Co Investment Agreement Template for Saudi Arabia

A Co Investment Agreement is a legal contract that enables multiple investors to pool resources and jointly invest in specific opportunities while maintaining clear governance and profit-sharing arrangements. In Saudi Arabia, these agreements must comply with local laws including the Companies Law (2015), Foreign Investment Law (2000), and Capital Market Law (2003), while adhering to Shariah principles where applicable.

When do you need this document?

You need a Co Investment Agreement when establishing joint investment ventures with other parties in Saudi Arabia. This includes situations where lead investors invite co-investors to participate in specific deals, when creating special purpose vehicles (SPVs) for large-scale investments, or when foreign investors partner with local entities to meet ownership requirements. The document is particularly crucial for private equity firms, investment funds, and institutional investors collaborating on Saudi market opportunities under Vision 2030 initiatives. You also require this agreement when structuring investments that involve multiple funding rounds or when establishing clear exit mechanisms for all parties involved.

Key legal considerations

Your Co Investment Agreement must clearly define investment amounts, capital call procedures, and timing requirements for each party's contributions. Include detailed provisions for management rights, decision-making processes, and voting mechanisms to prevent disputes. Address profit and loss distribution methods, ensuring compliance with Shariah principles if required by any party. Establish clear exit strategies including tag-along and drag-along rights, transfer restrictions, and valuation methodologies. Include comprehensive representations and warranties from all parties, particularly regarding regulatory compliance and beneficial ownership disclosure. Consider anti-money laundering obligations and ensure proper due diligence procedures are documented. Address competition law compliance to avoid monopolistic arrangements and include dispute resolution mechanisms that account for Saudi Arabian legal procedures.

Legal requirements in Saudi Arabia

Your agreement must comply with the Companies Law (2015) regarding corporate governance and shareholder rights, particularly if establishing SPVs or investing in Saudi companies. Foreign investors must adhere to the Foreign Investment Law (2000), including licensing requirements and sectoral ownership restrictions. Capital Market Law (2003) compliance is mandatory when dealing with securities or public market investments. Ensure Anti-Money Laundering Law compliance through proper party identification and verification procedures. Include Shariah compliance provisions if any party requires Islamic finance structures. Register foreign investment activities with the Saudi Arabian General Investment Authority (SAGIA) where required. Consider tax implications under Saudi tax law and Zakat requirements for Saudi parties. Document all regulatory approvals and ensure ongoing compliance reporting mechanisms are established throughout the investment period.