Asset Purchase Term Sheet Template for the United Arab Emirates

An Asset Purchase Term Sheet is a preliminary legal document that outlines the key commercial and structural terms for acquiring specific assets in the United Arab Emirates. Under UAE Commercial Transactions Law and Civil Code provisions, this document serves as a non-binding framework that guides parties through complex asset acquisition negotiations while ensuring compliance with federal and emirate-level regulations.

When do you need this document?

You need an Asset Purchase Term Sheet when negotiating the acquisition of business assets such as equipment, intellectual property, real estate, or operational divisions in the UAE. This document is essential when foreign investors are purchasing UAE assets subject to Foreign Direct Investment regulations, when companies are restructuring operations across different emirates, or when parties require a structured framework before committing to extensive due diligence. It's particularly valuable in sectors with specific regulatory requirements, such as healthcare, education, or telecommunications, where asset transfers must comply with sector-specific licensing and ownership restrictions.

Key legal considerations

Your Asset Purchase Term Sheet must address several critical legal elements under UAE law. The purchase price structure should account for Value Added Tax implications under Federal Decree-Law No. 8 of 2017, including whether the transaction qualifies for VAT exemptions or special treatments. Asset description clauses must clearly identify what is included and excluded from the purchase, particularly important for intellectual property transfers which require specific registration procedures in the UAE. You should include conditions precedent addressing regulatory approvals, particularly for foreign ownership restrictions and sector-specific licensing requirements. The document should specify governing law and dispute resolution mechanisms, considering UAE courts' jurisdiction and the availability of arbitration under UAE Arbitration Law.

Legal requirements in United Arab Emirates

Under UAE Commercial Companies Law and Civil Code, your Asset Purchase Term Sheet must comply with specific federal requirements while considering emirate-level variations. Foreign buyers must ensure compliance with Federal Law No. 19 of 2018 on Foreign Direct Investment, particularly regarding negative lists and ownership percentage restrictions in certain sectors. The document should address UAE Central Bank regulations if the transaction involves financial assets or requires foreign exchange approvals. You must consider emirate-specific requirements, as Dubai, Abu Dhabi, and other emirates may have additional licensing or registration procedures for certain asset categories. The term sheet should account for UAE employment law implications if the asset purchase includes workforce transfers, ensuring compliance with UAE Labour Law provisions regarding employee rights and end-of-service benefits.