A registered UAE commercial agency can now be ended by either side. Article 9(1)(b) of Federal Law No. 3 of 2022 on Regulating Commercial Agencies lets the agency contract expire “by the will of either the Principal or the Agent,” subject to the contract’s own terms. That single clause reversed forty years of practice under the repealed Federal Law No. 18 of 1981, under which a registered agency was close to permanent.

The price of exit is notice. Article 10 requires at least one year’s notice, or notice before half the contract term expires, whichever is the lesser period, unless the parties agree otherwise. This guide covers who may hold an agency now that the nationality rule has been partly opened, why an unregistered agency is legally void, the import block that gives a registered agent its real commercial power, the compensation an agent can claim, the mandatory committee you must pass through before any court, and the transitional rules that keep some legacy agencies protected until 2033.

What Counts as a Commercial Agency in the UAE

Article 1 defines a commercial agency broadly: the representation of a principal by an agent under a contract of agency, distribution, sale, offer or concession, or the provision of goods or services inside the UAE in exchange for a commission or profit.

The label on your contract does not decide the question. A distribution agreement, a sole concession, a reseller arrangement and a services representation agreement all fall inside the same definition if they place a UAE party between a foreign producer and the UAE market for a commission or profit. The “Principal” is defined as the producer or manufacturer that owns the goods or services, inside or outside the UAE, and the “Agent” is the natural or legal person representing them.

What determines whether the protective regime applies is registration, not the contract’s wording. An arrangement that meets the definition but is never entered in the Commercial Agencies Register at the Ministry of Economy and Tourism sits outside the statutory protections and is governed by ordinary contract law under the general commercial framework that applies to any UAE business.

Who Can Hold a Commercial Agency

Article 2(1) restricts the activity to UAE nationals and to companies and establishments wholly owned by a UAE national, a public legal person, a private legal person owned by public legal persons, or a private legal person wholly owned by UAE nationals. Two express openings now sit alongside that rule.

The first opening is in Article 2(2). The Cabinet may, on the Minister’s recommendation, allow an international company that is not UAE-owned to hold a commercial agency for its own products, on conditions the Cabinet sets, provided two requirements are met: there is no existing commercial agent for that agency inside the UAE, and the agency is new and has not previously been registered here. In other words a foreign producer can, in principle, represent itself rather than appoint a local agent, but only where it has never appointed one.

The second opening is in Article 2(3). Public joint-stock companies established in the UAE in which UAE nationals hold not less than 51% of the capital are excluded from the wholly-owned requirement, with the procedures, controls and conditions to be set by Cabinet resolution under Article 2(4).

These are meaningful changes, but they are permissions rather than entitlements. Both depend on Cabinet action, and Article 2(1) remains the default. Anyone structuring a market-entry plan around Article 2(2) should confirm the current Cabinet position with the Ministry before committing.

Registration Is What Makes the Agency Valid

Article 3 states that the commercial agency activity may be practiced only by persons registered in the Commercial Agencies Register at the Ministry, and that any commercial agency not registered in that Register “shall not be valid.” Article 4 adds two more validity conditions: the agent must be engaged by the original principal, and the contract must be written and notarized.

Three points inside those two articles cause most problems in practice.

“The original Principal” excludes intermediaries. A contract signed with a regional office, a master distributor or a group company that is not the producer or manufacturer owning the goods does not satisfy Article 4. The agency chain has to run back to the party that owns the product.

Notarization is a validity requirement, not a formality. Article 12 requires the registration application to be accompanied by a copy of a valid business licence and a copy of the agency contract certified and notarized by the official authorities, which for a foreign-signed contract means legalization and certified Arabic legal translation before it reaches a UAE notary public.

Article 5(1) makes the statute mandatory. The agency contract is deemed to be in the common interest of both parties, this law applies to it, and “any agreement to the contrary shall not be valid.” Article 5(2) gives UAE courts jurisdiction over disputes on the contract, subject to the arbitration option discussed below.

