Trade Name License Agreement Template for Saudi Arabia

A Trade Name License Agreement is a legal contract that grants permission to use a registered trade name in Saudi Arabia, governed by the Commercial Names Law and Ministry of Commerce regulations. You'll need this document when expanding your business through licensing arrangements, ensuring both parties understand their rights and obligations under Saudi law.

When do you need this document?

You require a Trade Name License Agreement when franchising your business to Saudi partners, licensing your brand to local distributors, or authorizing subsidiaries to operate under your trade name. This document is essential for international companies entering the Saudi market through local partners, businesses expanding operations across different regions within the Kingdom, or when establishing joint ventures that involve shared use of commercial identifiers. The agreement becomes critical when you need to maintain quality control over how your trade name is used while generating licensing revenue from your intellectual property rights.

Key legal considerations

Your agreement must clearly define the scope of permitted use, territorial limitations, and quality standards that the licensee must maintain. Include specific provisions for compliance with Saudi regulations, termination conditions, and dispute resolution mechanisms that align with Commercial Court Law procedures. Address intellectual property protection measures, including registration requirements with the Ministry of Commerce and Commercial Registration Office. Consider including clauses that address Sharia-compliant business practices, anti-fraud provisions under the Anti-Commercial Fraud Law, and clear fee structures that comply with Saudi tax regulations. The agreement should specify reporting requirements, audit rights, and enforcement mechanisms to protect your trade name from unauthorized use or dilution.

Legal requirements in Saudi Arabia

Under Saudi law, your Trade Name License Agreement must comply with the Commercial Names Law (Royal Decree No. M/15) and be registered with the appropriate authorities. The licensor must hold valid commercial registration and prove ownership of the trade name through proper documentation. Both parties need valid commercial registration numbers and must maintain compliance with ongoing regulatory requirements. The agreement requires notarization and may need translation into Arabic for official purposes. You must ensure the licensed trade name doesn't conflict with existing registrations and complies with naming restrictions under Saudi regulations. The document should address succession planning, as Saudi law has specific requirements for business continuity and inheritance matters that could affect the licensing arrangement.