Document background
The Loan Agreement Between Parent Company And Subsidiary is a critical document used in corporate group structures operating within Saudi Arabia where intra-group financing is required. This agreement template is specifically designed to facilitate financial arrangements between related companies while ensuring compliance with Saudi Arabian laws, regulations, and Shariah principles. It is commonly used when a parent company provides financing to its subsidiary for operational needs, expansion projects, or working capital requirements. The document incorporates necessary provisions for regulatory compliance, including Saudi Arabian Companies Law requirements, ZATCA regulations, and Islamic finance principles. It includes detailed sections on profit calculation (rather than interest), security arrangements, and corporate governance requirements. This template is particularly relevant for both domestic Saudi Arabian corporate groups and international companies with Saudi Arabian subsidiaries, requiring careful consideration of cross-border financing regulations and foreign investment laws.
