Am workiing for a Contracting Company. One of our client requested us to take a project with value Approx. (USD 1 Million). They informed us that they will settle our invoice 18 months (duration of the project) on completion of the project. To have guarantee about the payment from the client, what all are the options available. Is there any option available in LC with validity for 18 months. Kindly advice the maximum validity of letter of credit.
In your case it is better a Stand By Letter of Credit , under UCP 600 . confirmed by your bank.
Maximum validity will depend on rules in your Country.
Other comments appreciated
Many thanks and appreicate for your opinion Ciao, Is the SBLC is same as Bank Guarantee. What is the maximum validity allowed in United Arab Emirates.
Maximum validity (as pan states) will be subject to local law ( if applicable) and/or contingent lines with your bank.
Either a SBLC or Guarantee could be tailored to suit requirements. The SBLC would commonly be made subject to either ISP98 or UCP600, whereas the Guarantee would commonly be made subject to URDG758.
However, if issued as a SBLC subject to UCP600, it would be mandatory to incorporate a fixed expiry date