Local Agent Agreement Template for Saudi Arabia

The Local Agent Agreement is essential for foreign companies seeking to conduct business in Saudi Arabia through a local representative. This document type is specifically required under Saudi Arabian law, which mandates that certain foreign businesses must operate through registered local agents. The agreement must comply with the Commercial Agencies Law (Royal Decree No. M/11 of 1962) and its implementing regulations, as well as other relevant Saudi legislation. It typically includes detailed provisions on the agent's scope of authority, territorial rights, commission structures, compliance requirements, and obligations of both parties. The document must be registered with the Ministry of Commerce and should be drafted to ensure compatibility with both Saudi commercial law and Sharia principles. It's particularly important as Saudi Arabia continues to attract foreign investment while maintaining specific requirements for foreign business operations within the kingdom.

1. Parties: Identification of the Principal (foreign company) and the Local Agent (Saudi entity), including full legal names, commercial registration numbers, and addresses

2. Background: Context of the agreement, including the Principal's business, the purpose of appointing a Local Agent, and any relevant history of the relationship

3. Definitions: Key terms used throughout the agreement, including Territory, Products/Services, Commission, and other specific terms

4. Appointment and Scope: Terms of appointment, exclusivity/non-exclusivity, and detailed scope of agent's authority

5. Territory and Products/Services: Specific geographical area of operation and detailed description of products/services covered

6. Agent's Duties and Obligations: Comprehensive list of agent's responsibilities, including marketing, sales, reporting, and compliance obligations

7. Principal's Duties and Obligations: Principal's commitments, including product supply, support, and training obligations

8. Commission Structure: Detailed commission calculations, payment terms, and currency specifications

9. Term and Termination: Duration of agreement, renewal terms, and grounds for termination

10. Compliance: Obligations to comply with Saudi laws, including Commercial Agencies Law and Anti-Commercial Concealment Law

11. Confidentiality: Protection of confidential information and trade secrets

12. Non-Competition and Non-Solicitation: Restrictions on competitive activities during and after the agreement

13. Governing Law and Dispute Resolution: Saudi law as governing law and dispute resolution mechanisms

14. General Provisions: Standard clauses including force majeure, notices, and amendments