Foreign companies wishing to sell goods in the UAE may need to appoint a local commercial agent or distributor. Here is a complete guide to UAE Commercial Agency Law in 2025.
UAE Commercial Agency Law Overview
UAE Commercial Agency Law (Federal Law No. 3 of 2022, updated from the original 1981 law): a commercial agency relationship exists when a foreign principal appoints a UAE national (or a UAE company with at least 51% UAE national ownership) to act as an exclusive agent or distributor for their products in the UAE. The registered commercial agent has exclusive rights within their specified territory, and the foreign principal cannot sell directly in the UAE in competition with the agent during the contract term. Registration: the agency agreement must be registered with the UAE Ministry of Economy Commercial Agency Register to be legally enforceable.
Types of UAE Commercial Agency Arrangements
Commercial Agency (Exclusive Exclusive): Only one agent in the UAE (or a specific emirate). The agent has the exclusive right to import, distribute, and sell the principal’s products. The principal cannot sell directly or appoint another agent in the territory. Termination: the UAE Commercial Agency Law makes it difficult for the principal to terminate the agent. If terminated without cause, the agent is entitled to compensation (even without an express compensation clause in the contract). Distribution Agreement: A distributor buys and resells products (not an agent acting on behalf of the principal). Distribution agreements can be exclusive or non-exclusive. Less regulated than commercial agency (not subject to the Commercial Agency Law registration requirement), but the agent/distributor distinction is often blurred in practice and UAE courts may apply agency law regardless.
Recent UAE Commercial Agency Law Changes (2022)
The 2022 update to UAE Commercial Agency Law introduced: the ability for non-UAE nationals to register as commercial agents (previously only UAE nationals were eligible), but UAE national agents still receive stronger protection. Free zones exception: companies within UAE free zones can distribute within the free zone without appointing a UAE national agent (free zone distribution is not subject to Commercial Agency Law).