Investment Owners Contract Template for Saudi Arabia

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Key Requirements PROMPT example:

Investment Owners Contract

"I need an Investment Owners Contract under Saudi Arabian law for a technology startup receiving Series A funding from multiple international investors, with specific provisions for Shariah compliance and protection of intellectual property rights."

Document background
The Investment Owners Contract serves as a foundational document for structuring investment relationships in Saudi Arabia, particularly in light of the Kingdom's Vision 2030 economic transformation program. This contract type is essential when establishing or documenting investment arrangements between multiple parties, whether domestic or foreign investors, and is commonly used in both private and institutional investment scenarios. The document must comply with Saudi Arabian investment laws, including the Foreign Investment Law (where applicable) and Companies Law, while adhering to Shariah principles. It typically includes detailed provisions for capital contributions, profit-sharing mechanisms, management rights, transfer restrictions, and exit strategies, making it suitable for various investment structures from simple partnerships to complex corporate arrangements. The Investment Owners Contract is particularly relevant in the context of Saudi Arabia's evolving investment landscape, where increasing foreign investment and economic diversification initiatives require robust legal frameworks to protect all parties' interests.
Suggested Sections

1. Parties: Identification of all investment parties, including full legal names, addresses, and registration details

2. Background: Context of the investment arrangement, purpose, and brief description of the business venture

3. Definitions: Detailed definitions of key terms used throughout the agreement

4. Investment Structure: Details of the investment amount, ownership percentages, and capital structure

5. Subscription and Payment Terms: Terms and conditions for investment subscription and payment schedules

6. Representations and Warranties: Statements of fact and assurances from all parties regarding their capacity, authority, and compliance

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

8. Profit Distribution: Methods and timing of profit distribution, aligned with Sharia principles

9. Transfer Restrictions: Limitations on transfer of ownership interests and right of first refusal provisions

10. Reporting and Information Rights: Financial reporting obligations and investor information rights

11. Confidentiality: Protection of confidential information and trade secrets

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

13. Dispute Resolution: Mechanisms for resolving disputes, including jurisdiction and applicable law

14. General Provisions: Standard boilerplate clauses including notices, amendments, and severability

Optional Sections

1. Tag-Along Rights: Optional protection for minority investors to join in sale of majority stake

2. Drag-Along Rights: Optional right for majority investors to force minority holders to join in sale

3. Anti-dilution Provisions: Protection against ownership dilution in future funding rounds

4. Board Representation: Rights and procedures for board membership if applicable

5. Islamic Finance Compliance: Detailed provisions ensuring Sharia compliance, required if specifically structured as Islamic investment

6. Foreign Investment Provisions: Additional provisions required when foreign investors are involved

7. Exit Strategy: Specific provisions for IPO, sale, or other exit mechanisms

8. Non-Competition: Restrictions on competitive activities, if relevant to the investment relationship

Suggested Schedules

1. Schedule 1 - Investment Details: Detailed breakdown of investment amounts, valuation, and ownership structure

2. Schedule 2 - Business Plan: Detailed business plan and financial projections

3. Schedule 3 - Shareholders Information: Complete details of all shareholders and their holdings

4. Schedule 4 - Key Performance Indicators: Specific performance metrics and targets

5. Schedule 5 - Reserved Matters: List of decisions requiring special approval

6. Appendix A - Corporate Documents: Copies of relevant corporate registration documents and licenses

7. Appendix B - Shariah Compliance Certificate: If applicable, certification of Shariah compliance from recognized authority

8. Appendix C - Valuation Report: Independent valuation report if applicable

9. Appendix D - Required Regulatory Approvals: Copies of governmental and regulatory approvals

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries

Real Estate

Technology

Healthcare

Manufacturing

Financial Services

Energy

Infrastructure

Telecommunications

Retail

Education

Tourism

Agriculture

Mining

Transportation

Professional Services

Relevant Teams

Legal

Finance

Compliance

Corporate Governance

Investment

Risk Management

Business Development

Corporate Affairs

Treasury

Shariah Advisory

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Investment Manager

Legal Counsel

Corporate Secretary

Compliance Officer

Board Director

Investment Analyst

Financial Controller

Risk Manager

Business Development Director

Corporate Governance Officer

Shariah Compliance Officer

Portfolio Manager

Managing Partner

Industries
Saudi Arabian Investment Law (Royal Decree No. M/1): The primary legislation governing investment activities in Saudi Arabia, establishing basic rules and guarantees for both local and foreign investors
Companies Law (Royal Decree No. M/3): Regulates the formation, operation, and dissolution of companies in Saudi Arabia, including provisions for shareholder agreements and corporate governance
Capital Market Law (Royal Decree No. M/30): Regulates securities activities, offering and trading of securities if the investment involves publicly traded companies
Foreign Investment Law (Royal Decree No. M/1): Specific regulations governing foreign investment in Saudi Arabia, including restrictions, requirements, and incentives
Anti-Money Laundering Law (Royal Decree No. M/20): Ensures compliance with AML regulations in investment transactions and business relationships
Commercial Courts Law (Royal Decree No. M/93): Governs dispute resolution mechanisms and enforcement of commercial contracts in Saudi Arabia
Vision 2030 Investment Regulations: Recent reforms and regulations aligned with Saudi Vision 2030, affecting investment opportunities and requirements
Saudi Arabian Monetary Authority (SAMA) Regulations: Relevant banking and financial regulations that may affect investment transactions and financial aspects of the contract
Competition Law (Royal Decree No. M/75): Ensures compliance with competition regulations in investment arrangements and prevents monopolistic practices
Law of Commercial Papers (Royal Decree No. M/37): Governs commercial papers and financial instruments that might be part of the investment arrangement
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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