The agency statutes that frighten European vendors bite only on a registered commercial agency, and registration requires local ownership the reseller you want usually lacks. What binds you instead is your own contract, Saudi Arabia's franchise law if the agreement grows teeth, and in the UAE a competition rule with no safe harbour.

That is the short answer, and it inverts the usual advice. The fear a European software company brings to its first Gulf channel conversation is that Gulf law will trap it with a distributor it cannot remove. The truth is narrower and more useful: those protections attach to a registered commercial agency, registration is gated on local ownership, and the reseller a software vendor actually wants is usually not eligible. The exposure moves somewhere else, and this piece is about where.

It is also worth being clear about why you need a partner at all, because that question has a published answer in Saudi Arabia and almost nobody has looked at it. We did, and the result is in the first section below.

Instruments and figures here were checked against their primary sources on 30 October 2026. Quotations from the UAE Commercial Agencies Law, the UAE competition legislation and the Saudi Franchise Law are from the official English texts published by the UAE Ministry of Economy and Tourism and by the Saudi Ministry of Investment. The 2023 UAE Cabinet and Ministerial Decisions on commercial agencies are hosted by the Ministry in a Lexis Middle East translation rather than a ministry one, and are attributed that way below. Quotations from the Saudi Commercial Agencies Law, the Qatari Commercial Agents Law and the Omani Commercial Agencies Law are our own translations from the Arabic, because no official English article text of any of the three could be located; the Arabic governs. In the Saudi case the one English-titled government file we found, the Ministry of Investment's "COMMERCIAL AGENCIES LAW" PDF, is a three-page print of a Bureau of Experts record page carrying a summary and metadata but no article text, and the Law is absent from the Ministry's current English law library. Bahraini quotations are from the Ministry of Industry and Commerce official English of Legislative Decree No. 10 of 1992 as amended; the Legislation and Legal Opinion Commission's own English consolidation renders Article 8(d) as applying to termination before the fixed term expires rather than on its expiry, and we follow the Ministry text, which is the only reading consistent with a refusal to renew. The Qatari competition law is quoted from the English on WIPO Lex, which is not stated there to be an official translation, checked against the Arabic on the Qatari Ministry of Justice legislation service. Kuwait is deliberately absent: the primary texts of its commercial agency and competition statutes could not be obtained, and we do not quote a law firm's summary as if it were the law.

Who actually holds the contract in a Gulf software deal

Saudi Arabia publishes its government procurement awards, and the award record is public, free and needs no account. We pulled the telecommunications and IT category and filtered for announced awards, then retrieved the award table for each tender. The sample is 569 awarded tenders in the telecommunications and IT category, carrying 591 award rows, 273 distinct awarded suppliers, and 3,061 bid rows from 840 distinct bidders. Most of it is recent: 313 of the tenders closed in 2026 and 111 in 2025. By procedure, 452 were open competitions, 108 direct purchases and 9 framework competitions.

Of those 569, 409 have titles that name a licence, a subscription, software, a programme, a platform, an application or cloud, in Arabic or in English. Those 409 tenders produced 429 award rows, and the number awarded to a software vendor's own legal entity is zero. Not a Microsoft entity, not an Oracle entity, not SAP, Adobe, Cisco, VMware, Veeam, Esri, Google, IBM or Salesforce. In the wider 591 rows there is exactly one award to a global technology product vendor's own company, Siemens Limited, and it is not a software contract: it is maintenance of the distributed control and programmable logic systems at a desalination plant, at SAR 672,520.00.

Narrow it further. In 126 of those tenders the buying agency named a specific international product or vendor in the tender title. The products named most often are Oracle, Microsoft and Adobe. Those 126 tenders carry 127 award rows, and the number awarded to the named brand's own entity is also zero.

Three examples a reader can open. The Zakat, Tax and Customs Authority ran a tender titled, in translation, "renewal of the licences with the parent company (Veeam)". Eleven companies bid, nine of them technically compliant, every one of them a Saudi intermediary. Veeam did not bid. The award went to Al-Nahl Computer Company at SAR 3,999,999.00 against a cluster of competing offers between SAR 6.1m and SAR 7.6m. The Ministry of Municipalities and Housing tendered the Oracle licence agreement for the whole municipal and housing sector: eight bidders, all eight technically compliant, awarded to Imdad Al-Hulul Information Technology at SAR 24,551,978.25. And the Saudi Tourism Authority put out a tender titled, in English in the original, "ERP License renewal": six bidders, only three of them technically compliant, awarded to Zone Trading Company at SAR 9,090,697.10, with the Saudi branch of LTIMindtree bidding lower at SAR 9,001,554.11 and losing on a non-compliant technical offer. Al-Jeraisy bid lower still at SAR 8,743,227.58 and was compliant, so price alone did not decide that one either.

The honest version of this finding matters more than the blunt one. The vendors are not bidding and losing. They are not bidding. Of the 840 distinct bidders, ten are a registered branch of another company rather than a Saudi-incorporated firm, and most of those are IT services firms, systems integrators and certification bodies. The one software vendor's own branch in the sample is IBM Middle East, which appears twice. In the better of the two it bid SAR 60,379,361.94 for a loan management system at the Social Development Bank, was marked technically compliant, and lost to Al Moammar Information Systems at SAR 23,979,779.30.

