OEM Supply Agreement (UAE)

An OEM Supply Agreement in the United Arab Emirates is a contract under which a manufacturer — the OEM supplier — produces goods to a brand owner's specification and delivers them labelled with the brand owner's trade mark and packaging, so that the finished goods reach the market as the brand owner's product. The arrangement is governed by the UAE Civil Code (Federal Law No. 5 of 1985) as the general law of contract, the Commercial Transactions Law (Federal Decree-Law No. 50 of 2022) for commercial dealings between merchants, and the Industrial Property Law (Federal Law No. 11 of 2021) for the intellectual property rights that define the OEM relationship.

OEM — Original Equipment Manufacturer — describes the manufacturing model in which the producing party makes products to another party's design and the goods are marketed under the buyer's brand. The OEM supplier's identity is typically not disclosed to end consumers. The model is common across Dubai's Jebel Ali Free Zone (JAFZA), Hamriyah Free Zone in Sharjah, Khalifa Industrial Zone Abu Dhabi (KIZAD), and Dubai Industrial City, where manufacturers produce private-label goods for regional and international brand owners in electronics, consumer goods, food and beverage, and industrial equipment.

Article 125 of the UAE Civil Code confirms that a contract forms when offer and acceptance meet on the essential terms. Article 257 makes the contract the law of the parties, and Articles 282 and 389 provide remedies for non-conforming performance. The OEM agreement fixes the specification to which conformity is measured. Because the brand owner's reputation depends on goods it does not manufacture, quality control is the centrepiece of the agreement: pre-production samples, in-process inspections, pre-shipment certificates of conformity, and audit rights are all standard provisions.

Intellectual property allocation is the other defining feature. Trade marks are governed by the Trademarks Law (Federal Decree-Law No. 36 of 2021), and product designs by the Industrial Property Law (Federal Law No. 11 of 2021), both administered by the Ministry of Economy. The OEM agreement grants the supplier a limited licence to use the brand owner's marks and designs solely for manufacturing the agreed products, and expressly vests any improvements in the brand owner. Confidentiality obligations prevent the supplier from misusing the brand owner's technical specifications for competing products.

Value Added Tax at 5% under the VAT Law (Federal Decree-Law No. 8 of 2017) applies to the supply, administered by the Federal Tax Authority (FTA), and the OEM supplier must issue compliant tax invoices. Regulated products must obtain the relevant ESMA conformity mark under the national standardisation framework before market entry. Electronic execution is valid under the Electronic Transactions and Trust Services Law (Federal Decree-Law No. 46 of 2021). Disputes are resolved before the Dubai Courts, the Abu Dhabi Judicial Department, the DIFC Courts, or the ADGM Courts, or by arbitration under the Federal Arbitration Law (Federal Law No. 6 of 2018).

An OEM Supply Agreement in the United Arab Emirates is needed whenever a brand owner commissions a third-party manufacturer to produce goods bearing the brand owner's trade mark and packaging. The agreement protects both the brand owner's intellectual property and the manufacturer's commercial interests before a single unit is produced.

Consumer electronics brand owners that source manufactured products from UAE or GCC manufacturers for sale under their own label in the UAE and regional markets need an OEM agreement to licence their trade marks, fix product specifications, control quality, and prevent the manufacturer from selling branded goods to competitors.

Food and beverage companies that commission private-label manufacturing — nutritional supplements, packaged foods, beverages — under the Food Safety Law (Federal Law No. 10 of 2015) and ESMA regulations need an OEM agreement that specifies hygiene standards, batch traceability, and labelling requirements, and allocates recall liability between the brand and the contract manufacturer.

Industrial equipment and tool brands sourcing from Dubai Industrial City or Hamriyah Free Zone manufacturers use OEM agreements to protect proprietary designs under the Industrial Property Law (Federal Law No. 11 of 2021) while commissioning cost-competitive production.

Cosmetics and personal care brands regulated under UAE Ministry of Health and Prevention (MOHAP) and ESMA cosmetics regulations need OEM agreements that impose GMP compliance, ingredient specifications, and stability testing obligations on the contract manufacturer.

In every case, the OEM agreement is the instrument that converts a manufacturing relationship into a managed intellectual-property and quality-assurance framework, preventing the OEM supplier from using the brand owner's confidential specifications for competing products and giving the brand owner clear remedies under the UAE Civil Code (Federal Law No. 5 of 1985) and Commercial Transactions Law (Federal Decree-Law No. 50 of 2022) if quality or delivery falls short.

