Foreign investors who don’t want to establish an entity but wish to trade in KSA, can appoint a commercial agent who will be responsible for the distribution of their product within the defined jurisdiction. The primary legislation that governs agency arrangements in KSA is the Royal Decree No. M/11 dated 20/2/1382H and its implementing regulations. This regulation is extremely wide and captures all forms of agreements for sale through third parties.
These regulations have established a comprehensive framework that governs the relationship between the KSA Agent and foreign principal. Pursuant to this regulatory framework, a number of requirements must be satisfied, including that a commercial agent must be either a KSA National or a company that is wholly owned by one or more KSA Nationals, and that the commercial agency agreement need be registered with the Commercial Agencies Department at the Ministry of Commerce and Industry.
The definition of a commercial agent under the Law is wide and covers agents, distributors and franchisees. The Regulations apply to anyone who contracts with a manufacturer or his representative in his country for commercial activities, whether as agent or distributor in any form of agency or distribution for profit, commission or facilities of any nature, including agencies for maritime transport, air, or land and any other agencies that would be decided by the Minister of Commerce and Industry.
GCC Solutions can offer a wholly owned KSA entity that can assist foreign companies that wish to enter into the KSA market by providing a solution whereby we act as your on-the-ground partner through an agency agreement by acting as the commercial agent which allows them to operate and transact goods and services in the Kingdom without the need to set up an entity of their own. We can provide local representation and assist with the registration of your products and provide administrative support.
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