So the barrier is not nationality. Foreign-owned companies do hold Saudi government software contracts: Devoteam's Saudi subsidiary won seven of the 591 awards in our sample, and the Saudi branch of a Pakistani systems integrator won one outright. The pattern is a difference between kinds of company, not kinds of passport. Product vendors sell through channel. IT services firms incorporate locally and bid in their own name. If you are the first kind, the contract will be held by somebody else, and the only question is who.

One thing to resist. The intermediary tier is identifiable but it is not a cartel, and anybody who tells you a dozen firms control Saudi software procurement is wrong. Sixty-two suppliers hold three or more awards in the sample, and between them they hold 330 of the 591 rows, which is 55.8 per cent. But 161 suppliers appear exactly once. The long tail is real, and a new partner can win.

Who the buyer is and how it scores you is a separate subject, covered in how Gulf enterprise procurement actually works, and what the record says about price is in pricing software for GCC buyers. This section is only about who signs.

The label on your agreement does not decide which law applies

Vendors spend drafting effort on the word at the top of the document, as though calling something a reseller agreement rather than an agency agreement decided its legal character. In the Gulf it does not, and the definitions say so.

The UAE definition is broad on purpose. Article 1 of Federal Law No. 3 of 2022 Regulating Commercial Agencies defines a Commercial Agency as "The representation of a Principal by an Agent under a contract of agency, distribution, sale, offer or concession, or the provision of a commodity or service within the State in return for a commission or profit." Distribution, sale and concession are all named, and the consideration may be profit rather than commission, so buying for your own account and reselling at a margin does not put you outside the words. Note too that the UAE covers services, not only goods: the same article defines the Principal as "The producer or manufacturer owning the commodity or service inside or outside the State", and the register itself records "its subject including goods or services", under Article 2(2) of Ministerial Decision No. 214 of 2023 in the Lexis translation the Ministry publishes. A software agency is registrable in the UAE. If anybody tells you the UAE agency regime only reaches physical goods, they are describing Saudi Arabia.

Saudi Arabia reaches distributors too, but by a later amendment rather than in the original text. A provision added to the Commercial Agencies Law by Royal Decree No. M/32 of 10/08/1400H applies the Law, in our translation of the Arabic, to "every person who contracts with the producer, or with whoever stands in his place in his country, to carry out commercial business, whether as an agent or as a distributor, in any form of agency or distribution." Cite that by its amending decree rather than by an article number, and the reason is demonstrable: the WIPO Lex consolidated Arabic numbers it as Article 5, while the Bureau of Experts consolidation carries it as an added first article. What Saudi Arabia does not have is a services limb anywhere in the Law itself: Article 3 has the register record "the type of merchandise in respect of which the agency is granted", the Arabic word for services does not appear in any of the Law's articles, and the obligations the amending decree adds are about spare parts and the maintenance of products. We could not obtain the Implementing Regulations issued by Ministerial Decision No. 1897 of 24/05/1401H, so that negative is stated for the Law and not for the subordinate instrument. A pure software licence appointment still has nothing the Saudi register was designed to record.

Qatar is the outlier, and it is the cheapest piece of structuring available anywhere in the Gulf. Article 2 of Law No. 8 of 2002 defines a commercial agent as a person who "alone and to the exclusion of others" is licensed to distribute goods and products or to perform specified services, and a second paragraph added by Law No. 2 of 2016 extends the Law to a distributor, in our translation, "on condition that he is its sole distributor." Appoint two resellers in Qatar for the same products instead of one and the statute does not reach the arrangement at all. No filing, no waiver, no negotiation. Two qualifications: the sole-distributor test looks at the product line, so two resellers each handling a different line may each still be the sole distributor of its own, and Qatar covers services as well as goods, so the Saudi goods-only point does not travel there. Just do not sign a sole distribution agreement in Doha unless you have decided you want the regime that comes with it.

Who may hold a registered agency, and why your partner probably cannot

Every one of the five Gulf agency statutes we could read conditions its protective regime on registration, and conditions registration on local ownership. The gates are these.

The UAE, under Article 2(1), limits the practice of commercial agency business "to individual citizens, and companies and institutions that are wholly owned by any of the following", namely a UAE national, a public legal person, a private legal person owned by public legal persons, or a private legal person wholly owned by UAE nationals. Saudi Arabia, in Article 1 of the 1962 Law, provides in our translation that non-Saudis "whether as natural or legal persons, may not be commercial agents in the Kingdom", that a Saudi agency company's capital must be wholly Saudi, and that its directors and the persons who may sign on its behalf must be Saudis. Qatar requires, under Article 11(1), that the applicant be of Qatari nationality and that a company applicant have all of its capital Qatari. Bahrain requires 51 per cent Bahraini shareholding and a registered office in Bahrain, under Article 14(b)(3) of Legislative Decree No. 10 of 1992. Oman requires, under Article 3 as amended by Royal Decree No. 73/96, that a company applicant be registered in the Commercial Register with its head office in the Sultanate, and separately that "the share of Omanis in its capital shall not be less than 51 per cent."

Read those gates carefully, because they are not the same gate. The UAE, Saudi Arabia and Qatar require the agent to be wholly locally owned, which shuts out any foreign-owned reseller completely. Bahrain and Oman require only a local majority, so a partner with 49 per cent foreign equity is eligible in both. Oman narrows its own law in a different and more useful way: Article 1, as replaced by Royal Decree No. 73/96, reaches only a producer or supplier with no legal presence in the Sultanate, so a vendor that has incorporated in Oman is outside the Omani agency law altogether.

