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Representation Agreement for Saudi Arabia

Representation Agreement Template for Saudi Arabia

A comprehensive legal document governed by Saudi Arabian law that establishes and regulates the relationship between a principal company and its appointed representative in Saudi Arabia. The agreement complies with the Saudi Commercial Agencies Law and related regulations, defining the scope of representation, territorial rights, commission structures, and obligations of both parties. It includes essential provisions for commercial registration, regulatory compliance, and Sharia-compliant business practices, while addressing specific requirements for foreign entities operating through local representatives in the Saudi market.

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What is a Representation Agreement?

The Representation Agreement is a crucial document for foreign companies seeking to establish or maintain a business presence in Saudi Arabia through local representation. This agreement type is specifically designed to comply with Saudi Arabia's Commercial Agencies Law and related regulations, which require foreign entities to work through registered local representatives for various business activities. The document outlines the appointment terms, scope of representation, territorial rights, compensation structure, and mutual obligations of both the principal and representative. It addresses key aspects such as regulatory compliance, commercial registration requirements, and Sharia-compliant business practices. The agreement is particularly important given Saudi Arabia's emphasis on local partnership and representation requirements, serving as a foundational document for business relationships in the Kingdom.

What sections should be included in a Representation Agreement?

1. Parties: Identification of the Principal and Representative, including full legal names, addresses, and commercial registration details

2. Background: Context of the representation arrangement and brief description of the parties' business activities

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

4. Appointment and Scope: Clear definition of the representation arrangement, territory, and exclusive/non-exclusive nature

5. Rights and Obligations of Representative: Detailed responsibilities, performance requirements, and compliance obligations

6. Rights and Obligations of Principal: Support, training, and other obligations of the principal company

7. Commission Structure: Detailed commission calculations, payment terms, and currency provisions

8. Term and Renewal: Duration of the agreement and renewal mechanisms

9. Termination: Grounds for termination, notice requirements, and consequences

10. Confidentiality: Protection of confidential information and trade secrets

11. Intellectual Property: Usage rights and protection of trademarks, patents, and other IP

12. Compliance with Laws: Obligations to comply with Saudi laws, including Commercial Agencies Law

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

14. General Provisions: Standard clauses including notices, amendments, and entire agreement

What sections are optional to include in a Representation Agreement?

1. Import/Export Provisions: Required if the representation involves cross-border trade of goods

2. Training and Support: Detailed section needed if extensive training or technical support is provided

3. Performance Targets: Include when specific sales or performance targets are part of the arrangement

4. Marketing and Promotion: Required if representative has specific marketing responsibilities

5. Non-Competition: Include when restricting representative from representing competing products

6. Insurance Requirements: Include when specific insurance coverage is required

7. Local Content Requirements: Include when dealing with government contracts or regulated sectors

8. Shariah Compliance Declaration: Required when explicitly needed for certain business sectors or regulatory compliance

What schedules should be included in a Representation Agreement?

1. Schedule 1 - Territory Definition: Detailed description of geographical territory covered

2. Schedule 2 - Products/Services: Comprehensive list of products or services covered by the agreement

3. Schedule 3 - Commission Structure: Detailed breakdown of commission rates and calculation methods

4. Schedule 4 - Performance Criteria: Specific metrics and targets for performance evaluation

5. Schedule 5 - Required Registrations: List of necessary regulatory registrations and licenses

6. Appendix A - Power of Attorney: If required, formal power of attorney document in Arabic

7. Appendix B - Training Program: Details of any required training programs

8. Appendix C - Marketing Guidelines: Guidelines for use of trademarks and marketing materials

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Saudi Arabia

Publisher

Ƶ

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions
































Clauses










































Relevant Industries

Manufacturing

Technology

Healthcare and Pharmaceuticals

Construction and Engineering

Automotive

Consumer Goods

Professional Services

Oil and Gas

Defense and Aviation

Telecommunications

Financial Services

Industrial Equipment

Retail and Distribution

Education and Training

Relevant Teams

Legal

Commercial

Business Development

Compliance

Operations

Sales

Corporate Affairs

International Business

Strategy

Regulatory Affairs

Relevant Roles

Chief Executive Officer

Managing Director

Commercial Director

Legal Counsel

Business Development Manager

Country Manager

Regional Director

Compliance Officer

Contract Manager

Sales Director

Operations Manager

Strategic Partnership Manager

General Manager

Corporate Secretary

Regulatory Affairs Manager

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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