You can open a Documentary Letter of Credit on behalf of your company at ZERO Cash Margin by contacting us. We’re the Trusted Letter of Credit Provider in Dubai.
Here’s our simple Letter of Credit issuance process to open your Import LC at ZERO Cash Margin:
A Sudan based trader needed a Letter of Credit facility to finalize their Toyota Hilux Double Cabin Pickups import deal with a Dubai supplier. We extended our own bank facility through a European Bank and facilitated the required MT700 from our European Bank Account at ZERO Collateral.
USD 450,000
LC at Sight
Send us your requirements, and we can provide your Sight LC within 2 banking days.
A Letter of Credit is a written undertaking issued by a bank, assuring the seller that they will receive payment from the buyer. It is also known as Irrevocable LC, Import LC, LC at Sight, LC MT700, or DLC MT700, all of which confirm that the seller will be paid once the shipping documents are submitted.
Global trade carries real risks, including distance, differing laws across countries, and limited trust between traders who have never worked together before. When a buyer and seller from different parts of the world decide to do business, uncertainty around trust and payment naturally arises. Letters of Credit help bridge that gap, giving both parties a secure foundation to build trust on.
Import LC and LC at Sight are usually valid for 90 or 180 days and are always irrevocable. This means the issuing bank commits to paying the seller once the terms of the Irrevocable Letter of Credit are met, and even if the buyer is unable to pay or becomes bankrupt, the bank remains liable to fulfill the agreed payment terms. This irrevocable commitment is exactly why Letters of Credit remain one of the most preferred LC Payment Terms in International Trade.
In global trade, buyers face the risk of paying for goods they do not receive, while sellers face the risk of shipping goods without receiving payment. Letters of Credit help manage these risks. MT700 is the SWIFT message format used by banks to issue documentary credits.
The International Chamber of Commerce (ICC) publishes UCP 600, the rules that apply when a credit expressly incorporates them.
Under an LC Payment Term, the buyer’s bank commits to paying the seller once all required terms are met and the documents stated in the Letter of Credit are submitted. If the seller fails to submit these documents before the deadline, the LC expires and the bank returns the deposited funds to the buyer’s account, the same funds set aside during LC Opening. This process brings the risk of payment or delivery default down to nearly zero.
To open a Letter of Credit on behalf of your company without the conventional cash margin, you’ll need to arrange the following documents:
Signed Copy of Proforma Invoice or Sales and Purchase Contract of your Trade Deal
Company Registration or Trade License
MOU between partners (if any) along with Company Ownership Document
Passport Copy of the Authorized Signatory
Authorized Signatory’s Residence or Company Utility Bills as Address Proof
Past 6 Month Bank Account Statement Copy
Once all these documents are received from your end, you can contact us with your LC request. And we will start work with our bank to structure your Letter of Credit transaction.
In general, these are the parties involved with a Letter of Credit. Here’s the role each one plays:
Applicant — The buyer who requests the bank to issue the LC MT700 in favor of their supplier.
Beneficiary –The seller who receives the MT700 into their bank account, also known as the LC Beneficiary.
Issuing Bank — The bank that issues the MT700 on behalf of the buyer, also known as the LC Issuing Bank.
Advising Bank — Receives the MT700 from the issuing bank and forwards, or advises, the LC to the seller’s bank.
Negotiating Bank — The seller’s bank, which also acts as a negotiating bank on the seller’s behalf.
It’s not just the buyer who benefits, sellers gain a great deal from using Import LC as a payment term too. Here’s how:
For Exporter
For Importer
This type of Letter of Credit cannot be amended or changed without the consent of all parties involved. Most traders prefer Irrevocable LCs, since they offer the security that suppliers value most.
As the name suggests, this type can be transferred to a principal party at the request of the first beneficiary. This is often used when the first party is playing more of a middle party role in the transaction.
In some cases, sellers may not fully trust the issuing bank acting on the buyer’s behalf. When that happens, they can request a bank in their own home country to confirm the LC, adding an extra layer of assurance.
This type of LC is widely used in both domestic and global trade. It guarantees that the bank will release payment as soon as the seller submits all the documents mentioned in the credit.
This type of LC is normally issued against a Master LC. Here, an LC is first opened in favor of an exporter through an importer’s bank. Based on that Master LC and the credit facility available in the exporter’s account, the exporter’s bank then opens a new LC in favor of their own principal seller.
A letter of credit is a bank’s written undertaking to pay a seller once specified shipping documents are presented, giving both the buyer and seller confidence that payment and delivery will happen as agreed.
An LC at sight pays the seller as soon as compliant documents are presented, while a usance LC allows payment after an agreed credit period, often 30 to 180 days.
Typically a sales contract or proforma invoice, company trade license, and buyer/seller KYC documents, with exact requirements set by the issuing bank.
Once documentation is complete, issuance through Bronze Wing Trading’s banking partners typically moves in a matter of days rather than weeks.
Yes. We arrange Letters of Credit without cash collateral, subject to a client undertaking and agreed terms.