There are two UAE exits from the baseline and neither is a route a vendor can simply elect. Article 2(2) lets the Cabinet, on the Minister's recommendation, "allow any international company, even if it is not owned by citizens, to practice the Commercial Agency business for the products it owns", under the conditions it deems appropriate, but only where "This Commercial Agency does not have a commercial Agent inside the State" and "The Commercial Agency is new and not previously registered in the State." It is a discretionary permission, product-specific, and available only before you have ever appointed anyone. The penalty table annexed to Cabinet Decision No. 89 of 2023 confirms what kind of thing it is: an international company engaging in commercial agency business for its own products "without obtaining the approval of the cabinet in accordance with the Law" is met with "Cancellation of the commercial agency", with no warning step and no fine tier. Article 2(3) then excludes UAE public joint stock companies with at least 51 per cent national shareholding, but Cabinet Decision No. 83 of 2023 adds conditions the Law does not contain, including that the company's "activity and the purpose for which it was established shall be to carry out the commercial agency business", that it must carry that business out "by itself", and that it forfeits the right if "Non-nationals' equity in the capital increased to (49%)".

Then there is a quieter requirement that may do further work for a software vendor. Ministerial Decision No. 214 of 2023 requires, among the registration documents, "The agent's valid commercial licence issued by the competent authority", and Article 1 of the Law defines the Competent Authority as "The local authority in the concerned emirate". Read together, those two instruments point at a mainland emirate licence rather than a free zone one. Treat that as a reading of the text and not a ruling, and note the two obvious answers to it: a free zone authority is itself an authority of its emirate, and Article 12(1) of the Law asks only for "A copy of a valid business license" with no competent-authority qualifier. Nothing turns on it, because the Article 2(1) ownership gate already decides the question for a foreign-owned reseller.

The practical consequence is the one that matters. The partner a European software vendor actually wants, a technically capable, foreign-owned or mixed-ownership IT reseller, cannot be a registered commercial agent in Saudi Arabia or Qatar at all, can be one in the UAE only in the narrow Article 2(3) case of a public joint stock company whose stated purpose is the agency business and whose non-national equity stays below 49 per cent, and can be one in Bahrain or Oman only if local shareholders hold the majority. The entity question on the vendor's own side, and the UAE agency articles in outline, are covered in do you need a local entity to sell software in the UAE.

Registration is a switch, and in the UAE your partner controls it

If your partner is one of the eligible minority, the position changes completely, and it changes on your partner's initiative rather than yours. Article 3(1) of Ministerial Decision No. 214 of 2023 is short: "The agent shall file a request to register his Commercial Agency via the Ministry's Electronic Service Platform." The agent files. It needs the notarised contract, which it has, because you gave it one.

What flipping that switch turns on is substantial. Article 3 of the Law provides that "Commercial Agency business may not be practiced in the State except by those who are listed in the Commercial Agencies Register in the Ministry. Any Commercial Agency that is not listed in this Register shall not be valid", and Article 4 that validity requires engagement "by the original Principal under a written and documented contract" plus registration. Be careful with what "shall not be valid" does: the Law says the commercial agency, meaning the statutory status, is not valid. It does not say your commercial contract is void, and we could not pin the downstream effect to a UAE primary instrument or a reported judgment. The safe statement is that an unregistered arrangement cannot invoke this Law, not that an unregistered reseller cannot sue.

What it cannot invoke is the valuable part. Article 24(1) gives the Commercial Agencies Committee jurisdiction over disputes "between the parties to a Commercial Agency registered with the Ministry". Article 2 of Cabinet Decision No. 89 of 2023 limits the whole administrative penalty regime to "commercial agencies registered with the Ministry". So the one-year notice, the compensation claim, the Committee and the customs block are all on the far side of registration.

Two details in the subordinate instruments are worth knowing because almost nobody writes about them. First, UAE registration is annual, not perpetual: Ministerial Decision No. 214 of 2023 has the Ministry issue a certificate "valid for one year from the date of registration", and the Cabinet Decision No. 89 of 2023 table escalates failure to renew from a warning, to a fine of AED 20,000, to "Temporary cancellation of the commercial agency with the Ministry in case of failure to renew the registration for the second year in succession", to final cancellation on the third. A registered agency that stops paying attention dies on its own. Second, Cabinet Decision No. 82 of 2023 provides at Article 3(7)(e) that once the Committee has decided a dispute by terminating the agency, the agency is written off "even if its decision has been challenged in court", and the principal may appoint a new agent "to be duly registered, after the commercial agency is written off". That is not unconditional: the same clause suspends both effects "if a final judgement or decision is issued by the court annulling the decision to write off the agency or staying the execution of the write-off decision". So you can move while an appeal is pending, and a stay can strand you.

Saudi Arabia draws the line in a harsher place, though not a structurally different one. The UAE does both things: Article 3 prohibits practising commercial agency business unregistered and declares an unregistered agency invalid, and the Cabinet Decision No. 89 of 2023 table penalises "Failure to register the commercial agency in the Ministry's commercial agencies register" with a warning and then a fine of AED 40,000. Saudi Arabia's version of the same prohibition is far more aggressive. Article 4, as amended by Royal Decree No. M/32 of 10/08/1400H, provides in our translation for "a fine of not less than five thousand riyals and not exceeding fifty thousand riyals, together with publication of the penalty at the violator's expense, and without prejudice to the right of any person harmed by the violation to claim compensation", and then adds a limb that European vendors should read twice: where the violation "is attributed to a foreigner, or to a Saudi company in which there is one or more non-Saudi partner", the penalty becomes, in addition to the fine, "the administrative liquidation of the business, with the possibility of being barred from practising trade permanently or for a specified period", and the Minister of Interior may order the foreigner's deportation from the country "in light of the penalty adjudged", with the Ministry of Commerce under a duty to notify him of the foreigner or the non-Saudi partner. Bahrain, under Article 13(b), provides that an unregistered agency "shall not be recognized nor shall any action be heard in respect thereof", and Oman to the same effect at Article 11(d). Qatar's Article 16 has two limbs and the second is asymmetric. In our translation: "In applying the provisions of this Law, no commercial agency not registered in the commercial agents register shall be recognised, and no action arising out of it shall be heard from the person who has breached the registration obligation." The first limb is the same non-recognition rule as Bahrain's and Oman's. The second bars only the party in breach of the registration duty, which is the agent rather than you.