Timelines for registration and what silence means

Article 13 gives the Ministry ten working days from completion of the registration requirements to decide, after which it issues an accredited certificate and notifies the competent local authority. Article 14 handles refusals: the Ministry must state its reasons and notify the applicant by registered letter, by hand or by email.

Article 14(2) contains the rule that catches applicants out. Failure to reply within ten working days of a complete application is itself deemed a rejection decision. Silence is not delay; it is a refusal you can appeal. Article 14(3) then gives sixty days to challenge before the competent court, counted from notification of the rejection, from becoming aware of it, or from the day after the ten-day period lapses.

Two further deadlines run at sixty days once the agency is live. Article 15 requires the agent, its legal representative or, on death, its heirs, to apply to annotate any change or amendment to the agency in the Register within sixty days of becoming aware of it. Article 16 requires an application to strike the agency off within sixty days of the reason for strike-off arising, whether that is the loss of a statutory condition or an expiry without renewal. The Ministry may also strike off on its own initiative ten working days after notifying the relevant authorities.

On fees, the Ministry’s published service card for renewing a commercial agency registration states AED 3,000 with an average delivery time of three working days.

Exclusivity granted by the agency law still sits inside the competition regime. Article 5(2) of the competition decree-law prohibits market-sharing agreements expressly subject to the commercial agencies law, and the interaction is covered in our guide to UAE competition law and merger control.

Exclusivity and the Import Block

Article 20 is where a registered agency converts into commercial power. Goods and services that are the subject of an agency registered at the Ministry may not be brought into the UAE for trading by anyone other than the agent, and the customs departments may not release such imports brought in by anyone else except with the approval of the Ministry or the agent.

This is the provision that shuts down parallel imports, and it does so at the border rather than through litigation. Article 20(2) goes further: at the agent’s request through the Ministry, the customs departments and competent authorities must attach the imports and hold them in port or importer warehouses until the dispute is adjudicated. Article 20(3) preserves a safety valve, allowing the Ministry by a justified decision to permit temporary entry of the goods or services.

Territory is set by Article 7. The principal may use one agent for the UAE as a single territory, or one agent in each emirate or group of emirates, provided distribution of the agency goods and services is exclusive to that agent within its territory. Article 7(2) then lets the agent appoint a distributor in one or more of the emirates covered by its agency, which is how sub-distribution networks are built without a second registration.

The commission that is owed even when the agent did nothing

Article 8 entitles the agent to commission on transactions concluded by the principal itself, or through others, in the agent’s territory, even if those transactions were not concluded as a result of the agent’s efforts. A principal that sells directly to a UAE customer inside an exclusive territory still owes commission on that sale. This is one of the few provisions in the law that operates automatically and needs no dispute to trigger it, and it is routinely overlooked when principals build direct e-commerce or key-account channels into a market where they already have a registered agent.

How a Commercial Agency Ends

Article 9(1) lists five ways a commercial agency contract expires: the term ends without renewal by agreement; either the principal or the agent wills it, subject to the contract’s terms; the parties agree to end it early; a final judgment declares it expired; or any other case set out in the law.

The second of those is the reform. Under the repealed 1981 law a registered agent was in practice very difficult to remove, and termination disputes commonly ended in indefinite continuation. Article 9(1)(b) now recognizes unilateral termination in accordance with the contract, and Article 10 sets the process around it.

The notice period, precisely

Article 10(1)(a) requires the terminating party to serve notice of early termination not less than one year before the date set for termination, or before the expiry of one half of the contract term, whichever is the lesser, unless the two parties agree otherwise. Article 10(3) applies the identical formula to non-renewal: notice one year before the term expires or before half the term lapses, whichever is lesser.

Read the “whichever is lesser” carefully, because it cuts in the terminating party’s favor on short contracts. On a three-year contract, half the term is eighteen months, so the one-year notice is the lesser and applies. On an eighteen-month contract, half the term is nine months, so nine months’ notice is enough. The clause is also expressly subject to contrary agreement, which means a well-drafted agency contract can set a different notice period at the outset. That drafting point is worth more than any argument made later.

