The stages from first contact to a signed joint venture or operating agreement with a PIF company, with the documents and approvals each step requires.
Partnerships with companies owned by the Public Investment Fund are formed case by case, usually starting with a business development conversation and ending, if successful, with a joint venture, operating agreement or co-investment. The process is thorough and often slow, because PIF companies apply formal governance and due diligence. Knowing the stages lets you prepare the evidence each one needs.
Before stage one
PIF companies look for partners who bring something they lack: technology, operating expertise, brands, market access or specialised capacity. Before approaching one, be clear about what you bring, what you want in return and what you will not accept, such as a minority position without key rights.
- A clear statement of the capability you bring.
- A target PIF company whose strategy needs that capability.
- Your preferred structure and your minimum acceptable terms.
- Board support for a long negotiation.
- Advisers experienced in Saudi corporate transactions.
Stage 1: Choose the right PIF company
Read PIF's strategy and the published plans of its portfolio companies, and identify the one whose needs match your capability. Approaching the fund itself is rarely the right start for an operating partnership.
- Deliverable: A shortlist of one or two target companies with the reasons for each.
- Owner: Strategy lead.
- Approval gate: A documented match between their stated needs and your capability.
Stage 2: Make first contact
Approach the company's business development or partnerships team with a concise proposal. Introductions through MISA or industry events can help, but the proposal must stand on its own.
- Deliverable: A first meeting and agreed next steps.
- Owner: Senior executive.
- Approval gate: Interest confirmed in writing.
Stage 3: Sign confidentiality and exchange information
Sign a non-disclosure agreement and share information on capability, financials and proposed terms. Expect detailed questions.
- Deliverable: Signed NDA and an exchanged information package.
- Owner: Deal team.
- Approval gate: Both sides agree to proceed to terms.
Stage 4: Agree a term sheet or memorandum
Negotiate the main terms: structure, contributions, governance, economics, exclusivity and exit. A non-binding memorandum is common at this stage.
- Deliverable: A signed term sheet or memorandum of understanding.
- Owner: Deal team with counsel.
- Approval gate: Board approval of the key terms.
Stage 5: Complete due diligence
Both sides examine each other: legal, financial, technical and compliance reviews. PIF companies apply thorough governance and integrity checks.
- Deliverable: Due diligence reports and resolved issues.
- Owner: Advisers.
- Approval gate: No unresolved issue that affects value or feasibility.
Stage 6: Negotiate definitive agreements
Draft and negotiate the joint venture or shareholders' agreement, operating agreements and related contracts, including dispute resolution.
- Deliverable: Agreed definitive documents.
- Owner: Counsel.
- Approval gate: Approvals from both boards and any regulators.
Stage 7: Close and set up the venture
Sign, satisfy conditions, register the entity and start operations with an agreed business plan and governance calendar.
- Deliverable: A registered, funded and operating venture.
- Owner: Venture management team.
- Approval gate: First board meeting held and business plan approved.
Handovers between stages
The difficult handover is from the deal team to the venture management team. Negotiators know why each clause exists; managers inherit a document. Brief managers on the intent behind governance, reserved matters and reporting duties before closing.
How you know it is finished
The partnership is established when the venture is operating under agreed governance, both partners are delivering their contributions and reporting has begun. The first annual review, comparing results with the plan, is the first real test of the partnership.
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Frequently Asked Questions
How long does it take to partner with a PIF company?
It varies widely with the size and complexity of the deal. Supply agreements can be concluded relatively quickly, while joint ventures involving significant capital, technology transfer or regulatory approvals usually take many months. Thorough due diligence and governance approvals are standard. Plan management time and advisory budgets for a long process.
What do PIF companies look for in a foreign partner?
They typically look for capabilities they cannot easily build: technology, operating expertise, brands, market access or specialised capacity, together with financial strength and a clean compliance record. Willingness to localise, train Saudi staff and invest for the long term is often important. Each company's strategy shows which capabilities it values most.
Can a foreign company hold a majority in a joint venture with a PIF company?
It depends on the deal, the sector and the partner's strategy. Some ventures have foreign majority partners, especially where the foreign side brings key technology or operations, while others are PIF-controlled. The structure is negotiated. A lawyer should advise on governance rights, reserved matters and exit provisions regardless of the shareholding.
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