The drafting answer follows directly, and it costs nothing. Put an eligibility representation in the agreement, and prohibit the partner from registering the arrangement as a commercial agency anywhere in the GCC without your prior written consent. If your partner is eligible and you have not said this, you have given it an option it can exercise against you later.

The Saudi franchise law, and the words that keep you outside it

Saudi Arabia is the only GCC state with a franchise statute. The Franchise Law was promulgated by Royal Decree No. M/22 dated 9/2/1441H, corresponding to 8 October 2019, runs to 27 articles, and under Article 27 entered into force "180 days following its publication in the Official Gazette". Its Implementing Regulations were approved by Minister of Commerce Decision No. (00591) dated 18/09/1441H, a number worth getting right because several published notes give 00594; the Umm Al-Qura text of the 2023 amending decision recites 00591. If this applies to your partner agreement, you acquire a set of obligations no software vendor has priced.

It probably does not apply, and the reason is a single word in Arabic. Article 4 lists what "shall not be deemed a franchise agreement", and limb 3 is "An agreement or contract limited to the sale of goods or provision of services carrying certain trademarks, or to the use of a trademark or any copyrighted material of any good or service." The Arabic is wider than the official English in three places. It says the purchase and sale of goods, where the English says only sale. It says any other intellectual property rights, where the English says copyrighted material. And in the Arabic the trademark qualifier attaches only to the services limb, so the goods limb is a bare purchase and sale of goods with no requirement that the goods carry a trademark at all, where the official English collapses the two into "the sale of goods or provision of services carrying certain trademarks". A reseller that buys licences at a discount, resells them under your product name, uses your marks to do it and runs its own business as it pleases sits inside that exclusion. Note also limb 2: an agreement subject to the Commercial Agencies Law is not a franchise, so in Saudi Arabia the two regimes do not overlap.

The load-bearing word is the Arabic al-maqsura ala, which means confined to, or limited to. The exclusion holds only while the contract does nothing beyond resale and brand use. And the standard European partner programme does a great deal more than that.

Look at what the Law thinks a franchise is. Article 1(5) defines it as "A right granted by a franchisor to a franchisee to run a franchise business on his own account under the trademark or under the brand name of the franchisor or the person licensed to use the same; this shall include transferring technical expertise and specifying the manner of operation. Such right may be granted for a financial or non-financial consideration, excluding the amounts the franchisee pays to the franchisor in return for goods or services." Article 1(9) then defines the Franchise Business Model as "The manner of operating a franchise business as determined by the franchisor and by which the franchisee shall be bound, including the display of the business trademark."

Two traps in that definition. The consideration may be non-financial, so a vendor reasoning "we charge no franchise fee, therefore we are safe" is looking at the wrong element; the only money the definition carves out is what the partner pays you for goods or services, which means your licence price. And the element doing the real work is control over the manner of operation.

Now read the Law's own picture of the relationship. These two articles are default terms, each opening "Unless otherwise agreed in writing", but they show what the drafter had in mind. Article 8 has the franchisor "specify the franchise business model in detail, including the criteria and instructions the franchisee must follow in order to operate and manage the franchised business, as well as provide the franchisee with operation manuals", and "train the franchisee's personnel". Article 9 has the franchisee "obtain the franchisor's approval prior to any change in the goods, services, or manner of operating the franchised business", provide "financial and accounting data", and "enable the franchisor or his representatives to inspect the facilities used for operating the franchised business, provided that such inspection does not result in disruption or harm to the business". Set that beside a modern partner programme with a mandatory certification track, a prescribed sales methodology, an approved discount grid, obligatory pipeline reporting, brand guidelines applied to the partner's own site, audit rights over its books, and an onboarding or territory fee that is not the price of a licence. The resemblance is the problem. Each of those takes the contract further from being confined to resale and brand use.

If it does apply, here is the bill. Article 7(1) requires the disclosure document to be given "at least 14 days prior to concluding the franchise agreement or from the date of any payment made by the franchisee in relation to the franchise, whichever occurs first", and Article 7(2) requires it in Arabic or with a certified Arabic translation. Article 6 requires the agreement and the disclosure document to be registered with the Ministry, and Article 3(1) of the Implementing Regulations puts the filing duty on the franchisor within 90 days of signature, which means on you and not on your partner; Article 5 of the same Regulations then requires the franchisor to apply to cancel the registration within 90 days of the agreement ending, which is a liability that outlives the relationship. Article 23 makes any agreement by which the franchisee "waives or relinquishes any of the rights he is entitled to under this Law" null and void, "unless such agreement is part of a final settlement with the franchisor or is authorized under this Law", so a negotiated exit settlement survives and a waiver buried in the agreement does not. Article 24(1) caps the fine at "five-hundred thousand riyals", which is the least of it.

