Article 8 of the Saudi Real Estate Investment Schemes Law
المادة 8 من نظام المساهمات العقارية · الفصل الثاني: الترخيص والاشتراكات
The article allows a participant to join a real estate investment scheme with an in-kind or cash share, and refers to the regulations the type of in-kind share and its conditions.
Official text (Arabic)
This article has not been amended since the law was issued.
يحق للمساهم الاشتراك في المساهمة العقارية، بحصة عينية أو نقدية. وتحدد اللائحة نوع الحصة العينية والشروط الواجب توافرها فيها.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 8 explained in plain English
This article shows the forms of participation in a real estate investment scheme. A participant may join in one of two forms:
- A cash share: a sum of money they pay for their share.
- An in-kind share: property other than money that they contribute to the scheme.
However, the article did not open the door to in-kind shares without controls; it refers to the regulations the type of in-kind share accepted and the conditions that must be met in it. So it should not be assumed that any in-kind property is accepted automatically; the regulations must be consulted to learn what may be contributed and on what conditions.
This provision is linked to Article 9, which divides a scheme's capital into shares equal in value and rights, so whatever the form of participation, shares remain equal in value and rights. It is also linked to Article 7 on the reserve amount that may be added to capital.
Anyone thinking of contributing land or another asset as a share in a scheme should check the regulations' requirements and how their share is calculated, and consult a lawyer specialized in real estate matters before signing.
Practical example
Saad owns a plot of land next to a real estate investment scheme project in Taif, and offered to join with it instead of paying cash. The licensee explained to him that the Law allows in-kind shares, but accepting one depends on its type and the conditions the regulations set.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Dr. Ali Al-Rubaie Law Office and Ittihad Al-Asr Legal Company
Mohammed bin Saleh Al-Qarawi Law and Notary Office, Riyadh
Frequently asked questions about Article 8 of the Saudi Real Estate Investment Schemes Law
Can I join a real estate investment scheme with land or property?
The article allows participation with an in-kind share, and the regulations set the type of in-kind share and the conditions that must be met in it.
Must I pay cash to join a scheme?
No, the article allows participation with an in-kind or a cash share.
Where do I find the conditions for an in-kind share?
The article refers the setting of the type of in-kind share and its conditions to the Implementing Regulations.
More articles on Scheme Capital and Shares
- Article 6
The article provides that a scheme's capital, on which the number and amount of shares are calculated, is set by the estimated cost from a licensed valuation entity after the approval of the Authority and the Capital Market Authority.
يحدد رأس مال المساهمة العقارية، الذي على أساسه يُحتسب عدد الحصص ومقدارها من خلال التكلفة التقديرية من قبل جهة تقييمية مرخصة، بعد موافقة الهيئة وهيئة السوق المال
- Article 7
The article allows the Authority to require a reserve amount, not exceeding 15% of the estimated cost, to be added to a scheme's capital, which may be used only with the participants' assembly's approval.
للهيئة اشتراط إضافة مبلغ احتياطي إلى رأس مال المساهمة العقارية بما لا يتجاوز (15%) من تكلفتها التقديرية، وذلك لمقابلة أي مصاريف إضافية غير متوقعة. ويكون التصرف
- Article 9
The article divides a scheme's capital into shares equal in value and rights, limits each participant's liability to the shares they own, and assigns regulation of the register of participants to the Capital Market Authority.
1- يقسم رأس مال المساهمة العقارية إلى حصص متساوية القيمة والحقوق، وتكون مسؤولية المساهمين في حدود ما يملكون من حصص في المساهمة العقارية. 2- تقوم هيئة السوق الما
- Article 10
The article prohibits lending from a scheme's capital and allows borrowing against the scheme's funds or assets if the scheme agreement includes this, under the conditions the regulations set.
لا يجوز الإقراض من رأس مال المساهمة العقارية، ويجوز الاقتراض بضمان أموال أو أصول المساهمة العقارية على أن يتم تضمين اتفاقية المساهمة ذلك، وتحدد اللائحة الاشتراط
- Article 11
The article makes a scheme's net assets owned by the scheme and bars creditors of participants, the licensee and the scheme manager from any right in its funds or assets except what they own in shares.
يكون صافي أصول المساهمة العقارية من أصول ثابتة نقدية وعينية أو حقوق لدى الغير؛ مملوكة للمساهمة العقارية. وليس لدائني المساهمين أو المرخص له أو مدير المساهمة الع
- Article 12
The article requires the licensee's percentage in the scheme to be no less than the regulations specify and held until the scheme ends, and allows other participants to dispose of their shares under the regulations' conditions.
1- يجب ألا تقل نسبة المرخص له في المساهمة العقارية عن النسبة التي تحددها اللائحة، وأن يحتفظ لنفسه بملكية هذه النسبة حتى انقضاء المساهمة العقارية. 2- يجوز لبقية
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.