Typically, the escrow process for a buy and sell transaction encompasses the following steps:
- The contracting parties execute an escrow agreement, which is drafted in accordance with the terms of the principal agreement. An escrow account is subsequently established at a bank in Hong Kong.
- The buyer deposits the requisite funds into the escrow account.
- The escrow agent confirms receipt of the escrow funds to both contracting parties.
- A due diligence procedure is generally conducted between the contracting parties for the inspection of goods.
- The buyer provides confirmation of a favorable due diligence outcome to the seller.
- Upon fulfillment of any additional terms and conditions, the payment event is triggered. Both the buyer and seller then notify Sovereign to authorize the release of the funds.
- The transaction is completed, and Sovereign disburses the funds to the seller in accordance with the terms stipulated in the escrow agreement.