Then Article 5(1), which is the one most often misdescribed: "A franchise shall not be offered nor granted until the franchised business, as per the franchise business model, has been practiced for a period not less than one year in at least two different points of sale or by at least two persons, one of whom may be the franchisor or any of his associates." Note what that does and does not require. There is no territorial limit in Article 5(1): a year of operation in two points of sale anywhere will do, and the franchisor need not be one of the two persons. The in-Kingdom version of the requirement is Article 5(2), and it binds only a master franchisee wanting to sub-franchise where the franchisor does not itself practise the franchised business in the Kingdom. So a European vendor with an established product is not blocked by Article 5(1). A vendor appointing a master partner who will on-appoint sub-partners is.

Two more points that close the obvious escape routes. Article 3 in the official English says "This Law shall apply to any franchise agreement executed in the Kingdom", which an English lawyer reads as signed in the Kingdom. The Arabic verb is tunaffadh, which means carried out or performed, and the preposition is dakhil, inside. The scope is performance inside Saudi Arabia, not place of signature, and signing in Warsaw does not help; Hammad and Al-Mehdar, writing in the Legal 500 Saudi franchise guide, read Article 3 the same way and add that a foreign governing law cannot displace the Law's core requirements. And Bird and Bird report a 2023 decision of the Eleventh Commercial Chamber of the Commercial Court in Dammam declaring a franchise agreement void because the franchisor had granted rights in a trademark it did not own at the time of contracting, with payments recoverable; the franchisor had not registered the mark with the Saudi Authority for Intellectual Property, and Bird and Bird note it is a first instance decision and that they do not know whether it was appealed. For a European software vendor that has never filed its mark in Saudi Arabia, that is a nullity argument handed to the partner for free.

The recommendation is therefore simple and specific: in Saudi Arabia, keep the document thin. Licences, marks, resale, territory, targets, termination, and nothing that reads as you running the partner's business.

Exclusivity: one state has no safe harbour

Most of what European vendors worry about in GCC competition law is not a real constraint on a small company. Saudi Arabia confines its per se prohibition on market division to competing or potentially competing firms, which pricing software for GCC buyers sources to Article 8(2) of the Implementing Regulations, so a vendor and its reseller are outside that limb, though the General Authority for Competition's guideline on vertical and horizontal agreements signals closer scrutiny of territorial and online-sales restrictions. Qatar puts vertical territorial restrictions inside its abuse of dominance article, where they only reach a dominant firm. And no GCC statute we read names sales targets or minimum purchase obligations, though the UAE's Article 5(1)(b), which reaches agreements "Determining the conditions of sale, purchase or service performance and the like", is wide enough to catch them where the competition-distortion element is made out. Resale price maintenance is a different story and is covered in pricing software for GCC buyers.

Qatar is worth quoting because it is the only Gulf statute that names the clause in question. Article 4(5) of Law No. 19 of 2006 makes it an abuse, for persons who "exercise control or domination", to impose "the obligation to limit the distribution or sale of a product or service, on the basis of geographical areas, distribution centres, clients, seasons or periods of time, among persons with a vertical relationship." The drafters saw exactly the clause a vendor writes, and put it behind a dominance gateway. The Ministry of Justice record for that Law shows Article 4 unamended and in force, so this is the current position rather than the 2006 original.

The UAE did not. Article 5(2) of Federal Decree-Law No. 36 of 2023 Regulating Competition prohibits "agreements between undertakings that would distort, lessen, restrict or prevent competition, particularly agreements that are intended to: a. Share markets or segment customers on the basis of geographical areas, distribution centers, type of customers or seasons and periods, or on any other basis that negatively affects competition ...". "Undertaking" is defined as "Any person that engages in an economic activity", and there is no competitor requirement and no dominance condition anywhere in the article; dominance is Article 6 and economic dependence is Article 7. Distribution centres and type of customers is distribution contract language, not cartel language.

And there is no de minimis, a point pricing software for GCC buyers reached from the other direction. The words "market share" and "threshold" do not appear in the Decree-Law at all. Cabinet Decision No. 3 of 2025 supplies numbers only for the dominance presumption and for merger notification, tied to Articles 6 and 12. So there is no market share floor beneath which a UAE exclusive territory clause is safe by operation of the statute.

That reading is not ours alone. The Ministry has twice used the Article 11 block-exemption power to lift Article 5 for conduct nobody would call a cartel. Ministerial Decision No. 32 of 2026, issued 11 February 2026, exempts exclusive dealing between food delivery platforms and restaurants, which is a plainly vertical relationship, though it exempts from Articles 5, 6 and 7 together rather than Article 5 alone: "Pursuant to Article (11) of the Decree-Law, agreements and contracts containing exclusive dealing conditions between Undertakings operating digital platforms and restaurants shall be exempted from the provisions of Articles (5), (6), and (7) of the Decree-Law". Its conditions are instructive: the exclusivity may not exceed twelve months, it may cover no more than 10 per cent of the merchants listed on the platform, and the exemption itself lasts twelve months and "may not be renewed except by a new Ministerial Decision". Then Ministerial Decision No. 96 of 2026, issued 16 April 2026, exempted supply-continuity coordination in essential goods "from the application of paragraphs (b) and (d) of Clause (1) and paragraph (a) of Clause (2) of Article (5) of the Decree-Law", which is the market and customer allocation limb itself, although that one is horizontal rather than vertical and ran for only two months. A software vendor gets nothing from either, because each is confined by its own scope article. What a software vendor inherits is the premise.

