In our article "Characteristics of the Commercial Agency Law of
the United Arab Emirates" published with Mondaq on
27.09.2016, we outlined the general applicability of the UAE
Commercial Agency Law (Federal Law No. 18 of 1981 including its
amendments). This article addresses the right to commission of a
commercial agent who is registered with the Ministry of
Upon registration, the commercial agent enjoys exclusivity
within the territory and for the products defined in the commercial
agency agreement. He is automatically entitled to commission once
such products are sold within his territory.
The commercial agent does not necessarily have to be appointed
for the whole of the United Arab Emirates. It is possible to limit
the geographical scope of a commercial agency to a single
emirate or several emirates only.
According to the Ministry of Economy, free zone
areas, unless expressly agreed upon in the commercial
agency agreement, are not considered part of the territory of the
United Arab Emirates or a single Emirate. Hence, a registered
commercial agent will not be able to claim commission due to lack
of delivery into his territory should goods be transported into a
The commercial agency must not inevitably cover the entire
product portfolio of a company. From the manufacturer's point
of view, it can be wise to initially allocate only selected
product lines or individual products to a commercial
In case a product, which is subject to a commercial agency, is
imported into the commercial agent's territory as part
of a larger overall product, such as tires on a vehicle,
only the commercial agent of the larger product is entitled to
commission. Should, however, the individual product be imported
into the territory in a separate shipment, for example as spare
parts for the larger product, the right to commission persists.
A commercial agent will not be able to claim commission if a
product is imported into his territory which indeed is
identical in structure to a product covered by his
agency but displays a different brand.
3. Direct Business
The UAE Commercial Agency Law does not prohibit a manufacturer
to conclude dealings with customers located in the territory of a
commercial agent directly without the agent's involvement.
However, in this case the commercial agent is also entitled to
commission regardless of whether he assisted in the conclusion of
the transaction or not.
The right to commission remains in place until the commercial
agency has been deleted from the register of the Ministry of
Economy. This applies irrespective of a potential time limit
stipulated in the registered commercial agency agreement.
Whenever a corporate entity or an individual decides to establish a company in the United Arab Emirates ("UAE"), choosing the appropriate location is of vital importance for the future economic success.
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