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Intercompany Service Agreement for Saudi Arabia

Intercompany Service Agreement Template for Saudi Arabia

A comprehensive legal agreement governed by Saudi Arabian law that establishes and regulates the provision of services between related companies within the same corporate group. The document outlines the scope of services, pricing mechanisms, service levels, and operational requirements while ensuring compliance with Saudi commercial regulations, Sharia principles, and relevant tax and transfer pricing requirements. It includes provisions for governance, performance measurement, dispute resolution, and termination, all structured to meet local regulatory requirements and business practices in Saudi Arabia.

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What is a Intercompany Service Agreement?

The Intercompany Service Agreement is essential for corporate groups operating in Saudi Arabia who need to formalize and document the provision of services between related entities. This agreement is particularly important in the context of Saudi Arabian regulatory requirements, where proper documentation of related party transactions is crucial for corporate governance, tax compliance, and transfer pricing purposes. The document should be used whenever one group entity provides services to another, whether these are management services, technical support, shared services, or other forms of operational support. It must comply with Saudi Arabian law, including Sharia principles, and typically includes detailed service descriptions, performance metrics, pricing mechanisms, and governance frameworks. The agreement is particularly relevant in the context of Saudi Arabia's increasing focus on transfer pricing documentation and related party transaction transparency.

What sections should be included in a Intercompany Service Agreement?

1. Parties: Identification of the service provider and service recipient companies, including registration details and addresses

2. Background: Context of the agreement, relationship between the parties, and purpose of the service arrangement

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

4. Scope of Services: Detailed description of services to be provided, including service levels and delivery standards

5. Service Provider Obligations: Key responsibilities and commitments of the service provider

6. Service Recipient Obligations: Key responsibilities and commitments of the service recipient

7. Fees and Payment Terms: Service fees, calculation methodology, invoicing, and payment terms

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

9. Confidentiality: Protection of confidential information exchanged between parties

10. Intellectual Property: Ownership and usage rights of IP created or used in service delivery

11. Compliance with Laws: Obligation to comply with Saudi laws, including Sharia principles

12. Dispute Resolution: Process for resolving disputes under Saudi law

13. General Provisions: Standard legal provisions including notices, amendments, and governing law

What sections are optional to include in a Intercompany Service Agreement?

1. Personnel and Secondment: Used when services involve staff deployment between companies, addressing employment and liability issues

2. Data Protection: Required when services involve processing of personal or sensitive data

3. Foreign Currency Provisions: Needed when payments are made in non-Saudi Riyal currencies

4. Force Majeure: Optional but recommended to address circumstances beyond parties' control

5. Insurance: Required when services involve significant operational risks

6. Anti-corruption: Recommended when dealing with international companies or public sector entities

7. Transfer Pricing Compliance: Required for cross-border intercompany services or high-value domestic arrangements

What schedules should be included in a Intercompany Service Agreement?

1. Schedule 1 - Service Description: Detailed description of each service category and specific deliverables

2. Schedule 2 - Service Levels: Performance metrics, quality standards, and reporting requirements

3. Schedule 3 - Fee Schedule: Detailed breakdown of fees, calculation methods, and any variable components

4. Schedule 4 - Key Personnel: List of key staff involved in service delivery and their roles

5. Schedule 5 - Technical Requirements: Technical specifications and systems requirements for service delivery

6. Appendix A - Service Request Form: Template for requesting additional or modified services

7. Appendix B - Performance Report Template: Standard format for service performance reporting

8. Appendix C - Transfer Pricing Documentation: Required documentation to support transfer pricing compliance

Authors

Alex Denne

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

Jurisdiction

Saudi Arabia

Publisher

Ƶ

Document Type

Service Agreement

Cost

Free to use
Relevant legal definitions


















































Clauses







































Relevant Industries

Financial Services

Manufacturing

Technology

Oil & Gas

Healthcare

Retail

Telecommunications

Professional Services

Construction

Real Estate

Transportation & Logistics

Mining

Pharmaceutical

Relevant Teams

Legal

Finance

Tax

Compliance

Operations

Commercial

Procurement

Risk Management

Internal Audit

Corporate Governance

Shared Services

Treasury

Accounting

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Legal Director

Head of Compliance

Tax Director

Transfer Pricing Manager

Commercial Director

Operations Director

Finance Manager

Legal Counsel

Company Secretary

Head of Shared Services

Group Financial Controller

Risk Manager

Internal Audit Manager

Corporate Governance Officer

Procurement Manager

Service Delivery 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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