Document background
The Installment Letter of Credit is a crucial trade finance instrument used when transactions require structured, phased payments rather than a single payment upon shipment. This document type is particularly relevant for large-scale projects, capital equipment purchases, or long-term supply contracts where payments need to be spread over time. Under Hong Kong law, which combines common law principles with specific banking and trade finance regulations, this document provides a secure and legally robust framework for managing complex international trade transactions. The document typically details the conditions for each installment payment, documentary requirements, and compliance standards, while incorporating international banking practices such as UCP 600. It's commonly used in Hong Kong's role as a major international financial center, particularly for transactions involving Asian markets.
