Extended scope allows public joint stock firms to take ‘agent’ roles
It will be allowed after UAE Cabinet approval on Ministry of Economy recommendations
The revised UAE Commercial Agency Law widens the scope of who can take on the mantle of a commercial agent representing an international brand or business in the UAE.
Apart from UAE Nationals or businesses owned and operated by them, a public joint stock company where the UAE National shareholding is at least 51 per cent can be a commercial agent. Extending the scope to Public Joint Stock Companies can play out in two ways.
“For UAE family businesses with extensive commercial agency interests could seek a stock market listing for that particular division,” said an analyst. “Or some of the listed enterprises could expand the scope of their operations to take on commercial agency rights – provided they have 51 per cent or more UAE National shareholder base.
“The business landscape is extremely fluid, and there could be changes in the partnership arrangements between international brands and their current UAE commercial agents.”
There is also another option, where the international brand also takes on the dual role of being its own agent in the UAE. This, however, will require clearance from the UAE Federal Cabinet itself on recommendation from the Ministry of Economy.
To qualify as commercial agents, the international brands must conform to these requirements:
■ There should have been no commercial agent registered for the relevant product in the UAE; and
■ There has not previously been a commercial agent registered for the relevant product(s) in the UAE. “Termination of a commercial agency contract can happen on expiry of the period stipulated - or earlier if mutually agreed between the parties,” said Atik Munshi, Managing Partner at Finexpertiza UAE.