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ARTICLE · 21 APRIL 2025

True Sale Under UAE Law

BSA Law
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Securitisation and receivables sale/purchase agreements (such as discounting and factoring) are effective methods of financing used by entities to monetise their business receivables.

United Arab EmiratesFinance and Banking
Arsalan Tariq
Arsalan Tariq
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Introduction

Securitisation and receivables sale/purchase agreements (such as discounting and factoring) are effective methods of financing used by entities to monetise their business receivables. In these transactions, a business entity that generates receivables through commercial operations sells the receivables for immediate cash consideration. The most important component of such transactions is achieving a 'true sale' of receivables.

What is 'True Sale'?

A 'true sale' is understood as a sale of receivables by the owner (the seller) to another person (the investor/purchaser/financier), such that the receivables sold are protected from claims against the seller's assets in the event of the seller's bankruptcy. This involves:

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