Terminating Distribution Agreements
Overview
To pursue commercial activities in Kuwait one must first adhere to Kuwait Law No. 13/2016 On Commercial Agencies. Therefore, non-Kuwaiti citizens must have a Kuwaiti partner with a minimum of 51% partnership, any foreign company wishing to set up a branch must have a Kuwaiti agent and only Kuwaiti citizens may act as a commercial agent in Kuwait, as per Kuwait Law No. 13/2016.
Companies wishing to import products, goods or services into Kuwait can only do so via a Kuwaiti commercial agent or distributor.
Terminating a distribution agreement is very much in the favour of the distributor or agent in Kuwait, whereby an adequate notice period is traditionally given and the agent should be suitably compensated for any expenses incurred through processes such as marketing and storage letting. There is possibility for arbitration in international distribution agreements.