Appointment of a reseller in the United Arab Emirates (UAE)

It sounds appealing, appointment of a well-established distributor who will serve one or more gulf states, say all Emirates. First see, than believe; if it doesn’t work out, we’ll terminate the agreement. A distributor must account for its efforts. Sounds good, however practice shows a different outcome …

The UAE apply a far-reaching protection to their resellers, while the definition of resellers is almost all-encompassing. It includes among others agents, distributors and representatives. A non-performing reseller, who misses out on revenue due to a performing equivalent (e.g. an agent or the principal/supplier himself), is commonly entitled to a percentage of revenue generated by such other reseller; which may result in commission payments going through the roof, continuously.

A ‘registered’ relationship can only be terminated upon mutual consent (unlikely) or by a UAE court, ruling in favor of the foreign principal (exceptional). Be aware when contracting a UAE reseller, one may end up with an eternal, commission generating relationship, which can become very expensive to the foreign principal.