Simple Equity Investment Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

Simple Equity Investment Agreement

"I need a Simple Equity Investment Agreement for a Saudi tech startup receiving a 5 million SAR investment from a foreign institutional investor in March 2025, with specific provisions for board representation and anti-dilution protection."

Document background
The Simple Equity Investment Agreement is a fundamental legal instrument used in Saudi Arabia when an investor (either local or foreign) seeks to acquire an equity stake in a company. This document is essential for transactions requiring clear documentation of investment terms, shareholding structures, and compliance with Saudi regulations. The agreement must align with Saudi Companies Law, Capital Market regulations, and Sharia principles, making it suitable for both private and institutional investors. It typically includes provisions for share valuation, transfer mechanisms, shareholder rights, and corporate governance arrangements. The document is particularly relevant for growing companies seeking capital injection, established businesses looking for strategic investors, or foreign entities entering the Saudi market through equity investments.
Suggested Sections

1. Parties: Identification of the investor(s) and the company, including full legal names, commercial registration numbers, and authorized representatives

2. Background: Context of the investment, brief description of the company's business, and purpose of the investment

3. Definitions: Key terms used throughout the agreement, including specific Saudi legal and regulatory terms

4. Investment Terms: Details of the investment amount, number of shares, price per share, and payment terms

5. Closing Conditions: Prerequisites for completing the investment, including regulatory approvals and corporate authorizations

6. Representations and Warranties: Standard statements by both parties regarding their capacity, authority, and compliance with Saudi law

7. Company Covenants: Ongoing obligations of the company regarding business operations and investor rights

8. Shareholder Rights: Voting rights, dividend rights, and other shareholder privileges under Saudi Companies Law

9. Regulatory Compliance: Commitments regarding compliance with Saudi laws, including Companies Law and Sharia principles

10. Confidentiality: Obligations regarding non-disclosure of confidential information

11. Governing Law and Jurisdiction: Confirmation of Saudi law as governing law and jurisdiction of Saudi courts

12. Execution: Signature blocks and execution requirements compliant with Saudi law

Optional Sections

1. Board Representation: Include when the investment size warrants board representation rights

2. Tag-Along Rights: Include for minority investor protection in case of majority stake sale

3. Anti-dilution Protection: Include when protecting against future down rounds

4. Conversion Rights: Include if the investment involves preferred shares convertible to common shares

5. Exit Rights: Include specific provisions for IPO or sale scenarios

6. Shariah Compliance Declaration: Include when explicitly required by the investor or company policy

7. Foreign Investment Provisions: Include when the investor is non-Saudi to address SAGIA requirements

Suggested Schedules

1. Schedule 1 - Company Information: Detailed company information including corporate structure, capitalization table, and regulatory licenses

2. Schedule 2 - Investment Details: Detailed breakdown of the investment structure, share calculations, and valuation metrics

3. Schedule 3 - Closing Checklist: List of required documents and actions for closing

4. Schedule 4 - Corporate Resolutions: Forms of required corporate approvals and shareholder resolutions

5. Schedule 5 - Disclosure Schedule: Company disclosures against representations and warranties

6. Appendix A - Share Certificate Form: Template for new share certificates to be issued

7. Appendix B - Articles Amendments: Required amendments to the company's Articles of Association

8. Appendix C - Regulatory Forms: Required forms for Ministry of Commerce and Investment registration

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

Technology

Real Estate

Manufacturing

Healthcare

Education

Retail

Financial Services

Transportation

Energy

Construction

Agriculture

Professional Services

Hospitality

E-commerce

Relevant Teams

Legal

Finance

Corporate Development

Investment

Compliance

Executive Leadership

Board Secretariat

Corporate Governance

Shareholder Relations

Risk Management

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Legal Officer

Investment Director

Corporate Lawyer

Legal Counsel

Investment Manager

Business Development Director

Company Secretary

Compliance Officer

Board Member

Managing Director

Finance Director

Corporate Development Manager

Shareholder Relations Manager

Industries
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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