A popular method of conducting business in the United Arab Emirates (UAE) is the formation of commercial arrangements with local and licensed agents or distributors. This is one of the primary methods of conducting business for companies based outside the country, who desire to sell their products in the UAE by foregoing the establishment of subsidiary companies in the region. Instead, companies based in foreign jurisdictions choose to contract with local companies and/or individuals, who may already have a well-established sale network in the country. In the UAE, such agreements can entail parties of two types: local agents and distributors.
The principal – agency relationship in agency agreements are governed by the UAE Agency Law (Federal Law Number 18 of 1981), under which the agreements are protected. This does not apply in the case of distribution agreements. Distribution agreements are governed by the UAE Commercial Transactions Law (Federal Law Number 18 of 1993), which is a law with a wide and general purview.
Our lawyers can assist you in entering the UAE market by advising you on the advantages and disadvantages of each type of the two agreements in addition to drafting the agreement that suites your business best in the UAE.