Article 10(1)(b) lets either party submit a detailed report by a specialized professional entity covering settlement of dues, warranties that after-sales service will not be discontinued from the UAE market, valuation of assets and expected damage.

What happens to the outgoing agent’s stock

Article 9(2) provides that unless the parties agree otherwise, the old agent’s assets devolve to the principal or the new agent at fair value, once two conditions are met: the assets, including commodities, goods, materials, spare parts and machinery, relate to the agency contract, and they were agreed upon, are in the old agent’s possession at termination, and carry no restriction on transfer of ownership. Article 9(4) lets either party sue in the court where the agency’s head office sits to have the court value those assets and order payment.

Article 9(3) covers the gap during a fight. With the Ministry’s approval, goods or services may be brought into the UAE from exclusive sources on a temporary basis during the dispute, with the principal remaining liable throughout that period to the old agent for any compensation a final judgment awards.

Compensation: When the Agent Gets Paid

Article 11 creates two distinct compensation routes. Where the contract expires at the end of its term under Article 9(1)(a), the agent may claim compensation for the damage suffered as a result of that expiry, unless there is an express agreement to the contrary. Where the contract is terminated unilaterally under Article 9(1)(b) and that causes harm, the injured party, either of them, may claim for the damage sustained.

Article 11(2) then adds the goodwill claim that matters most in practice. The agent is entitled to compensation if it proves that its legitimate activity contributed to achieving apparent and great success of the principal’s products, led to promotion of those products or an increase in the number of customers, and that termination deprived the agent of the profit from that success.

That is an evidential test, not an automatic entitlement, and it defines what an agent should be documenting from day one: marketing spend, customer acquisition figures, market share movement, service infrastructure built, staff trained. An agent that cannot evidence its contribution to the brand’s UAE success has a materially weaker Article 11(2) claim regardless of how long it held the agency.

Note the asymmetry in Article 11(1): the end-of-term compensation right can be excluded by express agreement, while the Article 11(2) goodwill entitlement is not similarly qualified.

The Commercial Agencies Committee You Cannot Skip

Article 24(1) gives the Commercial Agencies Committee jurisdiction over any dispute between the parties to an agency registered with the Ministry, and states that no action is admitted before the courts before referral to the Committee.

The Committee’s timetable is set out in the same article:

Stage Deadline
Committee starts hearing the dispute Within 22 working days of a complete application
Committee decides the dispute Within 120 days of submission
If the Committee does not decide in time, either party may go to court Within 60 days of that period lapsing
Challenge to the Committee’s decision or its referral to court Within 60 days of notification
Challenge to a termination request under Article 10(2) Committee decides within 120 days; silence counts as rejection of the challenge

Two consequences follow that are worth planning around.

An unchallenged Committee decision becomes enforceable by itself. Article 24(2) provides that once sixty days pass from notification without challenge, the decision “shall have the same force of a writ of execution.” At that point it goes straight into the execution process like any court judgment, with no separate ratification step.

Termination is suspended while the Committee sits. Article 10(2)(d) keeps the agency contract in force until the later of the expiry of the notice period or the Committee’s decision on the dispute. Since the Committee has up to 120 days, a challenged termination can outlive the notice period. Article 25 lets the Committee call in experts or specialized entities.

Arbitration Is Allowed, but It Must Sit in the UAE

Article 26(1) preserves any agreement between agent and principal to refer disputes to arbitration. Article 26(2) then requires that arbitration to take place inside the UAE unless the parties agree otherwise.

Article 26(3) creates a tactical rule with no obvious equivalent elsewhere in UAE law: if either party resorts to arbitration after the Committee has issued its decision but within the sixty-day challenge period, the Committee’s decision has no effect and entails no consequences. Arbitration commenced in that window wipes the Committee decision out. Article 26(4) carves out contracts already in dispute before the Committee or the courts at the date the law was published.

