Exclusive Distribution

Overview

  • In Kuwait, distributorship and agency relationships are primarily governed by Kuwait Decree-Law No. 68/1980 On the Promulgation of the Commercial Transactions Law and Kuwait Law No. 13/2016 On Commercial Agencies which replaced Kuwait Law No. 36/1964 On organising the Commercial Agencies.

  • Kuwait Law No. 13/2016 requires that the agent or distributor to be a Kuwaiti national or Kuwaiti-owned company with at least 51% Kuwaiti ownership.

  • The agency or distribution agreement must be registered with the Ministry of Commerce and Industry (MOCI) to be enforceable.

  • Kuwait Decree-Law No. 68/1980 and Kuwait Law No. 13/2016 allows for the appointment of multiple agents or distributors by a principal in Kuwait.

  • The goods or commodities imported must comply with international and gulf standards which are accepted in Kuwait.

  • It is prohibited for the principal to terminate the contract with the agent without a reasonable cause or breach by the agent, otherwise the principal will be liable to indemnify the agent due to the termination.