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A Warrant Agreement is a legal contract that gives investors the right to buy company shares at a specific price within a set timeframe in the UAE market. It works similarly to stock options but typically has a longer exercise period, making it attractive for both early-stage startups and established companies looking to raise capital.

Under UAE commercial law, these agreements must clearly outline key terms like the exercise price, expiration date, and anti-dilution provisions. Companies often use warrant agreements as sweeteners in funding rounds or to compensate key partners without immediate cash outlays. When properly structured, they comply with UAE Securities and Commodities Authority regulations while giving businesses flexibility in their capital raising strategies.

Consider using a Warrant Agreement when raising capital without immediate cash outflows in the UAE market. This tool proves especially valuable for startups seeking to attract investors while preserving current cash reserves, or established companies looking to incentivize key partners and strategic allies.

The agreement becomes particularly useful during Series A funding rounds, mergers, or when compensating advisors and early employees. UAE companies often implement warrant agreements to bridge valuation gaps in negotiations, reward long-term partnerships, or provide additional investment incentives while maintaining compliance with Emirates Securities and Commodities Authority regulations. The timing works best when you need flexibility in your capital structure while managing current cash flow constraints.

• Equity Warrants: Most common in UAE markets, giving holders the right to purchase company shares at predetermined prices, typically used in fundraising rounds
• Covered Warrants: Issued by financial institutions and listed on UAE exchanges, these are secured by underlying shares held by the issuer
• Detachable Warrants: Can be separated from other securities and traded independently on UAE markets, offering flexibility to investors
• Performance Warrants: Tied to specific business milestones or KPIs, popular among UAE startups for incentivizing partners
• Employee Warrants: Structured as part of compensation packages under UAE labor laws, often with unique vesting schedules

• Company Directors: Authorize and oversee warrant issuance, ensuring alignment with UAE corporate strategy and shareholder interests
• Legal Counsel: Draft and review agreements to ensure compliance with Emirates Securities and Commodities Authority regulations
• Investors: Hold warrant rights and make decisions about exercising options to purchase shares at specified prices
• Corporate Secretary: Maintains warrant records, handles documentation, and ensures proper registration with relevant authorities
• Financial Advisors: Structure warrant terms and provide valuation guidance under UAE market conditions

• Company Details: Gather current shareholding structure, authorized capital, and corporate approvals from UAE authorities
• Warrant Terms: Define exercise price, duration, number of shares, and any performance conditions or vesting schedules
• Stakeholder Information: Collect warrant holder details, identification documents, and UAE residency status if applicable
• Corporate Approvals: Secure board resolutions and existing shareholder consents under UAE Companies Law
• Documentation: Our platform generates compliant warrant agreements, ensuring all UAE regulatory requirements are met while minimizing legal risks

• Exercise Terms: Clear specification of warrant price, exercise period, and number of shares under UAE Securities law
• Anti-dilution Provisions: Protection mechanisms for warrant holders during corporate actions or share restructuring
• Transfer Rights: Rules governing warrant transferability and registration requirements under UAE regulations
• Adjustment Clauses: Provisions for share splits, consolidations, or other corporate events affecting warrant terms
• Governing Law: Explicit reference to UAE Commercial Companies Law and relevant DIFC or ADGM regulations
• Execution Requirements: Signature blocks, witness provisions, and necessary corporate authorizations

A Warrant Agreement differs significantly from a Call Option Agreement in several key aspects under UAE law, though both involve rights to purchase securities. Understanding these differences helps you choose the right instrument for your specific needs.

• Duration: Warrants typically have longer exercise periods (often several years) compared to call options, which usually expire within months
• Issuer: Warrants are issued directly by companies and create new shares upon exercise, while call options are secondary market instruments trading existing shares
• Regulatory Framework: Warrants fall under UAE Companies Law and require specific corporate approvals, whereas call options primarily operate under securities trading regulations
• Price Stability: Warrant terms remain fixed throughout their lifetime, while call option prices fluctuate based on market trading
• Capital Structure Impact: Warrant exercise directly affects company capitalization by creating new shares, unlike call options which merely transfer existing ones