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Short Term Investment Agreement Template for United Arab Emirates

A comprehensive legal document governed by UAE law that establishes the terms and conditions for a short-term investment arrangement between parties. The agreement details the investment amount, duration, expected returns, and exit mechanisms while ensuring compliance with UAE financial regulations, including those from the Securities and Commodities Authority (SCA) and UAE Central Bank. It incorporates necessary provisions for both conventional and Islamic finance structures, risk disclosures, and investor protection measures as required under UAE legislation. The document is designed to protect all parties' interests while maintaining flexibility for various investment types and sectors within the UAE market.

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What is a Short Term Investment Agreement?

The Short Term Investment Agreement is a crucial document used in the United Arab Emirates for structuring temporary investment relationships, typically ranging from 3 months to 2 years. It is designed to comply with UAE financial regulations, including Federal Law No. 18 of 1993 (Commercial Transactions Law) and relevant SCA regulations. The agreement is particularly relevant in today's dynamic UAE market, where short-term investment opportunities arise across various sectors from real estate to technology. It includes essential provisions for investment terms, risk management, regulatory compliance, and exit mechanisms, while being adaptable to both conventional and Islamic finance structures. This document type is commonly used by financial institutions, investment companies, and individual investors seeking to formalize their short-term investment arrangements while ensuring proper legal protection under UAE law.

What sections should be included in a Short Term Investment Agreement?

1. Parties: Identifies and provides full details of all parties to the agreement

2. Background: Sets out the context and purpose of the investment agreement

3. Definitions: Defines key terms used throughout the agreement

4. Investment Amount and Terms: Specifies the investment amount, payment terms, and investment period

5. Investment Purpose: Details the specific purpose and use of the investment funds

6. Returns and Distribution: Outlines the expected returns, calculation method, and distribution mechanism

7. Rights and Obligations: Details the rights and obligations of all parties during the investment period

8. Representations and Warranties: Contains standard representations and warranties from all parties

9. Exit Provisions: Specifies the mechanisms for investment exit and return of capital

10. Regulatory Compliance: Addresses compliance with UAE laws and regulations

11. Confidentiality: Sets out confidentiality obligations regarding the investment and related information

12. Governing Law and Jurisdiction: Specifies UAE law as governing law and defines jurisdiction for disputes

13. Execution: Formal execution provisions and signature blocks

What sections are optional to include in a Short Term Investment Agreement?

1. Security Arrangements: Include when the investment is secured against specific assets or guarantees

2. Shariah Compliance: Include for Islamic investment structures requiring Shariah compliance

3. Tax Provisions: Include when specific tax arrangements or implications need to be addressed

4. Force Majeure: Include when specific force majeure provisions are required beyond standard provisions

5. Assignment Rights: Include when transfer or assignment of investment rights needs to be specifically addressed

6. Conditions Precedent: Include when investment is subject to specific conditions being met before becoming effective

What schedules should be included in a Short Term Investment Agreement?

1. Investment Terms Schedule: Detailed terms of the investment including amounts, dates, and returns calculation

2. Payment Schedule: Timeline and mechanics for investment payments and distributions

3. Due Diligence Results: Summary of due diligence findings and any resulting conditions

4. Risk Disclosure: Detailed disclosure of investment risks specific to the transaction

5. KYC Documentation: Required know-your-customer and anti-money laundering documentation

6. Security Details: Details of any security or collateral arrangements if applicable

Authors

Alex Denne

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

Publisher

Ƶ

Document Type

Option Agreement

Cost

Free to use

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