The UAE issues a law regulating commercial agencies..and implementation in mid-June allows international companies to conduct business for their own-owned products, with conditions

The UAE has issued a federal law regulating commercial agencies, which will come into force in mid-June. And it stipulated that it is not permissible to practice commercial agency business in the country, except for those who are registered in the commercial agencies register in the ministry, and any commercial agency that is not registered in the register is not considered.

The law confirmed that the practice of commercial agency business in the country is limited to individual citizens, companies and institutions that are wholly owned by any of any of the following: a natural citizen person, a public legal person, a private legal person owned by public legal persons, a private legal entity wholly owned by citizen natural persons.

With the exception of public shareholding companies incorporated in the state, the shareholding of state citizens is not less than 51% of its capital. The Council of Ministers, based on the recommendation of the Minister of Economy, issues a decision regarding the procedures, controls, and conditions necessary for the aforementioned companies to carry out commercial agency business in the country. And within the limits he deems in this regard, and when the following conditions are met: That the commercial agency does not have a commercial agent inside the country, that the commercial agency is new and has not been previously registered in the country.

Merchandise of any agency registered with the Ministry may not be brought in for the purpose of trading other than through an agent
The Council of Ministers releases any activities or materials of commercial agencies
Provisions for the termination of the agency shall apply to contracts in force at the time of issuance of the law after the lapse of two years

For the commercial agency to be valid, the agent must be linked to the original principal by a written and notarized contract, and the commercial agency must be registered in the Commercial Agencies Register. Disputes that arise regarding the commercial agency contract.
If it is stipulated in the contract that the agent establishes display buildings, commodity stores, or maintenance or repair facilities, the term of the contract shall be five years, unless otherwise agreed upon.
The original principal may seek the services of one agent in the country as a single region, and he may also seek the assistance of one agent in each emirate or in a number of emirates, provided that the distribution of goods and services subject to the commercial agency is limited to him within the agency area, and the agent may seek the services of a distributor in one or more emirates. A number of emirates covered by his commercial agency, and the agent is entitled to the commission for the deals concluded by the principal himself, or through others in the area designated for the agent’s activity, even if these deals were not concluded as a result of the latter’s efforts.

Agencies registered for the agent himself are excluded from 10 years or the volume of investment in them is 100 million dirhams.
The validity of the agency is that the agent is linked to the original principal by a written and documented contract

The law also stipulates the termination of the commercial agency contract in the following cases: the termination of the contract period unless that period is renewed by agreement of the contracting parties, at the will of any of the principal or agent based on its terms and conditions, by agreement of the contracting parties before the end of the contract period, issuance of a final judicial ruling to terminate the commercial agency, i.e. Another case mentioned in this law.
The assets of the old agent are transferred to the principal or the new agent at fair value when the following conditions are met: that the assets are linked to the contract, and that the assets are in the possession of the old agent at the time of the termination of the commercial agency contract, and there is no restriction on the transfer of ownership.
With the approval of the Ministry of Economy, during the period of the dispute between the principal and the agent and for a temporary period, goods or services may be introduced to the state from exclusive sources, provided that the principal is responsible throughout that period towards the old agent for any compensation that may be awarded by the competent courts by a final judgment.
The party wishing to terminate the contract based on its terms and conditions shall do the following: Send a notice to the other party of its desire to terminate the contract early, provided that the notice period is not less than one year before the date specified for termination, or before the end of half of the contract period, whichever is less, unless the two parties agree on Otherwise, either party may submit a detailed report prepared by a specialized professional body regarding settlement of dues, guarantees of non-interruption of after-sales services from the country’s markets, assessment of assets and expected damages.
The party who did not accept the termination of the contract may resort to the committee to challenge the request to terminate it, and either party may provide the committee with the report, and the committee shall decide on the appeal request within 120 days from the date of its registration, provided that the expiry of the aforementioned period without issuance of a decision is considered a rejection of the appeal, and the contract continues to be valid until the end of the contract. The period of notification or the decision of the dispute by the committee, whichever is later. The party wishing not to renew the contract shall notify the other party of this, one year prior to the expiration of the contract period, or before the expiration of half of the period, whichever is less, unless the two parties agree otherwise.

claim for compensation

If the contract expires, the agent may claim compensation from the principal for the damage incurred as a result of its termination, and if its termination leads to damage to any of its parties, the aggrieved party may claim compensation for the damages incurred by him. of the principal’s products, and led to the promotion of these products or the increase in the number of clients, and as a result of the termination of the contract, the agent was deprived of what he missed out on from earning in connection with that success.

Register of commercial agencies

The application for registration in the Commercial Agencies Register shall be submitted to the Ministry, and the Minister’s decision shall determine the data that must be available in the application. The application for registration shall be accompanied by supporting documents, in particular the following: A copy of the valid commercial license, and a copy of the commercial agency contract, which has been authenticated and ratified by the official authorities.
The Ministry of Economy considers the application for registration in the Commercial Agencies Register, and issues its decision in this regard within ten working days from the date of completion of the registration requirements.