FEDERAL DECREE LAW NO. 3 OF 2022
REGULATING COMMERCIAL AGENCIES

HIGHLIGHTS OF LAW NO. 3 OF 2022 REGULATING COMMERCIAL AGENCIES

The New Agency Law allows multinational corporations, even if they are not controlled by a UAE person, to exercise commercial agency for the items they possess provided the Minister recommends it and the business is within the restrictions established by the Minister.

The following are some of the significant changes brought about by the New Commercial Law:

• The types of businesses that can operate as registered commercial agents have been extended.
• The grounds under which a principal may terminate a registered commercial agency agreement have been broadened in some cases.
• Parties can agree to resolve agency issues through arbitration, which was previously not permitted under commercial agency law.

Furthermore, the Law relies substantially on conditions agreed by the parties to a commercial agency agreement. Companies should consequently pay special attention to crafting clear and explicit provisions in agency contracts.

ISSUER OF LAW NO. 3 OF 2022 REGULATING COMMERCIAL AGENCIES

The issuer of the “Regulating Commercial Agencies Law” in the UAE is promulgated at the federal level by the UAE Ministry of Economy.

WHO IS SUBJECT TO THE ‘REGULATING COMMERCIAL AGENCIES LAW’?

The “Regulating Commercial Agencies Law” in the UAE primarily applies to individuals, entities, and parties involved in commercial agency relationships within the country. Here are the main groups subject to this law:

• Individuals or companies that act as commercial agents in the UAE, representing foreign manufacturers, suppliers, or principals.
• Entities based outside the UAE that appoint commercial agents to represent their products or services in the UAE.
• Government Authorities
• Lawyers, legal advisors, and consultants