Commercial Agencies in the UAE: What Startups Should Know Before Signing a Distribution Deal

Many UAE startups grow by representing a brand: importing a product, distributing it across the emirates, or offering a foreign company's service locally. Others are the brand, and want a local partner to sell for them. Either way, you will run into the UAE's commercial agency rules sooner or later.

This guide explains the main points of Federal Law No. 3 of 2022 Regulating Commercial Agencies, using the English text published by the Ministry of Economy and Tourism, the UAE Legislation portal and the ministry's registration service page, all linked at the end. We have left out all fees; the ministry shows current figures.

General information, not legal advice. Procedures change; always check the official source.

What counts as a commercial agency

Article 1 defines a commercial agency as the representation of a principal by an agent under a contract of agency, distribution, sale, offer or concession, or the provision of a commodity or service in the UAE, in return for a commission or profit.

• The principal is the producer or manufacturer, or the owner of the commodity or service, inside or outside the UAE.
• The agent is the person or company entrusted with representing the principal.

The law was issued on 13 December 2022 and came into force six months after publication in the Official Gazette. It replaced Federal Law No. 18 of 1981.

Who can be a registered agent

Article 2 limits commercial agency business to UAE citizens, and to companies and institutions wholly owned by citizens, public legal persons, or private legal persons owned by them. The ministry's service page puts it simply: the agent must be a citizen, or an establishment or company 100% owned by citizens, with a valid trade licence.

There are two exceptions:

• International companies: the Cabinet may, on the Minister's recommendation, allow an international company to act as agent for products it owns, if the agency has no existing agent in the UAE and is new and not previously registered.
• Public joint stock companies incorporated in the UAE in which citizens hold at least 51% of the capital, under conditions set by the Cabinet.

For a foreign-owned startup, this matters. Owning 100% of your company is possible for many activities, but a registered exclusive commercial agency is reserved, with limited exceptions.

Registration makes it valid

Under Articles 3 and 4, commercial agency business may only be practised by those listed in the Commercial Agencies Register at the ministry. An agency that is not registered is not valid. For validity, the agent must be appointed by the original principal under a written and documented contract, and the agency must be on the register.

What the application needs

Article 12 requires the application to include, in particular:

1. a copy of a valid business licence, and
2. a copy of the agency contract attested and legalised by the official authorities.

The ministry's service page adds the documents it asks for:

• the ministry's agency registration application form
• a valid trade licence
• an exclusive agency, distribution or representation contract, notarised and attested, with a legal Arabic translation if it is in another language
• the citizen agent's ID card
• an attested signature of the owner or authorised manager.

The page says the contract should state the names of both parties, address, exclusivity, the agency's territory, the products and services, the products' trade names, consent to register the contract, the contract term and the notarisation and attestation.

How long it takes

Under Article 13, the ministry decides within 10 working days of the requirements being complete and, if accepted, issues a certificate. Under Article 14, no response within 10 working days counts as a rejection, which can be challenged in court within 60 days. The service page lists an expected completion time of five working days, applied for online or through the ministry's app.

Keeping it up to date

• Changes: under Article 15, the agent must apply to record any change or amendment within 60 days of becoming aware of it.
• Deletion: under Article 16, if the agent no longer meets the conditions or the agency expires without renewal, the agent must apply for deletion within 60 days.

Exclusivity and territory

Under Article 7, a principal may appoint one agent for the whole UAE, or one agent per emirate or group of emirates, with distribution exclusive to that agent in their territory. The agent may use distributors in the emirates its agency covers.

Under Article 8, the agent is entitled to commission on deals the principal concludes, directly or through others, in the agent's territory, even if the agent did not bring them in.

Under Article 20, goods covered by a registered agency may not be imported for trading except through the agent, unless the ministry or the agent approves.

Contract term

Article 6 says that if the contract requires the agent to set up showrooms, stores, or maintenance or repair facilities, the term is five years, unless agreed otherwise.

Ending the contract

Article 9 lists when an agency contract expires, including the end of its term without renewal, either party's will under the contract's terms, mutual agreement and a final court judgment.

Article 10 sets the notice rules:

• Early termination: the terminating party must give notice of at least one year before the termination date, or before half the contract term has passed, whichever is less, unless agreed otherwise.
• Non-renewal: the same one-year or half-term rule applies before expiry.

If the other party objects to termination, it can challenge it before the Commercial Agencies Committee, which decides within 120 days. The contract continues until the end of notice or the Committee's decision, whichever is later.

Article 9 also says that, unless agreed otherwise, the old agent's agency-related assets, such as goods, spare parts and machinery, transfer to the principal or the new agent at fair value.

Compensation

Under Article 11, an agent may claim compensation when the contract expires at the end of its term, unless expressly agreed otherwise. Where termination causes harm, the affected party may claim compensation. The agent must show its work contributed to visible and significant success of the principal's products and that termination deprived it of profit from that success.

Agent duties

Article 19 requires agents to provide spare parts, tools, materials and accessories needed to maintain durable goods, and to provide the agreed maintenance services.

Disputes

Under Article 24, disputes over a registered agency must go to the Commercial Agencies Committee before any court case. The Committee decides within 120 days; after that, either party may go to court within 60 days. Article 26 allows the parties to agree to arbitration, which takes place in the UAE unless agreed otherwise.

A founder's checklist

1. Decide which side you are on: principal, agent or distributor.
2. Check eligibility if you want to be a registered agent.
3. Define exclusivity, territory, products and term in the contract.
4. Notarise, attest and translate the contract into Arabic.
5. Register with the ministry before relying on exclusivity.
6. Set notice and asset terms with the one-year rule in mind.
7. Record changes within 60 days.

Official sources

• Ministry of Economy and Tourism, Federal Law No. 3 of 2022 Regulating Commercial Agencies (English, PDF): https://www.moet.gov.ae/documents/20121/376320/Commercial+Agency+Law.pdf/6bfbb008-caea-deba-3c81-cd1b99da1817
• UAE Legislation, Federal Law No. 3 of 2022: https://uaelegislation.gov.ae/en/legislations/1617
• Ministry of Economy and Tourism, Commercial agency registration service (Arabic): https://www.moet.gov.ae/ar/w/%D9%82%D9%8A%D8%AF-%D9%88%D9%83%D8%A7%D9%84%D8%A9-%D8%AA%D8%AC%D8%A7%D8%B1%D9%8A%D8%A9

Last checked: 24 October 2026.

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