Which decisions and instruments an overseas owner should hold personally, which can safely be delegated, and the specific ways control is quietly given away.
Delegation is unavoidable when you own an asset in another country, and most of it is harmless. The exceptions are narrow: control of the entity and the title, control of money leaving the project, approval of the budget and the price at which things are sold, and the ability to end an appointment. Each of these is lost through a document signed for convenience rather than through any dramatic event.
Why these keep happening
Control leaks through helpfulness. A broad power of attorney is offered to save you a trip. A bank mandate is arranged so payments do not wait for your morning. A manager is given authority to sign contracts so the project is not held up. Each step is reasonable in isolation, and together they leave someone else able to spend your money, bind your entity and in some structures deal with your asset, while you receive a monthly report describing the results.
1. Granting a broad power of attorney
A power of attorney drafted widely can allow the holder to sign contracts, receive funds, deal with the property and represent you before authorities. Granting one to a manager or partner is efficient and dangerous in equal measure. The specific wording, scope and revocation mechanics are legal matters that must be handled by a licensed Saudi adviser, not copied from another transaction.
- Avoid it by: Grant narrow, purpose-limited authority with an expiry date, and keep disposal and borrowing outside it.
- Proof it is closed: A written record of each authority granted, its scope, its expiry and how it is revoked.
What it costs you: Acts done in your name that you did not approve and may not discover promptly.
2. Letting someone else hold sole signing authority on the project account
Whoever can move money can create facts. Sole authority means certification and payment sit in the same hands, and the only check left is a report prepared by the same party. Dual authorisation above a threshold slows nothing that matters, because certified payments are predictable.
- Avoid it by: Keep release authority or dual signature above a stated amount, and require monthly bank statements.
- Proof it is closed: Bank mandate that matches the agreement, with statements attached to every monthly report.
What it costs you: Payments ahead of progress, misdirected funds, and a reconciliation exercise after the event.
3. Delegating budget approval
If the manager can increase the budget, then the budget is a forecast rather than a limit. Cost control depends on a number that only you can change, with variations above a threshold coming to you individually rather than as a quarterly total already spent.
- Avoid it by: Reserve approval of the budget and of any single variation above a stated figure to yourself.
- Proof it is closed: A change register where every item above the threshold carries your written approval.
What it costs you: A final cost you learn about instead of a budget you set.
4. Delegating the price at which units are sold or let
Pricing decides the return. An agent paid on volume will clear stock at a discount, and a manager measured on occupancy will let cheaply to fill a building. Neither is dishonest; both are responding to the measure you gave them. Price approval, or a floor price you set, keeps the outcome yours.
- Avoid it by: Set floor prices and minimum lease terms in writing, with any departure requiring your consent.
- Proof it is closed: A price schedule signed by you, with exceptions logged and approved individually.
What it costs you: Revenue below the level your appraisal assumed, with the shortfall visible only at the end.
5. Allowing contracts to be signed in your entity without your sight
A manager authorised to sign on behalf of your company can commit you to warranties, indemnities, long lease terms and arbitration clauses. Even where the commercial terms are sensible, obligations you have never read are hard to manage and impossible to price.
- Avoid it by: Require your signature above a value threshold, and your review of any contract with unusual liability terms.
- Proof it is closed: A contracts register listing every agreement signed in the entity name and who signed it.
What it costs you: Liabilities in your entity that you cannot enforce against anyone else.
6. Losing the ability to replace the people running the project
If the agreement has no termination for convenience, no named key personnel, and no obligation to hand over records, drawings, approvals and contract documents, then you cannot change manager without damaging the project. A relationship you cannot leave stops responding to performance concerns.
- Avoid it by: Negotiate termination on notice, named staff with approval over replacements, and a records handover schedule.
- Proof it is closed: A termination clause your lawyer can describe in one paragraph, with the handover list attached.
What it costs you: Continuing with an underperforming manager because the cost of change is higher than the loss.
A short check before you sign
- Every authority you have granted written down, with scope and expiry, and reviewed annually.
- Bank mandate showing dual authorisation above a threshold, with statements in the monthly pack.
- Budget and variation approval above a stated figure reserved to you in writing.
- Floor prices and minimum lease terms set by you, with departures individually approved.
- Contracts register showing who signed what in your entity name.
- Termination for convenience, named key personnel and a records handover schedule in each appointment.
If it has already happened
If you have already delegated more than you intended, begin with an inventory: list every power of attorney, bank mandate and signing authority in existence, and ask your adviser what each one actually permits. Narrow or revoke what is too wide, using the mechanism your adviser confirms, and replace it with purpose-limited authority. Then reset the reporting so bank statements and the contracts register are part of every monthly pack. Do this calmly and in writing, because an abrupt revocation in the middle of a construction stage creates its own problems.
Domira designs, builds and manages projects across Saudi Arabia for owners who are based abroad: land appraisal, feasibility, design, construction, handover and asset management under one accountable contract. Send us the plot or the brief and Domira will put the numbers in front of you before you commit.
Frequently Asked Questions
Should I give a Saudi partner or manager a power of attorney?
Sometimes a narrow, purpose-limited authority is genuinely necessary, for example to complete a specific registration step. A broad general power is a different matter, because it may allow the holder to bind you and deal with assets. Scope, duration and revocation are technical legal questions, so have a licensed Saudi adviser draft and explain any authority before you sign it.
Who should control the bank account on a development project?
Keep release authority, or require dual authorisation above a stated amount, so certification and payment are not in the same hands. Certified construction payments are predictable, so this rarely delays anything. Require project bank statements with every monthly report, and reconcile them against the certified valuations rather than against the summary the manager provides.
How do remote owners usually lose control of their projects?
Not through a single event but through a sequence of conveniences: a wide power of attorney, sole bank authority granted to save time, budget increases approved in retrospect, pricing left to an agent, and an appointment with no practical way to end it. Each step is defensible alone. Together they leave the owner receiving reports rather than making decisions.
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