Terms & Conditions Required For Exercising
The Activity Of Commercial Agency In The U.A.E.

Commercial Agent Guide

The most important terms to be taken into consideration by national agents exercising the activity of commercial agency in Abu Dhabi Emirate are:

Agent must have a trade license allowing the practice of the line or lines of business in the field he chose for his firm whether be an establishment totally owned by him or a company in which he has other partners holding the UAE nationality. The said license, of course, is usually issued by Abu Dhabi Municipality Department, whereas the Membership Certificate issued by Abu Dhabi Chamber of Commerce & Industry is also required. Both the Municipality trade license and the Chamber's Membership Certificate must show the activity of Commercial Agencies, otherwise he will not be allowed to practice the said activity unless he applies to both parties (the Municipality and the Chamber) requesting addition of the said activity. (Form No. 1)

Then he can reach a written and authenticated agreement with the principal he deals with (the products subject matter of any agency agreement must fall within the same range of his line of business as stated in both the trade license and the Chamber's Membership Certificate).

He must also take the following points into consideration when wording the agreement.

a.  The agreement should either be called a "Trading Agency Agreement" or an "Exclusive Distributorship Agreement". It must also include full statements on the principal manufacturer or producer; his address besides that of his own name and full address. (In case of companies the agent's trade name must be mentioned instead of his personal name).

b.   The clause providing for appointment as agent must exclude all ambiguities, i.e., the agreement must provide that the first party (principal) is appointing the second party as a "sole agent" or "exclusive distributor" to market the products of the first party.

c. All names of affiliated companies (if any) should be mentioned, whereas the nature of relation with such companies should be clearly defined in the agreement.
 
d.  Products and trade names of items subject matter of the agreement must be also clearly shown. Territory covered by the agreement should be obviously defined. (Whether on the level of the & UAE; certain emirate or on certain group of emirates). In case the territory includes other Gulf or Middle East countries in addition to the UAE, it is advisable to be mentioned in order to avoid any prospective problems.

e.  The agreement should be comprehensive and clear enough to define the rights and liabilities of each signatory. In case unjustifiable terms are set by the principal to suggest prejudice or loss at times of future disputes, the agent may refuse such terms before signing the agreement.

f.  Date of commencement (effect) and date of expire should be also provided in days; months and years. It is advisable that the lifetime of an agreement is made to last not less than two years apt to be renewed automatically.

g.  It is advisable that the grace time following a notice or notification on agency termination by either party is long enough to settle pending liabilities or obligations of either party towards the other. (Such period should preferably be three months or more) of course, it should be provided that termination must be Built on obvious, substantial and justifiable reasons so that no loss may be suffered thereby.
 
h. The agreement should be signed by both signatories and duly attested and authenticated by the officially concerned authorities in both countries, as stated there under:

In the Principal's Country

Notary Public

Ministry of Foreign Affairs

UAE Consulate (If unavailable, by any Arab Consulate, member in the Arab league).
 

In the Agent's Country

Ministry of Foreign Affairs

Once an agent receives a duly attested and authenticated agency agreement, he should get it legally translated into Arabic (in case the agreement is written in a foreign language.

Approach the concerned Ministry of Economy & Commerce requesting registration of his agency agreement in the register prepared for the purpose.