Characteristics of a Commercial Agency in the UAE

Foreign principals who wish to conduct business in the UAE. But want to do so with minimal investment. Often turn to lawyers in Dubai to sell their goods or services. 

The main piece of legislation that governs agency arrangements in the UAE is Federal Law No. 18 of 1981. It is commonly referred to as the “Agency Law”. The Agency law is extremely wide and captures all forms of agreements for sale through third parties.

Characteristics of Commercial Agency

There are important considerations that foreign principals should bear in mind before entering into agency agreements.

·         Nationality

As per Article 2 of the Agency Law, foreign individuals, and companies are not allowed to practice the activities of the commercial agency in the UAE. As the law has confined such activities to national individuals. And UAE companies are owned entirely by UAE nationals. 

As a result, it is a common practice for foreign companies seeking to market. And sell their products in the UAE to enter into the commercial agency. Or distributorship agreements with a licensed local business.

·         Exclusivity

A further point to note is that an agreement can only be registered as a Registered Agency Agreement if the relationship between the principal. And the agent is exclusive with the corresponding products and services as listed on the certificate. Article 5 of the Agency Law states that the principal may appoint a separate agent for each Emirate. 

Lawyers in Dubai can help you understand this law better. 

·         Registration

Commercial agency and distributorship agreements must be registered with the Commercial Agencies Registry. For the provisions of the Agency Law to apply to the relevant agency arrangement (“Registered Agency Agreement”). To qualify as a Registered Agency Agreement, the commercial agent must have an exclusive right to distribute the relevant goods. 

Or provide the relevant services as mentioned. As described in the Registered Agency Agreement and corresponding certificate as registered with the Ministry of Economy. In at least one of the Emirates of the UAE. 

Conclusion 

therefore, if you want to know about the commercial agency in the UAE, it is better to keep these points in mind. Lawyers in Dubai are there for your legal assistance and support. They are available all over the UAE. 

They provide their services in Ajman, Sharjah, Fujairah, Abu Dhabi, and other emirates of the UAE as well. They can save both your time and money.

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