on 20 July 2009 and entered into force on 7 August 2010;
Czech Republic – KSA BIT (2009) signed on 18 November 2009 and entered into force on 13 March 2011;
Uzbekistan – KSA BIT (2011) signed on 6 June 2011 and entered into force on 24 January 2014;
Japan – KSA BIT (2013) signed on 30 April 2013 and entered into force on 7 April 2017;
Jordan – KSA BIT (2017) signed on 27 March 2017 and has not yet entered into force.
Iraq – KSA BIT (2019) signed on 17 April 2019 and has not yet entered into force.
The main implications of bilateral investment treaties entered into by KSA include the following substantive obligations that both KSA and the other contracting country undertake towards investors from the other contracting country:
Treating foreign investors’ investments fairly and equitably, i.e., not taking unreasonable or discriminatory measures and treating investments of foreign investors at least as favorably as investments from its own nationals and nationals of third states.
Not nationalizing or expropriating investments from foreign investors, unless the measures taken are non-discriminatory, taken in the public interest, and while observing due process, are taken against payment of prompt, adequate, and fair compensation. Importantly, regulations substantially negatively affecting the value of an investment can qualify as an expropriation for these purposes.
Allowing funds relating to investments to be freely transferred by foreign investors without delay, which includes protection against foreign exchange restrictions. Such funds would generally include:
The main investment amounts and any additional amounts added thereto.
Return on investment of such amounts.
Amounts paid to settle loans.
Any revenue generated from the liquidation or disposal of part or all of the investments.
Remuneration and allowances paid to citizens of the other contracting country whose work is connected to the investments made in the other state.
Any compensation paid by a contracting country to the other in the event of any damage occurring to the investments as a result of acts of war, emergency state, acts of terror or armed conflicts or similar situations.
Business Structures Available for Foreign Companies:The New Companies Regulations provide the following types of companies in KSA:
General partnership.
Limited partnership.
Joint stock company.
Simplified joint stock company.
Limited liability company.
Foreign businesses can operate in KSA if they obtain a license issued by the Ministry of Investment of Saudi Arabia (“MISA” formerly named SAGIA).
Joint Stock Company
A Joint Stock Company (“JSC”) is one of the most regulated company types in KSA through regulatory requirements for incorporation and the degree of control/involvement of the Ministry of Commerce (“MOC”).
The MISA must approve the establishment of the JSC if a foreign party is to have an interest, by granting a license authorizing the foreign party’s investment in the company.
It's suitable for larger businesses with substantial capital requirements. It can be publicly listed or closed (non-public) and may have foreign ownership subject to sector-specific regulations.
Limited Liability Company
This is one of the most common structures chosen by foreign investors. It is allowed to have 100% single foreign ownership as long as the proposed practice does not require a minimum ownership of a Saudi partner. The liability of each shareholder is limited to their respective contributions. Foreign ownership can be up to 100% in certain sectors. MISA registration/license is required for a business to establish with 100% foreign ownership in KSA.
Limited Liability Company licensing requirements:
Minimum Cash Capital: There is no minimum share capital requirement (unless the proposed practice requires so). However, MISA expects the share capital to be sufficient to the purpose of the company.
Foreign investors must commit to achieving the Saudization (Nitaqat) percentage set by the Ministry of Human Resources and Social Developments. They should also provide a plan to enable Saudi nationals to be employed in the company.
Branch Office
Foreign companies can establish a branch in KSA to engage in activities similar to those of their parent company. However, branches are generally limited to conducting activities related to the parent company's field of expertise.
Foreign investors have the option to establish a branch instead of a Limited Liability Company (LLC) for business in KSA. A branch acts on behalf of the parent foreign company and lacks independent legal status within KSA. Registering a branch involves a procedure similar to that of an LLC, following the issuance of foreign investment licenses by MISA and commercial registration certificates by MOC.
The parent company retains liability for the branch's activities in KSA. Unlike an LLC, the paid-up capital of a branch doesn't limit liability; it primarily serves as security for the Saudi market.
Taxation and other considerations treat a permanent branch and a 100% foreign-owned LLC equally. After registration, the branch must apply for various governmental files and documents to achieve full operational status, which might take a few to several months.
Branch Office Licensing Requirements: When opening a branch office in KSA, the foreign company will have to satisfy specific requirements. For example, it is necessary to provide a minimum share capital that is sufficient for the business.
The companies law requires annual filing obligations to some of the governmental authorities such as MOC and ZATCA. Further, the laws specify penalties for failure of submissions or under the discretion of the authorities.
