This portal will be closed soon, please visit the new national portal. Commercial agency and distribution agreements in the uae are regulated by the uae agency law federal law 18 of 1981, as amended. M5 dated 110689h, corresponding to 25081969 and its implementing regulations the. A guide to doing business in the kingdom of saudi arabia 5 political environment saudi arabia is by far the largest country by size, population and economy in the middle east.
Role of the commercial court 260 resolution by arbitration 261 rules for the conduct of arbitration 263 arbitration proceedings 266 rights and duties of arbitrator 266 arbitration awards 269 11 law of agency 1. Unlike the situation under uae agency law a foreign producer has always been able to appoint two or more agents or distributors in saudi. Law states that a quali ed commercial agent will be deemed. Definitions article 1 the following terms and phrases wherever mentioned in this law shall have the meanings assigned thereto unless the context requires otherwise. Doing business in saudi arabia 2017 country commercial.
Environmental protection administration mepa, is the primary agency in the kingdom of saudi arabia with responsibility for environmental issues. The kingdom of saudi arabia the kingdom is an islamic monarchy that was established as a state on 23 september 1932 g. The new saudi companies law came into effect on 2nd may 2016 the effective date. Development and restructuring of the saudi banking system. The central institution of saudi arabian government is the monarchy. The new government tenders and procurement law will prove to be a key facilitator in achieving saudi arabias goals to reduce dependence on oil, diversify the saudi economy and develop the health, education, infrastructure, military, recreation and tourism sectors. Saudi business people cannot act as commercial agents unless their names are entered into the register maintained by the ministry of commerce and industry. We, tamim bin hamad al thani, emir of the state of qatar. Saudi labour law 5 article 10 all periods and schedules provided for in this law shall be according to hegira calendar, unless otherwise stated in the work contract or the work organization regulation. The saudi arabian foreign investment law stipulates that the saudi arabian general investment authority sagia must license all foreign investment in saudi arabia. Commercial agencies law pursuant to the uae commercial agencies law federal law no. Law and regulations 1999 application forms pdf format to download the pdf documents, adobe acrobat is required. The judicial system of the kingdom of saudi arabia bsa. The law of commercial data the law of commercial register the law of commercial register arabic company law.
The law provides that only a saudi national or a wholly saudi owned entity is entitled to act as a commercial agent in saudi arabia and the agreement must be registered with the commercial agencies department at the ministry of commerce and industry. Law of commercial register embassy of saudi arabia in. Article 2 the following terms and phrases, whenever mentioned in this law, shall have the meanings expressed next to them, unless the context requires otherwise. Commercial january 2016 the new saudi companies law and its implications for ksa companies 1 the new law also follows the enactment of the new united arab emirates commercial companies law federal law no. Commercial company law is used as a baseline for the franchise business model. Agency contract under conventional law and islamic law as.
We all too often see the aftermath of a failure to appreciate local laws and customs, when seeking advice at the outset could have significantly reduced, if not eliminated, the issues parties may face. Under the 1962 commercial agency regulations, nonsaudis are not permitted to act as commercial agents in saudi arabia. The appointment of a ksa commercial agent is one way in which a foreign company can penetrate the market without establishing a direct presence in the ksa. Saudi authority for intellectual property wikipedia. The new saudi commercial agencies regulation on june 23, 1980, royal decree m321 was promulgated, amending the saudi commercial agencies regulation which first came into effect in 1962. The commercial agencies law as enacted by royal decree no. In 1992 the basic law was adopted, declaring that the country is a monarchy ruled by the sons and. Saudi arabia pursues a liberal trade policy with no quantitative or price restrictions for importers. Unregistered agreements do not attract the protection of the agency law. Doing business guide understanding saudi arabias tax position. Saudi agent and the registration of agreements between the agent and its foreign principal in the commercial agencies registry maintained by.
