Document background
The Equity Investment Agreement is a crucial document used when an investor seeks to acquire an ownership stake in a Saudi Arabian company through either primary investment (new shares) or secondary purchase (existing shares). This agreement is particularly important in the Saudi Arabian context as it must balance international investment practices with local regulatory requirements and Shariah principles. It typically comes into play during funding rounds, strategic investments, or when bringing in new shareholders, and must comply with the Saudi Companies Law, Capital Market Law, and where applicable, foreign investment regulations. The agreement covers essential elements such as valuation, investment amount, shareholding percentages, governance rights, and exit provisions, while incorporating necessary Shariah-compliant structures and mechanisms.
