New Commercial Agency Law is a welcoming change for both the Principal and Agent.

02 February 2023

Bini Saroj

It shall come into effect from 15th June 2023.

Who can practice Commercial agency?

• UAE Citizens

• Companies fully owned by UAE Citizens

• PJSC or Companies Owned by PJSC


Exception to this is:

An International Company may be allowed even if it is not owned by nationals for products that are owned by such company, under the conditions prescribed by the Council of Ministers


Term of the Contract:

A Contract has to be for a minimum term of five years if the agent is establishing showrooms or buildings, commodity stores or maintenance or repair facilities, unless the parties agree otherwise.


Termination of agency contract:

The New Law provided for the first time, unilateral termination of an agency contract by either parties, or non-renewal of the contract by serving notice as prescribed in the law, unless the parties agree otherwise

This termination can be challenged by either of the parties.

Agreements that are in force at the time of issuance of the New Law cannot apply termination clause except after the lapse of two years from 16th June 2023. The timeframe for the application of such provisions is extended to 10 years, in case of same agent for more than 10 years or when agency has invested more than 100 million dirhams


Resorting to Arbitration:

the Agent and the Principal can resort to Arbitration in accordance with Contract. This Arbitration will take place within UAE, unless the parties agrees otherwise. Parties whose dispute is being heard by the Committee or Court before this Law was published cannot resort to Arbitration.

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