Most foreign companies seeking to establish a longterm presence in saudi arabia choose to do so via a commercial agency agreement with a local partner. From its very beginning, the founders of the kingdom have made it amply. Understanding employment law in the kingdom of saudi arabia background understanding employment law in the kingdom of saudi arabia is important for any business operating in, or seeking to enter, the saudi market. The commercial agency law overview a commercial agent is. Historic overview saudi arabia was created in 1932 when abdulaziz bin saud the first king of saudi arabia, also known as ibn. Under saudi arabian commercial agencies act, the agent is obliged to register the agency agreement at the agencies agreements department at the ministry of commerce. English translation of implementing regulation of the. Contract law in saudi arabia is governed by the conservative hanbali school of sharia law, which adopts a fundamentalist and literal interpretation of the quran. Understanding employment law in the kingdom of saudi arabia.
Emirates have enacted legislation which forces foreign producers to. Corporate law in kingdom of saudi arabia this section provides information on saudi company law and the legal system of the kingdom of saudi arabia. However, there are a number of regulations and procedures governing business and trade in the kingdom and adherence thereto could be very helpful for those intending to do business in saudi arabia. The legal system of saudi arabia is based on sharia, islamic law derived from the quran and the sunnah the traditions of the islamic prophet muhammad. Agency agreements and agents 271 general nature of agency 273 how agency arises 275 ratification 278 categories of agents 281. Agency law regulates these commercial agency and distribution agreements in the uae as per the amended federal law 18 of 1981 commonly known as agency laws. The draft franchise law is now in the final stages of legislation and should be issued sometime in the second half of 2019.
Although there is no specific franchise legislation, a ministerial order was issued in march 22, 1992 allowing for the franchisee business to be treated under the saudi commercial agency law and it is rumored that franchise legislation in coming soon to help regulate. However, any business wishing to enter the uae market must consider the impact of the applicable uae commercial agency regime. In general, saudi arabian law does not prevent a multinational company from making. Some of saudi arabias wto commitments simply reflect existing provisions of saudi law while others represent changes to existing saudi laws.
Uae commercial agency law a detailed insight sta law firm. All that is given to the worker for his work by virtue of a written or unwritten work contract regardless of the kind of wage or its. In addition, no one can act as a commercial agent unless his name has been entered into the register maintained by the ministry of commerce. M61 dated 17121409h and its implementing regulations issued by ministerial decision no. The saudi arabian commercial agency law as enacted by royal decree no. Apr 06, 2018 the key principles of contract law derive from sharia or islamic principles, the primary source of law in the ksa, but which are not codified. Key commercial contract considerations registration of. Its interpretation by judges in saudi arabia is influenced by the medieval texts of the literalist hanbali school of islamic jurisprudence. The duty to register lies solely on the saudi commercial agent supra. Saudi markets and who have registered saudi commercial agents or distributors can.
A guide to doing business in the kingdom of saudi arabia 3 clifford chance middle east clifford chance is one of the longest established international law firms in the middle east. Original agency contract attested by a the competent official. Implementing regulations clarifying the operation and effect of a number of the provisions of the new law. Additionally, treaties and agreements with states and international organisations and agencies to which saudi arabia is committed form part of. For legal advice, it is recommended that you consult a specialised lawyer, qualified in this field. Limiting commercial agencies to saudi nationals, registration of saudi agents in a special register with the ministry of. Regulatory rules and procedures issued pursuant to new. The most liberal commercial agency law of the gulf hundt legal. The saudi commercial agencies law was not suitable for franchises and so in 2017, the ministry of commerce and investment moci issued a draft franchise law subject to discussions the franchise law. English translation of implementing regulation of the finance companies control law chapter one definitions and general provisions article 1 the following terms and phrases wherever mentioned in this regulation shall have the meanings assigned thereto unless the context requires otherwise. Implementing regulations clarifying the operation and effect of a number of the provisions of the new law have recently been through a consultation phase and are due to be issued in the coming months. A well recognized exception to this general rule is the concept of agency. Kingdom of saudi arabia capital market authority corporate.
