A commercial agency is the representation of a principal by an agent under an agency contract, distribution, exhibition, franchise, or the provision of goods or services within the country in exchange for commission or profit.
The practice of commercial agency activities in the country is restricted to UAE nationals and companies or establishments that are fully owned by:
1. A natural UAE citizen.
2. A public legal entity.
3. A private legal entity owned by public legal persons.
4. A private legal entity wholly owned by natural UAE citizens.
The Cabinet may, based on the recommendation of the Minister of Economy, permit any global company, even if not owned by UAE nationals, to engage in commercial agency activities for its owned products, provided that the following conditions are met:
1. The commercial agency does not have an existing agent in the UAE.
2. The commercial agency is new and has not been previously registered in the UAE.
No one is allowed to practice commercial agency activities in the UAE unless they are registered in the Commercial Agencies Register of the Ministry of Economy, and any unregistered commercial agency will not be recognized.
For a commercial agency to be valid, the agent must be connected to the principal with a written and notarized contract, and the commercial agency must be registered in the Commercial Agencies Register.
If the contract stipulates that the principal must establish exhibition buildings, warehouses for goods, or maintenance or repair facilities, the contract term must be five years unless otherwise agreed.
The principal may employ one agent in the entire country as a single region or one agent in each emirate.
The agent is entitled to commission on transactions made by the principal himself or through others within the agent’s designated area of activity.
The commercial agency contract ends when:
1. The contract period expires unless renewed by mutual agreement (between the parties).
2. Either the principal or the agent terminates the contract in accordance with the terms and conditions of the agency contract.
3. The parties agree to terminate the contract before its end.
4. A final court ruling is issued to terminate the commercial agency.
ILS Consultancy provides specialized consultation, legal support, and solutions for both businesses and individuals regarding all information, issues, and procedures related to commercial agencies in the United Arab Emirates.
Email: info@ilsconsultancy.ae
+971555611565
+971559897409
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