Entering the Saudi and UAE markets: options for companies

In short

Agent or distributor: the quickest way to start, but in both countries the counterparty generally has to be local and the contract must be drafted carefully, especially on exclusivity and exit.
Local partner or joint venture: combines the partner’s market knowledge with the Italian company’s product, but requires clear rules on governance and disagreements.
Branch or company: gives full control. In Saudi Arabia and the UAE 100% foreign ownership is now permitted in most sectors.
Working with Saudi government entities may require a regional headquarters in the Kingdom.

The options

1. Local agent or distributor

An agent promotes products and finds customers; a distributor buys and resells on its own account. This option requires the lowest initial investment.

Saudi Arabia: under the current rules, only Saudi nationals or wholly Saudi-owned companies may act as agents or distributors, and the contract must be entered in the Commercial Agencies Register of the Ministry of Commerce. The law provides no automatic termination indemnity, but termination follows the contract and general principles, and deregistration may require the cooperation of the outgoing distributor. A reform of the commercial agencies law is under discussion.
United Arab Emirates: the Commercial Agencies Law (Federal Decree-Law No. 3 of 2022, in force since 15 June 2023) applies to registered exclusive agencies; the agent is generally a UAE national or UAE-owned company. The law regulates termination, with a minimum notice period, and allows the parties to choose arbitration.

In both cases the contract should define territory, exclusivity, targets, term, grounds for termination and what happens at the end of the relationship: stock, trademarks, deregistration.

2. Local partner or joint venture

A joint company with a local partner gives access to the partner’s network and market knowledge. Before signing, the company needs due diligence on the partner (financial strength, reputation, conflicts of interest) and an agreement covering contributions, management, profit distribution, deadlock and exit.

3. Branch or own company

A direct presence gives control over customers, prices and brand. In Saudi Arabia foreign investment goes through the Ministry of Investment (MISA), and the new Investment Law, in force since 2025, replaced the former licence with a registration. In the UAE the Commercial Companies Law now allows full foreign ownership on the mainland for most activities, while free zones offer their own regimes. Details: Saudi Arabia · UAE.

4. Contracts with Saudi government entities

Since 1 January 2024, multinational companies wishing to contract with Saudi government entities must, as a rule, have a regional headquarters (RHQ) in the Kingdom. Companies targeting major public projects should plan their structure from the outset.

How to choose

To test the market: a distributor or agent, with a limited-term contract and a clear exit.
For an established market: a direct presence, possibly alongside the existing distributor.
For public-sector projects: assess from the start the structure required for tenders.
To serve the whole Gulf: a UAE base is often combined with a presence in Saudi Arabia.

Our role

The firm assists Italian companies in choosing how to enter the market and in drafting and negotiating contracts with agents, distributors and partners, with attention to governing law, arbitration, payments and guarantees. Incorporations, licences and registrations are handled by local professionals whom we coordinate from Italy: the company has a single point of contact.

Rules in the Gulf change frequently: the information on this page is general and up to date as of the date shown. Each project must be checked against the law in force at the time, with local professionals.

Frequently asked questions

Can an Italian company own 100% of a company in Saudi Arabia?

In most sectors, yes: foreign investment goes through the Ministry of Investment (MISA), with the registration required by the Investment Law in force since 2025. Some activities remain excluded or subject to conditions and must be checked sector by sector.

Is a 51% UAE partner still required?

For most mainland activities, no longer: the Commercial Companies Law allows full foreign ownership, except for certain restricted or strategic-impact sectors. In free zones full foreign ownership is the rule.

Can I appoint a non-Saudi company as my distributor in Saudi Arabia?

Under the current rules the registered agent or distributor must be a Saudi national or a wholly Saudi-owned company. Note that a reform is under discussion.

If the distributor does not perform, can I replace it?

Yes, but timing and cost depend mainly on the contract: term, notice, termination grounds, post-termination obligations. In Saudi Arabia deregistration may require the cooperation of the outgoing distributor; in the UAE the law sets rules on termination of registered agencies. That is why the contract should be drafted with the end of the relationship in mind.

Can disputes be settled by arbitration?

Often yes, and this should be considered in the contract, choosing seat, rules and language. In the UAE the 2022 Commercial Agencies Law expressly allows arbitration.

Does the firm operate directly in Saudi Arabia and the UAE?

The firm assists the company from Italy and coordinates local professionals for on-site formalities such as incorporations, licences and registrations: the company has a single point of contact in Italy.

Sources

UAE Government portal, Full foreign ownership of commercial companies
Saudi Ministry of Investment (MISA), misa.gov.sa
Saudi Ministry of Commerce, mc.gov.sa
UAE federal legislation, uaelegislation.gov.ae

Let’s talk about your project
Avv. Pier Giorgio Ometto. The first contact can take place by phone, by video call or, at your request, at your premises.

+39 338 220 2203
also WhatsApp · email · office +39 041 8949727

Entering the Saudi and UAE markets: the options available