Thus, along with general uncodified sharia principles and rules of contract, the cal and irs have been the sole and defacto set of statutory rules governing the franchise relationship in saudi arabia 1 the commercial agencies law, enacted by saudi arabia royal decree no. Kingdom of saudi arabia capital market authority corporate governance regulations english translation of the official arabic text issued by the board of the capital market authority pursuant to resolution number 8162017 dated 1651438h corresponding to 22017g based on the companies law issued by royal decree no m3 dated 2811437h. The kingdom of saudi arabia the ksa is attracting increasing levels of interest from foreign investors in a broad range of sectors. Commercial agency agreements in the kingdom are governed by the commercial agency act and associated regulations the act. Competition law competition law competition law cooperative insurance companies control law cooperative insurance companies control law corporate governance regulations implementing rules for the cooperative insurance companies control. To avoid any confusion arising from the repeal of the previous law of commercial register and its replacement by the new law, article 19 provides for the repeal of the law of commercial register issued by royal order no. Implementing legislation agency agreements are regulated under the commercial agencies law issued by royal decree no. The new saudi commercial agencies regulation smu scholar. A n agency agreement is a legal contract which creates a fiduciary relationship between two parties, whereby the first party the principal agrees that the actions of the second party the agent binds the principal to later agreements made by the agent, as if the principal himself, had personally created the agreements. Saudi arabia national report world arbitration reporter.
The saudi commercial agency law does not require a commercial agent to enjoy exclusivity for the contractual territory and the agreed product line. Doing business in saudi arabia market overview the saudi arabian economy is the largest in the gulf region, and saudi arabia is the only g20 member country in the region. An overview of the legal system in the kingdom of saudi arabia, the court structure, judiciary and legal representation. Creation and termination of agency it is a general principle of contract law that only the parties to the contract acquire rights and liabilities under it. The saudi arabian foreign investment law stipulates that the saudi arabian general. Saudi national portal rules, regulations and policies. Islam defines all aspects of life including business and marketing based on islamic law. If the employer assigns all or part of his original business to a natural or. Article 2 no natural or corporate entity, other than saudis, shall be permitted to operate as a commercial agent in ksa. The embassy of the kingdom of saudi arabia 601 new hampshire.
In addition, the law in the ksa consists of legislation passed by government which is secondary if it conflicts with sharia principles, which also govern commercial activities in the ksa. Doing business in saudi arabia 2017 country commercial guide. Implementation rules for commercial agencies regulations no. He has also been involved with some chamber of commerce committees for the drafting and amendments of various saudi commercial regulations, such as the commercial agency law, and the regulations for the prevention of bankruptcy. A model contract originally issued in 1981 but revised in 1983 was recommended by the ministry of commerce for this purpose. Saudi arabia has an oilbased economy with petroleum accounting for approximately 62 percent of government revenues, 44 percent of gdp, and 72 percent of export earnings in 2016. The economist intelligence unit, world bank, central intelligence agency factbook 04 doing business guide understanding saudi arabias tax position saudi arabia saudi arabia is an oilbased economy with the largest proven crude oil. The first set was issued in 1977 under the title of commercial agency law. The basic law of the kingdom of saudi arabia 3 reaffirmed the kingdoms status as an.
Franchise 2020 laws and regulations saudi arabia iclg. The law requires a direct relationship between the business agent or distributor of products and the originator company abroad. Any contract that is not specifically prohibited under sharia law is legally binding, with no discrimination against foreigners or nonmuslims the hanbali school is the most liberal among the four sunni schools with respect to the. One of the key benefits of registration, pursuant to federal law no. Act, the agent is obliged to register the agency agreement at the agencies. Different sets of rules on agency contract in oman oman has three sets of legal provisions on agency contract. Commercial agencies in the kingdom of saudi arabia. The agency law only applies if the agency agreement is registered with the uae ministry of economy. The new law sets out the following key changes in relation to the regulation of companies in ksa. M5 dated 110689h corresponding to 25081969 and its implementing regulations the agency law establishes a comprehensive framework that governs the relationship between the ksa agent and foreign principal. Kingdom of saudi arabia capital market authority regulatory rules and procedures issued pursuant to the companies law relating to listed joint stock companies english translation of the official arabic text issued by the board of the capital market authority pursuant to resolution no. The sources of sharia also include islamic scholarly consensus developed after muhammads death. His job includes legal advising, mediation, and working as a secretary of the arbitration board. Under saudi arabian commercial agencies act, the agent is obliged to register the agency agreement at the agencies.
54 936 1505 334 267 75 1516 1303 1024 929 1045 1417 1260 1262 271 707 641 184 1462 918 1185 745 1054 726 303 818 140 970 175 649 1477 1351 725 717 1030 615 1093 224