How to find the right distributor in the UAE and Saudi Arabia

Start with the buyer, not the distributor

The right distributor is the one that already sells to the buyers you need. Before you look for partners, be clear about who buys your technology in the region: contractors, plant operators, municipalities, industrial companies or other distributors.

Then look for partners who meet those buyers every week, not partners with the longest brand list.

Where to find candidates

• Trade fairs in your sector, where distributors walk the halls looking for new lines.
• Your existing customers’ suppliers in the region. Ask who they buy from.
• Chambers of commerce and trade promotion organisations from your home country.
• Introductions from people who know the candidates personally. In Saudi Arabia in particular, the US Commercial Service advises against cold outreach, because buyers and partners prefer to meet after a proper introduction.

How to test a candidate

• Ask which of your target customers they sold to in the last year, and what.
• Ask who in their team would sell your product, and how much of their time it would get.
• Check which countries they actually cover. A Dubai office does not mean coverage in Saudi Arabia.
• Look at which competing brands they carry, and why they would add yours.
• Meet them in person, and meet a customer together.

UAE: the commercial agencies law

In the UAE, Federal Law No. 3 of 2022 on commercial agencies has applied since 15 June 2023. Registered commercial agents must as a rule be UAE nationals or companies wholly owned by UAE nationals. A registered agent can claim compensation when a fixed-term agreement is not renewed, if it can show that it contributed to your success in the territory.

Understand the difference between a registered agency and an unregistered distribution agreement before you sign, and take advice from a UAE lawyer.

Saudi Arabia: registration, commission and termination

In Saudi Arabia, agency and distribution agreements are registered with the Ministry of Commerce. According to the US Commercial Service, agent commissions typically range from 3 to 10 percent. Terminating an agent can be difficult, and agents commonly ask for parting compensation.

The Saudi agency regime has also been under reform since a draft law in 2022. Check the current rules with a Saudi lawyer before you sign.

Contract terms to settle before you sign

• Territory: which countries, and which customer groups.
• Exclusivity: whether it applies, and what sales targets keep it in place.
• Term, renewal and how either side can end the agreement.
• Compensation on termination or non-renewal.
• Who handles product registration, certification, service and spare parts.
• Pricing, payment terms and currency.
• Governing law and how disputes are resolved.

A shorter first term with clear targets is usually easier for both sides than a long exclusive agreement signed before anyone knows what the market will buy.