Picture for illustrative purposes only.


New legislation exclusive to UAE citizens will come to effect in June

The new commercial agencies law of the UAE will take effect on June 16 to increase the competitiveness and economic performance of the country, according to the Ministry of Economy (MOEC).

The Federal Decree-Law replaces the prior 40-year-long regulation and ensures that consumers receive high-quality products while having a favorable business environment for boosting national and foreign direct investments.

Abdulla Al Saleh, the undersecretary of Foreign Trade and Industry, said in a recent press conference that the new law aims to “strengthen the growth of the commercial agencies sector, diversify its activities, boost its economic performance and increase its contribution to the country’s gross domestic product.”

How does commercial agencies law work?

The commercial agencies law is exclusive to UAE citizens, allowing them to conduct business in the commercial agencies sector to create new commercials and investment ventures.

Public joint-stock companies with a national capital contribution of 51 percent are allowed to act as commercial agents. Under certain conditions, any international company may also serve as a commercial agent for its products but with the approval of the UAE Cabinet.

MOEC also stated that the agency contract could be terminated under the commercial agencies law. The termination provisions of the agency contracts will take effect for any existing agency contracts after two years.

The agency contract has an additional ten years to terminate contracts that have been in place for more than ten years or when the agent’s investment exceeds Dh100 million to preserve stability and national investments. KD/Expat Media

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