Contractual Joint Venture Agreement Template for Saudi Arabia

The Contractual Joint Venture Agreement is a crucial document for businesses seeking to collaborate in Saudi Arabia without establishing a separate legal entity. This type of agreement is particularly relevant in situations where parties wish to maintain their separate legal identities while working together on specific projects or business ventures. It must comply with Saudi Arabian law, including Sharia principles, the Foreign Investment Law, and the Companies Law. The agreement typically covers essential aspects such as profit-sharing, management structure, operational procedures, and risk allocation. It's commonly used in sectors with foreign investment restrictions and provides flexibility while ensuring regulatory compliance. The document is especially important given Saudi Arabia's Vision 2030 initiative, which encourages foreign investment and private sector participation in various economic sectors.

1. Parties: Identification of the joint venture parties, including full legal names, registration details, and addresses

2. Background: Context of the joint venture formation, including the parties' intentions and general business objectives

3. Definitions and Interpretation: Definitions of key terms and interpretation rules for the agreement

4. Joint Venture Scope and Objectives: Detailed description of the joint venture's business scope, objectives, and territorial coverage

5. Capital Contributions: Details of initial and subsequent capital contributions, including valuation of non-cash contributions

6. Profit and Loss Sharing: Arrangements for sharing profits and losses in compliance with Sharia principles

7. Management and Control: Management structure, decision-making processes, and voting rights

8. Operations and Business Plan: Operational framework and initial business plan implementation

9. Rights and Obligations of Parties: Detailed responsibilities and obligations of each party

10. Financial Matters: Financial management, accounting principles, and banking arrangements

11. Regulatory Compliance: Compliance with Saudi laws, regulations, and Sharia principles

12. Term and Termination: Duration of the joint venture and circumstances for termination

13. Confidentiality: Protection of confidential information and trade secrets

14. Dispute Resolution: Dispute resolution mechanisms compliant with Saudi law

15. Governing Law: Confirmation of Saudi law as governing law and relevant jurisdictional matters

16. General Provisions: Standard boilerplate clauses including notices, amendments, and entire agreement