Anyone drafting an agency arbitration clause should read this alongside the general UAE regime, in particular the default seat rules that decide which courts supervise the award. That is covered in our guide to arbitration clauses and award enforcement in the UAE.

The Transitional Rules That Still Protect Legacy Agencies

Article 30 delays the new termination regime for agencies that already existed when the law was issued on 13 December 2022. The general grace period is two years from entry into force. For two categories of agency it is ten years.

Article 30(1) provides that the expiry grounds in Article 9(1)(a) and (b), meaning end of term and unilateral will, do not apply to agency contracts in force at the time the law was issued until two years from its entry into force. Since the law entered into force six months after publication, in June 2023, that general protection ran to mid-2025.

Article 30(2) extends the delay to ten years from entry into force, so to roughly mid-2033, for two categories:

  • Commercial agencies that have been registered to the same agent for more than ten years.
  • Commercial agencies in which the volume of the agent’s investment exceeds AED 100,000,000, with the investment assessed according to standards and controls set by the Minister.

This is the single most commercially important date in the law, and it is widely misreported. A principal planning to replace a long-standing UAE agent needs to know which of those two buckets the relationship falls into before it serves any notice, because in the ten-year bucket the unilateral termination right in Article 9(1)(b) is simply not available yet.

Franchises sit awkwardly across this regime. Whether a franchise is protected by the agency law at all depends on registration, and the two possible outcomes are compared in our guide to franchising in the UAE and its legal framework.

What the Agent Must Do in Return

Article 19 imposes two positive duties on agents: to provide the spare parts, tools, materials, fittings and accessories necessary and sufficient for the maintenance of durable goods, and to provide the maintenance services that are the subject of the agency in accordance with the parties’ agreement. These are the after-sales obligations that Article 10(1)(b) then asks the professional report to address on exit, and they are the public-facing justification for the exclusivity granted by Article 20.

Article 27 gives designated Ministry and local authority employees the capacity of judicial officers to detect violations, with power to access documents relating to the agency and its registration, conduct inspections, refer violations to investigation and trial, and call on security agencies where needed. Article 27(2) obliges the agent to provide those employees with the necessary data, information and documents.

Article 22 leaves violations and administrative penalties to a Cabinet regulation rather than setting fines in the statute itself, so no penalty figure appears in the law. Article 21 separately allows the Cabinet, on the Minister’s recommendation, to release any activities or materials from the commercial agency regime altogether, in which case the Ministry strikes the affected agencies off the Register. Any sector could in principle be removed from agency protection by Cabinet resolution.

Frequently Asked Questions

Can a principal terminate a UAE commercial agency now?

Yes, in principle. Article 9(1)(b) of Federal Law No. 3 of 2022 allows the contract to expire by the will of either the principal or the agent, subject to the contract’s terms, which reversed the position under the repealed 1981 law. Article 10 requires notice of at least one year before the intended termination date or before half the contract term expires, whichever is lesser, unless the parties agree otherwise. Article 30 delays this right for agencies that existed when the law was issued.

What notice period applies to terminating a commercial agency in the UAE?

Not less than one year before the date set for termination, or before the expiry of one half of the contract term, whichever is the lesser period, unless the two parties agree otherwise. The same formula applies to a decision not to renew under Article 10(3). Because the article is expressly subject to contrary agreement, the notice period can be set differently in the agency contract itself.

Is an unregistered commercial agency valid in the UAE?

No. Article 3 states that the activity may be practiced only by persons registered in the Commercial Agencies Register at the Ministry of Economy and Tourism, and that any commercial agency not registered in that Register shall not be valid. Article 4 adds that the agent must be engaged by the original principal under a written and notarized contract. An unregistered arrangement falls outside the statutory protections, including the exclusive import block in Article 20.

Can a foreign company hold its own commercial agency in the UAE?