One escape route exists and it is the first line of Article 5(2): the prohibition applies "Subject to the provisions of Federal-Decree Law No. (3) of 2022 Regulating Commercial Agencies, and any other replacement law". A registered commercial agency is dealt with by the agency statute instead, and that must be a real carve-out rather than mere deference, because Article 7(1) of the agency law expressly authorises what Article 5(2)(a) prohibits: a principal may appoint an agent per emirate "provided that the distribution of commodities and services subject to the Commercial Agency is exclusive to them within the territory of the agency". Note in passing that the competition law mis-cites the agency law, which is a Federal Law rather than a Federal Decree-Law, and the slip is systemic: the table annexed to Cabinet Decision No. 89 of 2023 makes the same error, and the title of Ministerial Decision No. 215 of 2023 cites Federal Decree-Law No. 50 of 2022, which is the Commercial Transactions Law. But the carve-out is only as wide as registration, which brings you back to the ownership gate above. An unregistered reseller agreement does not get it.

The second escape route, applying for an individual exemption, is a trap rather than a remedy, and this is the counterintuitive conclusion of the section. Article 9 lets undertakings notify agreements they can prove "necessary for promoting economic development, improving the undertakings' performance and competitiveness, developing production or distribution systems or brining certain benefits to the consumer", provided they do not impose "limitations or restrictions that go beyond what is necessary to achieve the objectives mentioned in Clause (1) of this Article". Then Article 10(1) sets the clock: the Minister decides "within (90) ninety days, and such period may be extended for another (45) forty-five days", and "Failure to issue a resolution by the Minister regarding the expiration of the said period shall be deemed as a rejection of such agreements or practices." Silence is refusal, not approval, which is the opposite of the UAE merger rule. Article 4 of the Executive Regulations, issued by Cabinet Decision No. 59 of 2026 and published in Arabic only, requires the applicant to attach a written undertaking not to carry out the agreement until the Minister's reasoned decision issues, and to file audited financial statements for the last three financial years and a written report on the economic dimensions of the application including a study of the relevant market. The fee is AED 5,000 under Cabinet Decision No. 105 of 2026. And the 135 days runs from the date the Ministry receives a complete notice, behind a formal completeness examination the Regulations give ten working days. So notifying a routine channel agreement buys you a standstill of something over four months with refusal as the default outcome.

Two numbers for scale, and then the practical point. Article 24(1) sets the fine for breaching Article 5 at not less than AED 100,000 and not more than 10 per cent of annual sales in the UAE; Article 24(2) provides that where those sales cannot be computed, the fine runs from AED 500,000 to AED 5,000,000, which for a small vendor with no UAE turnover is worse rather than better. Article 3 applies the Decree-Law to economic activities outside the UAE affecting competition in the UAE, and expressly to "the exploitation of intellectual property rights inside and outside the State", so signing in Europe changes nothing.

We found no enforcement action anywhere in the GCC against a small vendor's channel exclusivity, and it would be scaremongering to imply otherwise. The sensible conclusion is narrow: do not notify, and draft as if Article 9's proportionality test were the standard. Grant exclusivity for a defined and renewable term against real commitments, rather than in perpetuity; restrict active selling outside the territory rather than banning passive sales to customers who approach the partner; and write down why each restriction was commercially necessary at the time you agreed it. That file note is the only thing that will help you later.

Getting out, and the exit clause the statutes themselves recommend

If your partner is not a registered agent, termination is a contract question and a civil code question, and nothing more. If it is registered, the five states diverge sharply, and the ranking is not the one in general circulation.

Qatar is the hardest. Article 8(c) of Law No. 8 of 2002 gives a fixed-term agent a compensation claim where the principal refuses to renew, if the agent's activity produced evident success in promoting the products or increasing customers, and the Arabic adds, in our translation, "notwithstanding any agreement to the contrary". You cannot contract out of it. And for an agency of indefinite duration, Article 9(a) provides that the contract "may not be terminated except by agreement of the two parties", and where one party wants out against the other's objection, "that must be by a judgment or a decision of the body empowered to determine any dispute arising out of the agency contract." There is no clean unilateral exit. Article 9(b) does not void a unilateral termination, it gives the other party a damages claim for the harm the termination caused, and Article 9(c) adds a further compensation claim that applies notwithstanding any agreement to the contrary where the agent's activity produced evident success. Article 17 then supplies the enforcement: where the principal rescinds the agency or refuses to renew it without legal justification the competent department may ban imports of the agency products, and the Minister may do the same where the principal terminated an indefinite-term agency in breach of Article 9(a). So the exit exists, but it is priced in damages and policed at the border. Never let a Qatari agency run open-ended.

Bahrain is next, and it is not the liberal jurisdiction it is often said to be. Article 8(b) of Legislative Decree No. 10 of 1992 provides that where either party wishes to terminate before the fixed term expires, "the agency shall not be cancelled or registered in the name of another trader except with the mutual consent of the two parties." Article 8(d) gives the agent a compensation claim on expiry "in spite of any agreement to the contrary" where its activity produced obvious success and the principal's refusal to renew prevented it from profiting, and Article 9(b) carries equivalent non-waiver wording for indefinite-term agencies, where the ministerial committee may strike off the registration if one party seeks termination "in spite of the opposition of the other party" and "An aggrieved party may claim compensation for the damages suffered." So Bahrain, unlike Qatar, does have a unilateral route out of an open-ended agency. There is no Bahraini Law No. 24 of 2007 liberalising any of this, whatever you may read: the Legislation and Legal Opinion Commission's own amendments index for the Law returns two records, Legislative Decree No. 8 of 1998 and Legislative Decree No. 49 of 2002, and the second of those repealed only Article 7, the agent's five per cent commission on parallel imports, which Legislative Decree No. 8 of 1998 had itself inserted.

