The UAE Commercial Agencies Law (Federal Law No 2 of 2010 amending provisions of Federal Law No. 18 of 1981 (Agency Law)) regulates the appointment of commercial agents, sales representatives, and distributors in the UAE. This law defines a commercial agency as any arrangement whereby a foreign company is represented by an agent (UAE nationals or companies incorporated in the UAE and owned entirely by UAE nationals duly registered with the UAE Ministry of Economy and Commerce to engage in commercial agency activities) to distribute, sell, offer, or provide goods or services within the UAE for a commission or profit.
The most common type of agency is the contracts agency, whereby the agent undertakes on a permanent basis and in a specific area of activity, the instigation and negotiation of the conclusion of deals, to the advantage of the principal and in return for payment. Distributor contracts are treated as contracts agencies when they involve one agent as the sole distributor.
The Agency Law will apply if the following requirements are satisfied:
• The commercial agent is either a UAE national or an entity incorporated in the United Arab Emirates and wholly owned by UAE nationals • The commercial agent is registered with the Ministry of Economy and Commerce to engage in commercial agency activities • The agency agreement between the agent and principal is registered with the Ministry of Economy and Commerce; and • The relationship between the agent and principal is exclusive in terms of territory or in respect of specified products. We have substantial experience in acting for principals and for agents in: • Registering the Agent and the Agency with the UAE Ministry of Economy and Commerce. • Advising as to the suitability of commercial agency as a mechanism for buying or selling sales and marketing services and as to the alternatives; • Drafting, negotiating and advising on the terms of commercial agency contracts; • Advising on and dealing with claims arising on termination, and their defense including; claims pursuant to The UAE Commercial Agencies Law (Federal Law No 2 of 2010 amending provisions of Federal Law No. 18 of 1981(Agency Law)).