Only by Cabinet permission and only in limited circumstances. Article 2(1) restricts agencies to UAE nationals and wholly UAE-owned entities. Article 2(2) allows the Cabinet, on the Minister’s recommendation, to permit an international company that is not UAE-owned to hold an agency for its own products, but only where there is no existing commercial agent for that agency in the UAE and the agency is new and has not previously been registered. Article 2(3) separately excludes UAE public joint-stock companies with at least 51% UAE national shareholding from the wholly-owned rule.

Can I import products into the UAE if someone else holds the registered agency?

Not for trading. Article 20(1) prohibits bringing goods, products, manufactures or materials that are the subject of a registered agency into the UAE for the purpose of trading by anyone other than the agent, and bars customs from releasing such imports without the approval of the Ministry or the agent. Article 20(2) allows the goods to be attached and held in port or importer warehouses until the dispute is adjudicated. Article 20(3) permits the Ministry to allow temporary entry by a justified decision.

What compensation can a UAE commercial agent claim on termination?

Two kinds. Under Article 11(1), where the contract expires at the end of its term, the agent may claim compensation for damage suffered as a result, unless there is an express agreement to the contrary. Under Article 11(2), where termination causes harm the injured party may claim for it, and the agent is entitled to compensation if it proves its legitimate activity contributed to apparent and great success of the principal’s products, promoted them or increased customers, and that termination deprived it of the profit from that success.

Do I have to go to the Commercial Agencies Committee before court?

Yes. Article 24(1) states that no action is admitted before the courts before referral to the Commercial Agencies Committee. The Committee starts hearing the dispute within 22 working days of a complete application and must decide within 120 days of submission. If it does not decide within that period, either party may go to court within 60 days. A Committee decision that is not challenged within 60 days of notification carries the same force as a writ of execution.

Can an agency dispute go to arbitration in the UAE?

Yes. Article 26(1) preserves any agreement between agent and principal to arbitrate, and Article 26(2) requires the arbitration to take place inside the UAE unless the parties agree otherwise. Article 26(3) adds that if either party resorts to arbitration after the Committee issues its decision but within the 60-day challenge period, the Committee’s decision has no effect and entails no consequences.

Does the new agency law apply to contracts signed before 2022?

Not immediately, for the termination provisions. Article 30(1) delays the application of the expiry grounds in Article 9(1)(a) and (b) to agency contracts in force when the law was issued until two years after entry into force. Article 30(2) extends that delay to ten years for agencies registered to the same agent for more than ten years, and for agencies where the agent’s investment exceeds AED 100,000,000, assessed on standards set by the Minister.

Does a principal owe commission on sales it makes directly in the UAE?

Yes, within the agent’s territory. Article 8 entitles the agent to commission on transactions concluded by the principal itself, or through others, in the territory designated for the agent’s activity, even where those transactions were not concluded as a result of the agent’s efforts. This applies automatically and is a common oversight when a principal opens a direct sales or e-commerce channel into a territory that already has a registered agent.

Official Sources

Information is current as of August 2026. Every article number, deadline, threshold and procedural rule above was read from the official English text of Federal Law No. 3 of 2022 on Regulating Commercial Agencies, which was issued on 13 December 2022, entered into force six months after publication in the Official Gazette, and repealed Federal Law No. 18 of 1981. The renewal fee and delivery time were read from the Ministry of Economy and Tourism’s own published service card. Four limitations are stated rather than smoothed over. The Ministry’s service cards were read through archived copies because moet.gov.ae was not reachable from our network at the time of writing, so confirm current fees on the Ministry’s live service pages. Article 22 leaves violations and administrative penalties to a Cabinet regulation, so no fine figure is quoted anywhere in this guide because none appears in the law itself. Article 2(2) and Article 2(3) both depend on Cabinet resolutions setting the procedures, controls and conditions, and the texts of those resolutions were not retrievable, so the openings to non-UAE-owned companies are described as the statute frames them rather than as a settled route. And Article 23 leaves the Committee’s formation, rules of procedure and the fees for hearing disputes to a Cabinet resolution, so no Committee filing fee is stated. The Arabic text of UAE legislation prevails in case of any conflict with an English translation. This is general information, not legal advice.