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A Subscription letter documents an investor's commitment to buy shares or other securities in a UAE company, typically during private placements or initial public offerings. It outlines key details like the number of shares, price per share, and total investment amount the subscriber agrees to purchase.

Under UAE Commercial Companies Law, these letters serve as binding agreements between investors and companies, forming part of the required documentation for capital raising. They help companies verify investor eligibility, ensure compliance with Emirates Securities and Commodities Authority regulations, and create clear records of subscription terms and payment obligations.

Use a Subscription letter when raising capital for your UAE company through share offerings, particularly during private placements or before an IPO. This document becomes essential once you've identified potential investors and need to formalize their commitment to purchase shares or securities.

The timing is crucial - prepare Subscription letters early in your fundraising process, right after finalizing share pricing and allocation details. UAE companies often need these letters ready before approaching the Securities and Commodities Authority for approval, and they're mandatory documentation for company formation or capital increase procedures at the Department of Economic Development.

• Basic Share Subscription Letter: Standard format for direct equity investments, stating share quantity, price, and payment terms
• IPO Subscription Letter: Specialized version for public offerings, including retail investor declarations and ESCA compliance statements
• Convertible Securities Letter: Used for convertible bonds or preferred shares, detailing conversion terms and triggers
• Institutional Investor Letter: Enhanced version with additional warranties and sophisticated investor declarations
• Founders' Subscription Agreement: Detailed version for company founders, including vesting schedules and shareholder rights

• Investors: Sign Subscription letters to formally commit to purchasing shares, confirming their investment amount and acceptance of terms
• Company Directors: Review and approve letters, ensuring compliance with UAE capital raising requirements
• Legal Counsel: Draft and customize letters to meet ESCA regulations and protect both company and investor interests
• Investment Banks: Coordinate subscription processes during IPOs or private placements
• Corporate Secretaries: Maintain subscription records and handle filing with regulatory authorities

• Company Details: Gather current share capital, company registration number, and trade license details
• Share Information: Calculate exact number of shares, price per share, and total subscription amount
• Investor Details: Collect subscriber's full legal name, Emirates ID/passport, and contact information
• Payment Terms: Define payment schedule, bank account details, and deadline for funds transfer
• Regulatory Compliance: Ensure all ESCA requirements and UAE Companies Law provisions are addressed
• Signature Requirements: Prepare signature blocks for authorized company representatives and investors

• Party Details: Full legal names and registration details of both company and subscriber
• Share Specifics: Number, class, and price of shares being subscribed to
• Payment Terms: Clear payment schedule, method, and bank account details
• Subscriber Declarations: Confirmation of eligibility under UAE law and ESCA regulations
• Governing Law: Explicit statement of UAE law application and jurisdiction
• Execution Details: Date, signature blocks, and witness requirements
• Representations: Subscriber's acknowledgment of company information and investment risks

A Subscription letter differs significantly from an Engagement Letter, though both document formal business relationships. While Subscription letters focus specifically on share purchases and investment commitments, Engagement letters establish professional service arrangements.

• Purpose and Scope: Subscription letters commit investors to purchasing specific shares at set prices, while Engagement letters outline service terms and fees between professionals and clients
• Legal Requirements: Subscription letters must comply with UAE Securities Authority regulations and Companies Law, whereas Engagement letters follow professional service standards
• Payment Structure: Subscription letters detail one-time share purchases and payment schedules, while Engagement letters typically outline ongoing fee arrangements
• Regulatory Context: Subscription letters are essential for capital market compliance, but Engagement letters focus on professional service obligations and deliverables