Oman is the genuinely principal-friendly one, and it got there mostly by deletion. Royal Decree No. 34/2014, published in Official Gazette 1064 of 20 July 2014, replaced Article 14 with a power for the Council of Ministers, where there is domination over specified kinds of goods and services that adversely affects supply and demand and drives unjustified price rises, to fix the number and types of agencies permitted to each agent on the recommendation of the competition and anti-monopoly authorities. Then its annexed amendments provide, in our translation, that "the texts of Articles Nos. 5 (second paragraph), 7 and 10 of the aforementioned Commercial Agencies Law are repealed." Article 10 was the statutory list of compensable wrongs, framed expressly as instances of abuse of right requiring appropriate compensation "by way of example and not limitation", including a principal's refusal to renew after the agent had made an evident success of the products. Article 7, by then as replaced by Royal Decree No. 73/96 and supplemented by Royal Decree No. 66/2005, had barred the principal throughout the Sultanate rather than merely in the agency territory from selling its products other than through the agent, and entitled the agent to its profit or commission on any transaction concluded in breach. The second paragraph of Article 5, also as replaced in 1996, had let the Minister of Commerce and Industry prevent the import of the agency goods where the principal cancelled the agency unilaterally without acceptable excuse. What survives is Article 18, as replaced in 1996, which gives the body it names jurisdiction over all matters and disputes between principal and agent relating to the application of the agency contract and empowers it, in our translation, to "decide and determine the appropriate compensation, guided in that by commercial and local custom and the rules of justice and equity, unless the two parties agree to resort to arbitration." Oman deleted the grounds, not the remedy. No other Gulf state we could read has deleted its agency compensation right.

And one thing Oman did not delete should be in every vendor's calendar. Article 15, as replaced by Royal Decree No. 73/96, strikes off a registered agency on the principal's application at the end of its term only if the agent was notified of the principal's unwillingness to renew at the agreed time and in any event not less than three months before the term expires, "failing which the agency shall be deemed renewed for the same term agreed in the contract." Miss the three months and you have bought another full term by operation of statute.

Saudi Arabia is the quiet case: there is nothing to delete. The Commercial Agencies Law has no termination article and no agent's compensation article. It is a short instrument about nationality, a transition period, the register, penalties, fees, the extension to distributors, spare parts and maintenance, the implementing regulations and a ministry model contract, and the only place the word compensation appears is the limb of Article 4 preserving an injured person's ordinary claim. The absence is the finding. Saudi termination therefore runs on the contract and on the Civil Transactions Law, Royal Decree No. M/191 of 18 June 2023, where Article 29(2) makes the exercise of a right abusive where "the benefit of exercising the right is substantially disproportionate to the harm it causes to others" or where "the right is exercised unlawfully or for other than the intended purpose", and Article 95(1) requires performance "in a manner consistent with good faith practices".

That is about to change, and anyone drafting now should know it. On 27 October 2026 the Council of Ministers approved a new Commercial Transactions Law which, on the Ministry of Commerce's account as reported by Arab News, runs to 271 articles and "regulates commercial sales, supply contracts, brokerage and commercial agency agreements", replacing the Commercial Law, the Negotiable Instruments Law and the Commercial Books Law. It does not replace the Commercial Agencies Law, and it takes effect 180 days after publication in the Official Gazette, so it is not in force as at the date of this article and its agency chapter cannot yet be read. If your Saudi channel agreement will outlive the next six months, read it when it is gazetted.

The UAE sits in the middle and has an asymmetry nobody drafts around. Both notice limbs in Article 10 end with the words "unless the two parties agree otherwise", so the notice period is a default you can displace by contract rather than a statutory floor. It is also not simply a year: Article 10(1)(a) requires "not less than one year prior to the date set for termination or prior to the lapse of one half of the contract term, whichever is less", and Article 10(3) mirrors that for non-renewal, so on a contract shorter than two years the default is less than a year. Article 11(1), the agent's compensation claim when a contract expires at the end of its term, applies "unless there is an express agreement to otherwise", so it is waivable. Article 11(2), the compensation claim where the contract is terminated under its own terms, carries no such carve-out, and Article 5(1) provides that the Law applies to the agency contract and "any agreement to the contrary shall not be valid". So in the UAE you can contract out of the expiry claim and not out of the termination claim, which is an argument for letting a term run out rather than exercising a break. One timing point while we are here: Article 30 shielded agencies in force when the Law was issued from the new expiry and termination grounds, for two years from entry into force in the ordinary case and ten years where the agency had been registered to the same agent for more than ten years or the agent's investment exceeds AED 100,000,000. The Law entered into force on 15 June 2023, so the ordinary shield expired on 15 June 2025 and the long one runs to 15 June 2033. The investment limb is not self-executing: Ministerial Decision No. 215 of 2023 requires the agent to apply to the Ministry, which appoints an assessor, with the agent bearing the cost, so a principal facing that assertion should ask whether the agent ever went through it.

