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.