PAVING THE PATH: DEVELOPING A COMPREHENSIVE LEGAL FRAMEWORK FOR EQUITY CROWDFUNDING IN SAUDI ARABIA UNDER CAPITAL MARKET LAWS. -A COMPARATIVE STUDY FROM A LEGAL PERSPECTIVE-

Abstract

The nascent equity crowdfunding market in Saudi Arabia holds immense potential for fostering innovation and economic growth. However, due to an underdeveloped legal framework and regulatory gaps in Saudi Arabia, this market faces significant challenges that hinder its development and effectiveness. This dissertation dives into these challenges, focusing on areas like the fragmented regulatory landscape, cumbersome company structures, limited shareholder governance tools, investment cap and restrictive offering limits. Drawing from a comparative study of the U.S. Regulation Crowdfunding, the thesis proposes a multifaceted reform plan designed to address these shortcomings and unlock the full potential of equity crowdfunding in Saudi Arabia. Key recommendations include streamlining the regulatory framework into a single, cohesive law, adopting a simplified joint stock company structure for equity crowdfunding ventures, enhancing shareholder governance provisions within the Companies Law, raising the offering limit to allow startups and small and medium-sized companies to raise sufficient capital, clarifying the legal status of crowdfunding platforms, and implementing robust investor protection measures by adopting the US approach to investment caps. By advocating for these reforms, this dissertation aims to contribute to the creation of a vibrant and sustainable equity crowdfunding market in Saudi Arabia, one that can empower entrepreneurs, attract investors, and ultimately drive economic diversification and innovation.

Keywords: Equity Crowdfunding, Crowdfunding Platform, Regulation Crowdfunding, Governance, Entrepreneurs, Start-up, Regulatory Gaps, Investor Protection, Investment Cap.