Document background
The Divisible Letter of Credit is a crucial trade finance instrument in Saudi Arabia's international commerce landscape. It is specifically designed for transactions where goods or services are delivered in multiple installments, allowing the beneficiary to draw down the credit amount in parts as shipments are made. This document type must strictly adhere to Saudi Arabian law, including compliance with SAMA regulations and Islamic banking principles. The Divisible Letter of Credit is particularly valuable in large-scale international trade deals where phased deliveries are common, such as construction projects, bulk commodity trades, or long-term supply contracts. It provides security to both parties while offering the flexibility needed for complex international transactions.