Then the exit clause. Every one of these statutes that has a committee or a court route also preserves arbitration, and they say so in terms. UAE Article 26(1): "The provisions of this Law do not prejudice any agreement between the Agent and the Principal to refer any dispute that may arise between them to arbitration." Article 26(2) makes a UAE seat the default "unless the parties agree otherwise", so a foreign seat is available by agreement. And Article 26(3) is remarkable: if either party goes to arbitration after the Committee has decided, within the challenge window, the Committee's decision "shall neither have any effect nor give rise to any consequences." Qatar's Article 23 gives its courts jurisdiction "unless there is an agreement to the contrary", and Article 24 makes an arbitral award in an agency dispute final. Bahrain's Article 30 says the same, and Article 3(h) of its Law makes the arbitration clause a required content of the agency contract. Oman's Article 18 gives its committee jurisdiction "unless the two parties agree to resort to arbitration", so an Omani arbitration clause displaces it. Enforcement of what you win is a separate subject, treated in what happens if a Gulf customer does not pay.

One caveat that belongs here rather than in a footnote. Even with no registered agency, the civil codes still reach you. The UAE's new Civil Transactions Law, Federal Decree-Law No. 25 of 2025, in force from 1 June 2026, carries abuse of right at Article 106 and good faith in performance, and adds something new at Article 121: a duty of good faith in the initiation, conduct and breaking off of pre-contractual negotiations, with compensation limited to actual loss and excluding the benefits expected from the contract unless the parties agree otherwise. A vendor that strings a reseller along on a renewal it has already decided against now has a named provision to worry about. The realistic claim against you is not a statutory goodwill indemnity. It is inadequate notice, bad-faith negotiation, or termination timed to strip the partner of a pipeline it built, bounded by proven loss.

How to check a partner before you sign

The free, anonymous, non-resident-accessible check that actually works is the Saudi award record described in the first section. Give it a candidate's name and it returns every public tender that firm bid on, the exact riyal value of its offer, whether its technical offer was ruled compliant or non-compliant, and what it won. Across our 3,061 bid rows, 1,954 were marked compliant and 1,107 non-compliant, so a candidate with a thin compliant record is visible. That is a harder test of delivery capability than any certificate, and it costs nothing. The method is set out in pricing software for GCC buyers.

For the UAE there is one check worth paying for, and it answers a question most vendors never think to ask. The Ministry of Economy and Tourism runs an "Enquire About Commercial Agency" service whose published procedure begins "Choose search type (Principal name or trade name).", at a fee of AED 150, with a further AED 150 for a register extract. Searching by principal name means you can ask the register whether your own brand is already recorded as somebody's commercial agency in the UAE. If a previous distributor, or an enthusiastic prospective one, has registered your products, you want to know before you sign with anybody else, not after. The live service runs behind the UAE's federal digital identity, and we could not confirm that a non-resident can authenticate to it, so plan to run it through UAE counsel or an agent.

Company-level verification in Saudi Arabia is harder than the advice usually suggests. The Wathq commercial register is an interface that rejects unauthenticated calls and issues credentials to entities registered in the Kingdom, and Etimad's own supplier lookup by commercial registration number returns an authentication error to anonymous callers. So "just check the public register" is not usable guidance for a European vendor in Saudi Arabia. The award history is.

What this means in practice

Start from the finding, not the fear. In Saudi public software procurement the contract is held by an intermediary essentially always, and in 409 licence and subscription tenders it was held by a software vendor's own entity zero times. So the real commercial question is not whether to use a partner. It is how to keep the customer relationship and the renewal when somebody else holds the paper, which is a matter of support terms, named end-user records, direct renewal rights and data access, and it should be in your agreement before anything about exclusivity is.

Then five specific things, in the order we would do them.

Put an eligibility representation and a no-registration covenant in every GCC channel agreement. It is two sentences, and it closes the only route by which the agency statutes reach you unexpectedly.

In Qatar, appoint two resellers for the same products rather than one, unless you have consciously decided you want the statute. If you must appoint a sole distributor, give it a fixed term and never let it run on indefinitely. In Oman, diarise the three-month non-renewal notice, because missing it renews the agency for a full further term by operation of statute.

In Saudi Arabia, keep the agreement confined to resale and brand use, and if you want a controlling partner programme, price the Franchise Law in first: a 14-day Arabic disclosure document before signature, a 90-day registration duty that falls on you, a second 90-day duty to deregister when it ends, a Saudi trademark registered before you sign, and the Article 5(1) requirement that the business has already been run for a year in two points of sale or by two persons before anyone can be offered the franchise. Register the trademark either way.

In the UAE, draft exclusivity as if proportionality mattered, and do not notify. Grant a defined term against real commitments, restrict active selling rather than banning passive sales, and keep a contemporaneous note of why each restriction was necessary.

Arbitrate. The UAE, Qatari, Bahraini and Omani statutes all preserve arbitration expressly, the UAE allows a foreign seat by agreement, an award in Qatar and Bahrain is final, and in Oman an arbitration agreement displaces the ministry committee. It is the one clause that buys you a predictable exit in all four.

If you are choosing a first Gulf market before you get to any of this, which GCC country should you enter first sets out the tax and localisation asymmetries that drive the answer. And if you want this done for a specific product and a specific country rather than in general, get in touch.

Sources

This article is general information about law, tax and licensing in the GCC, current as at 30 October 2026, and it is not legal advice. Commercial agency, franchise and competition rules differ by state and change, several of the instruments quoted here exist only in Arabic, and the Arabic governs. Take advice in the relevant jurisdiction before you sign or terminate a channel agreement.