Letter Of Intent Venture Capital for United Arab Emirates

Letter Of Intent Venture Capital Template for United Arab Emirates

A Letter of Intent for venture capital investment in the UAE is a preliminary document that outlines the proposed terms and conditions of a potential investment transaction. Operating under UAE federal laws and potentially specific free zone regulations, this document serves as a framework for further negotiations and due diligence. It typically includes key commercial terms, valuation parameters, exclusivity provisions, and confidentiality obligations while maintaining its primarily non-binding nature. The document must comply with UAE Commercial Companies Law and, where applicable, specific venture capital regulations, particularly in free zones like the DIFC.

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What is a Letter Of Intent Venture Capital?

A Letter of Intent Venture Capital is commonly used in the UAE's growing venture capital ecosystem as an initial step in formalizing investment discussions between investors and target companies. This document is particularly important in the UAE context, where business relationships often require formal documentation of preliminary understandings. It serves as a roadmap for the transaction, outlining key commercial terms, due diligence requirements, and timeline while ensuring compliance with UAE regulations. The document is typically used when parties have reached a preliminary understanding on key investment terms but before conducting detailed due diligence or drafting definitive agreements. It must consider UAE-specific requirements such as foreign ownership restrictions, free zone regulations, and potential Sharia compliance considerations.

What sections should be included in a Letter Of Intent Venture Capital?

1. Parties: Identification of the potential investor(s) and the target company, including registration details and addresses

2. Background: Brief description of the target company's business and the investor's interest in pursuing the investment

3. Definitions: Key terms used throughout the letter

4. Proposed Investment Structure: Overview of the proposed investment amount, valuation, and type of securities to be issued

5. Due Diligence: Scope and process of the proposed due diligence investigation

6. Exclusivity: Terms of exclusive negotiation period, if applicable

7. Confidentiality: Obligations regarding the confidential treatment of information exchanged

8. Timeline: Proposed schedule for completing due diligence, negotiations, and closing

9. Non-Binding Nature: Clear statement that the LOI is non-binding except for specified provisions

10. Governing Law: Specification of UAE law as governing law and relevant jurisdiction

11. Expiration: Validity period of the LOI and conditions for extension

12. Signatures: Execution blocks for authorized representatives of all parties

What sections are optional to include in a Letter Of Intent Venture Capital?

1. Key Terms: Preliminary agreement on key investment terms, used when parties want to document specific commercial understandings

2. Break Fee: Terms of any break fee payable if either party terminates discussions, included when parties want to ensure serious commitment

3. Board Representation: Preliminary understanding on investor's board representation rights, included for significant investments

4. Conditions Precedent: Key conditions that must be satisfied before proceeding with the investment, included for complex transactions

5. Cost Allocation: Agreement on how transaction costs will be borne, included when significant costs are expected

6. Sharia Compliance: Statement regarding Sharia compliance requirements, included when relevant to the transaction or parties

7. Foreign Investment Provisions: Specific provisions related to foreign investment requirements, included when investor is foreign

8. Regulatory Approvals: List of required regulatory approvals, included when transaction requires specific regulatory clearances

What schedules should be included in a Letter Of Intent Venture Capital?

1. Term Sheet: High-level summary of key commercial and legal terms of the proposed investment

2. Due Diligence Checklist: Preliminary list of documents and information required for due diligence

3. Corporate Structure: Current and proposed post-investment corporate structure diagrams

4. Timeline: Detailed timeline with key milestones and responsibilities

5. Required Approvals: List of regulatory and corporate approvals required for the transaction

Authors

Alex Denne

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

Publisher

Genie AI

Document Type

Letter of Intent

Cost

Free to use
Clauses
Relevant Industries

Technology

E-commerce

Financial Technology

Healthcare Technology

Educational Technology

Artificial Intelligence

Renewable Energy

Digital Media

Software Development

Biotechnology

Cybersecurity

Smart Cities

Logistics and Supply Chain

Real Estate Technology

Industrial Technology

Relevant Teams

Legal

Finance

Investment

Corporate Development

Compliance

Risk Management

Strategy

Business Development

Board Secretariat

Due Diligence

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Investment Director

Venture Capital Partner

Legal Counsel

Investment Manager

Corporate Development Director

Business Development Manager

Board Member

Company Secretary

Due Diligence Manager

Compliance Officer

Risk Manager

Strategy Director

Financial Controller

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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