Simple Right Of First Refusal Agreement Template for the United Arab Emirates

A Simple Right of First Refusal Agreement gives you the legal right to purchase an asset, property, or shares before the owner can sell to a third party. Under UAE law, this agreement must comply with the Civil Code (Federal Law No. 5 of 1985) and Commercial Transactions Law (Federal Law No. 18 of 1993), while adhering to Sharia principles that govern commercial transactions in the Emirates.

When do you need this document?

You need this agreement when entering joint ventures where you want protection against unwanted third-party involvement, when investing in startups where you wish to maintain influence over future ownership changes, or when leasing commercial property with expansion plans. Property developers commonly use these agreements to secure future development rights, while business partners rely on them to prevent external interference in closely-held companies. The document is particularly valuable in the UAE's fast-paced business environment where asset values can change rapidly and strategic control is crucial.

Key legal considerations

Your agreement must clearly define trigger events that activate the right, such as receipt of a bona fide third-party offer or the owner's decision to sell. The notice period for exercising your right typically ranges from 30 to 90 days under UAE practice, and you must specify the pricing mechanism—whether matching third-party offers, using predetermined formulas, or obtaining independent valuations. Consider including provisions for partial transfers, financing arrangements, and what happens if you decline to exercise your right. The agreement should address potential conflicts with other shareholders' rights and comply with any sector-specific regulations, particularly in regulated industries like banking or telecommunications.

Legal requirements in United Arab Emirates

Under UAE law, your Right of First Refusal Agreement must be in writing and clearly identify all parties with their full legal names and Emirates ID details for individuals or trade license information for companies. The document requires precise description of the subject matter, whether real estate (requiring property title details), company shares (specifying shareholding percentages), or other assets. You must ensure compliance with emirate-specific property laws if real estate is involved, as each emirate has distinct regulations. For share transfers, adherence to the Commercial Companies Law is mandatory, particularly regarding board approvals and transfer restrictions. The agreement should specify governing UAE law and designate UAE courts for dispute resolution, while ensuring all terms comply with Sharia principles and public policy requirements.