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A Nominee Agreement lets one party (the nominator) authorize another party (the nominee) to hold assets or rights on their behalf while keeping the true ownership hidden from public view. In Saudi Arabia, these agreements often help international investors work within foreign ownership restrictions, though they must comply with the Kingdom's regulations on beneficial ownership disclosure.

The agreement spells out how the nominee will manage the assets, their duties to the true owner, and how profits or losses flow back to the nominator. While nominee arrangements are common in sectors like real estate and trading, Saudi law requires careful structuring to ensure transparency with authorities and alignment with Shariah principles of clear ownership.

Consider using a Nominee Agreement when expanding your business operations in Saudi Arabia while navigating foreign ownership restrictions. This arrangement proves valuable for international investors looking to participate in sectors with specific local ownership requirements, like retail or certain professional services.

The agreement becomes essential when structuring joint ventures or holding property through a local representative. It helps maintain operational control while ensuring compliance with Saudi regulations. Foreign companies often use these agreements during their initial market entry phase, particularly when testing the market before establishing a permanent legal presence or when speed of market entry is crucial.

• Basic Share Nominee Agreement: Used for holding company shares on behalf of foreign investors, with detailed profit distribution and voting rights provisions
• Property Nominee Agreement: Common in real estate transactions, specifying management of physical assets and rental income arrangements
• Trading Nominee Agreement: Structured for import/export businesses, outlining operational control and profit-sharing mechanisms
• Service Business Nominee: Tailored for professional service firms, detailing management rights and fee distribution
• Investment Nominee Agreement: Focused on financial investments, including specific Shariah-compliant provisions and profit-sharing structures

• Foreign Investors: Act as nominators, entrusting assets or business interests to local nominees while maintaining beneficial ownership
• Saudi Citizens/Companies: Serve as nominees, holding legal title to assets or shares on behalf of foreign investors
• Corporate Lawyers: Draft and structure Nominee Agreements to ensure compliance with Saudi regulations and Shariah principles
• Financial Advisors: Guide parties on tax implications and profit distribution mechanisms
• Regulatory Bodies: Monitor these arrangements to ensure transparency and compliance with foreign investment laws

• Party Details: Gather complete legal names, addresses, and registration numbers of both nominator and nominee
• Asset Information: Document precise details of shares, property, or rights being held under the agreement
• Control Mechanisms: Define voting rights, management authority, and decision-making processes
• Financial Terms: Outline profit distribution, fees, and payment arrangements clearly
• Compliance Check: Verify alignment with Saudi foreign investment laws and Shariah principles
• Duration Terms: Specify agreement length, renewal options, and termination conditions

• Party Identification: Full legal names, addresses, and roles of nominator and nominee with clear designation of rights
• Asset Description: Detailed specification of properties, shares, or rights being held under nomination
• Control Provisions: Clear outline of management rights, voting powers, and operational authority
• Financial Terms: Profit distribution mechanisms, fees, and payment schedules aligned with Shariah principles
• Governing Law: Explicit reference to Saudi law and Shariah compliance requirements
• Termination Clauses: Conditions for ending the agreement and asset transfer procedures

A Nominee Agreement differs significantly from an Agency Agreement in both structure and legal implications within Saudi Arabia's legal framework. While both involve one party acting on behalf of another, they serve distinct purposes and carry different levels of responsibility.

• Control and Ownership: In a Nominee Agreement, the nominee holds legal title to assets while the nominator retains beneficial ownership. An Agency Agreement simply authorizes an agent to act on behalf of a principal without transferring ownership rights.
• Public Disclosure: Nominee arrangements typically keep the true owner's identity private, while agency relationships are usually transparent and disclosed to third parties.
• Legal Liability: Nominees assume direct legal responsibility for held assets, while agents act as representatives with limited liability.
• Duration and Scope: Nominee arrangements often involve long-term asset holding, while agency agreements typically cover specific transactions or time-limited activities.