General Security Agreement Template for the United Arab Emirates

A General Security Agreement is a crucial legal document that creates security interests over various types of assets to secure your financial or commercial obligations under UAE law. This comprehensive agreement establishes a legal relationship between you as the security provider and your creditor, giving them enforceable rights over specified assets if you default on your underlying obligations. The document must comply with UAE Federal Law No. 5 of 1985 (Civil Code) and UAE Federal Law No. 18 of 1993 (Commercial Code) to ensure legal validity and enforceability.

When do you need this document?

You need a General Security Agreement when entering into significant financing arrangements, whether conventional or Islamic structures, where your lender requires security over your assets. This document is essential for corporate financing transactions, project finance deals, and commercial lending arrangements where you must pledge business assets, inventory, receivables, or other property as collateral. Banks and financial institutions in the UAE typically require this agreement before advancing substantial credit facilities or loans. You'll also need it when restructuring existing debt arrangements or when multiple creditors require coordinated security arrangements through a security agent structure.

Key legal considerations

Your General Security Agreement must clearly define the secured obligations, which may include principal amounts, interest, fees, and future advances under your credit facilities. The document should specify the exact assets covered by the security, including detailed descriptions of movable and immovable property, business assets, and future-acquired property where applicable. You must understand the enforcement mechanisms available to your creditor, including their rights to take possession, sell assets, and apply proceeds toward your obligations. The agreement typically includes representations and warranties about your ownership of the secured assets, restrictions on your ability to dispose of or encumber the assets, and your ongoing obligations to maintain and insure the collateral.

Legal requirements in United Arab Emirates

Under UAE law, your General Security Agreement must comply with specific registration and perfection requirements depending on the type of assets involved. For movable property, you must follow UAE Federal Law No. 20 of 2016 (Mortgage of Movable Properties), which requires registration with the appropriate UAE authorities to perfect the security interest. The document often needs execution in both English and Arabic to meet local court requirements, and you must ensure compliance with UAE notarization and attestation procedures. Your agreement must also consider UAE Central Bank regulations if involving regulated financial institutions, and corporate security providers must comply with UAE Federal Law No. 2 of 2015 (Companies Law) regarding board approvals and corporate authority. The enforcement provisions must align with UAE civil procedure laws and Sharia principles where applicable, ensuring your creditor can effectively realize their security rights through UAE courts or alternative mechanisms.