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Law No. 13 of 2016 regarding the Commercial Agencies

 

As a part of the continuous economic corrections adopted by the government of Kuwait, a new law was issued at the beginning of 2016 arranging the commercial agencies (the “Law”) to supersede previous relevant laws which were allowing products and services monopoly through an exclusive agent or distributor in Kuwait.

The Law stipulated upon the eligibility criteria to be appointed and registered as a local agent or distributor in Kuwait which are:-

  1. To be an individual or individuals with Kuwaiti nationality or a Kuwaiti company however that the Kuwaiti partners in this company must own at least 51% of its shares.
  2. To be registered in the commercial registry.
  3. To have a license to operate in the same field of the agency scope.
  4. To conclude a direct agency agreement with the principal or its legal representative.

The Law expressly upon the minimum requirements which should be clearly mentioned in the agency agreement which are:-

  1. The name of the local agent or the distributor and also the name of the principal and its nationality.
  2. The services or/and the products included in the scope of the agency agreement.
  3. The mutual rights and obligations of the agent or the distributor and the principal in addition to the representation limits of the agent or the distributor.
  4. The geographical territory of the agency.
  5. The duration of the agency agreement and its renewal methodology.
  6. The methodology of the agency expiration or termination.
  7. Any other terms and conditions which are not conflicted with the Law.

Furthermore, the Law allowed the appointment of more than one agent or distributor for the Principal in Kuwait without any restriction besides the conditions of providing the repair and after sale services related to products even if the products were not purchased from the local agent.

A local agent or distributor must register the agency agreement within the designated register at the Minister of Commerce and Industry and any unregistered agency will not be considered.

To be continued……

 

MMA Law