This is the **unregistered** route, and that is the point. A registered commercial agency under Federal Law 3 of 2022 gives the agent statutory exclusivity, constrained termination and compensation that the contract cannot displace. This document is for a distributor relationship the principal can actually exit.
Distribution Agreement
Unregistered distribution — not a commercial agency
This is the unregistered route, and that is the point. A registered commercial agency under Federal Law 3 of 2022 gives the agent statutory exclusivity, constrained termination and compensation that the contract cannot displace. This document is for a distributor relationship the principal can actually exit.
| Item | Detail |
|---|---|
| Supplier | [NAME], incorporated in [COUNTRY] |
| Distributor | [NAME], licence [NUMBER] |
| Structure | Unregistered distribution — not registered with the Ministry of Economy |
| Both parties confirm no agency registration | [Y/N] |
| Products | [DESCRIBE] |
| Territory | [Emirate(s) / UAE] |
| Exclusivity | [Exclusive / Sole / Non-exclusive] |
| Term | [2] years from [DATE] |
| Minimum purchase | [AED ______ or ______ units per year / None] |
| Distributor buys and resells? | Yes — on its own account |
| Resale pricing | Recommended only — the Distributor sets its own prices |
| Governing law and forum | [Emirate of ______ / DIFC / ADGM / Arbitration] |
1. Structure and Status
1.1The Supplier appoints the Distributor to purchase and resell the Products in the Territory.
1.2The Distributor purchases on its own account and resells in its own name, at its own risk and for its own profit. The Distributor is not the Supplier’s agent and has no authority to bind it.
1.3This arrangement is not registered as a commercial agency under Federal Law 3 of 2022, and neither party shall apply to register it without the other’s written consent.
1.4The Distributor shall not describe itself as the Supplier’s agent, sponsor or representative.
1.5Clause 1.3 matters. Registration triggers a statutory regime giving the agent exclusivity, protection against termination and non-renewal, compensation rights and the ability to block parallel imports. A principal who registers to accommodate a partner has given away the ability to change distributor, sometimes for decades.
2. Territory and Exclusivity
| Model | Meaning |
|---|---|
| Exclusive | No other distributor appointed and the Supplier will not sell directly in the Territory |
| Sole | No other distributor appointed, but the Supplier may sell directly |
| Non-exclusive | The Supplier may appoint others and sell directly |
5 more pages in the Word file
This is page 1 of the Word document, exactly as it appears when you open it. Fields shown like THIS are placeholders for you to complete.
These notes accompany the template and explain the drafting choices, the compliance points and the mistakes most often made with this document. They appear as a final page in the Word file, intended to be deleted before the document is executed.
A registered commercial agency under Federal Law 3 of 2022 gives the agent statutory exclusivity, protection against termination and non-renewal, compensation rights and the power to block parallel imports. Those cannot be displaced by contract. This document is for a relationship the principal can actually exit.
Clause 1.3 prevents unilateral registration. Without it, a distributor can apply to register the arrangement and convert an ordinary commercial relationship into one governed by the statutory regime. Make attempted registration a termination event, as Clause 7.3 does.
That eligibility requirement is itself a reason many arrangements cannot be registered. Confirm the current scope of the exceptions rather than assuming registration is available or unavailable.
A distributor holding the local trade mark registration has decisive leverage at renewal and can obstruct a successor after termination. The contractual prohibition in Clause 5.3 is a remedy after the fact; owning the registration prevents the problem.
Where products need regulatory registration or import approval, registrations in the distributor’s name become leverage on exit and can delay a replacement by months. Hold them in the supplier’s name from the outset where the regime permits, and make transfer an exit obligation.
Fixing or imposing the price at which the distributor may resell raises competition concerns. Recommended and maximum prices are generally acceptable. A recommendation enforced through withheld supply, cut rebates or threatened termination is price fixing in substance, whatever the contract says.
A UAE company may only trade in what its licence covers. A distributor without the right activity cannot lawfully import or sell, which becomes the supplier’s problem at customs and in the market.
Product labelling, marking and conformity requirements apply on import, and Arabic labelling is required for many categories. Non-compliant goods sit at the port. Agree who is responsible and confirm requirements for the specific product before the first shipment.
Exclusivity without minimum commitments gives the distributor a locked territory with no obligation to develop it. Conversion to non-exclusive is usually a more useful remedy than termination, and it is easier to exercise.
Exclusive appointments prevent the supplier selling directly even to accounts it already holds. Sole appointments preserve that ability. Reserving named accounts in a schedule resolves most of the tension.
A distributor left holding inventory it can no longer sell will fight about it. Agree whether repurchase is an obligation or an option, at what price and in what condition, at the outset — silence guarantees a dispute at the worst point.
A twelve-month restriction confined to customers actually supplied under the agreement is defensible. A general market-wide non-compete is harder to justify and harder to enforce.
The distributor may be liable to end customers as the supplier of record and may be the importer for product safety purposes. Insurance, warranty handling and recall cooperation matter more here than in an ordinary supply arrangement.
Cease trade mark use, transfer registrations, recover materials and resolve stock before appointing a successor. Overlapping appointments create liability to both parties and can leave the incoming distributor unable to import.
Reflects UAE law current as of {{DATE OF USE}}. Federal Law 3 of 2022 on Regulating Commercial Agencies, its eligibility exceptions and transitional provisions, competition law guidance, product safety and labelling requirements and customs rules all change — take UAE legal advice before appointing a distributor, and specifically before agreeing to any registration.
This is a ready-to-use template provided for convenience. Laws and requirements change, and every situation is different — please have it reviewed by a qualified professional (a lawyer, corporate secretary, or accountant as relevant) before you rely on it.