Document background
The LOI For Business Purchase is a crucial preliminary document used in merger and acquisition transactions in the United Arab Emirates. It represents the first formal step in a business acquisition process, typically issued after initial discussions but before detailed due diligence and definitive agreements. The document outlines key commercial terms, conditions, and the proposed structure of the transaction, while establishing important provisions for confidentiality and exclusive negotiations. While primarily non-binding, certain provisions are typically made binding to protect both parties during negotiations. The document must align with UAE legal requirements, including the UAE Commercial Companies Law, Foreign Direct Investment Law, and relevant free zone regulations. It serves as a roadmap for the transaction and demonstrates serious intent to proceed, while providing flexibility for terms to be refined during subsequent negotiations.