A UAE OEM Supply Agreement compliant with the UAE Civil Code (Federal Law No. 5 of 1985), the Commercial Transactions Law (Federal Decree-Law No. 50 of 2022), and the Industrial Property Law (Federal Law No. 11 of 2021) must contain the following key elements. The forms-legal.com UAE OEM supply agreement template addresses each component.

Party identification must record the full legal name of the OEM supplier and the brand owner, the trade licence number issued by the relevant Department of Economic Development or free-zone registrar, and the registered address of each. The signatory for each side must have authority to bind the entity under the Commercial Companies Law (Federal Decree-Law No. 32 of 2021).

Product specification must define precisely what will be manufactured — dimensions, materials, tolerances, performance criteria — by reference to a technical schedule. ESMA conformity requirements, ISO certifications, and sector-specific standards from MOHAP, DHA, or Dubai Municipality must be stated.

Branding and labelling instructions must specify which trade marks, logos, and packaging will be applied, reference a brand guidelines document, and prohibit any OEM supplier branding on finished products.

Intellectual property clause must record that trade marks, designs, and specifications remain the brand owner's property; grant the supplier a limited licence for manufacturing purposes only; vest improvements automatically in the brand owner; and prohibit the supplier from misusing the brand owner's IP, consistent with the Trademarks Law (Federal Decree-Law No. 36 of 2021) and the Industrial Property Law (Federal Law No. 11 of 2021).

Quality control must require pre-production samples, in-process inspections, certificates of conformity, and audit rights for the brand owner. Defect notification periods and remedies under Articles 282 and 389 of the Civil Code must be stated.

Pricing and payment must state the price in AED, VAT treatment under Federal Decree-Law No. 8 of 2017, payment terms, and require compliant FTA tax invoices. Retention of title until full payment protects the supplier.

Confidentiality must bind the supplier to strict confidence over all specifications and technical data, surviving termination for five years. The Personal Data Protection Law (Federal Decree-Law No. 45 of 2021) applies where personal data is processed.

Term and termination must provide for notice-based termination and material-breach termination under Article 272, with obligations on the supplier to return all brand owner materials and tooling on exit.

Completing an OEM Supply Agreement for the United Arab Emirates requires the product specifications, brand guidelines, trade licence details, and agreed pricing to be to hand. Work through the template section by section.

Start with the parties. Enter the full legal name of the OEM supplier and the brand owner exactly as shown on each trade licence. Record the trade licence number — issued by the relevant Department of Economic Development or free-zone registrar — and the registered address of each party. The signatory must be authorised to bind the entity under the Commercial Companies Law (Federal Decree-Law No. 32 of 2021).

Enter the agreement date in DD/MM/YYYY format.

Describe the products to be manufactured under the OEM arrangement with precision, referencing a schedule for full technical specifications. State the trade marks, logos, and packaging that will be applied to the finished products by reference to the brand guidelines in a schedule. Record the minimum order quantity per SKU.

Complete the pricing and payment terms in AED. State whether prices are exclusive of VAT under the VAT Law (Federal Decree-Law No. 8 of 2017), the payment period, and any LC or advance-payment requirements for overseas OEM shipments through Jebel Ali Port or Abu Dhabi Ports.

Set the production and delivery lead time from purchase order confirmation, the start date, and the term of the agreement.

Select the governing court: Dubai Courts or Abu Dhabi Courts for onshore entities, or DIFC Courts or ADGM Courts for free-zone parties.

Arrange signature by an authorised representative of each party. Electronic signatures are valid under the Electronic Transactions and Trust Services Law (Federal Decree-Law No. 46 of 2021). Attach the specification schedule and brand guidelines as referenced schedules. Download as PDF or Word and retain a signed copy with each party.

An OEM Supply Agreement in the United Arab Emirates is governed by the UAE Civil Code (Federal Law No. 5 of 1985), the Commercial Transactions Law (Federal Decree-Law No. 50 of 2022), the Industrial Property Law (Federal Law No. 11 of 2021), and the Trademarks Law (Federal Decree-Law No. 36 of 2021). The Civil Code under Article 125 governs contract formation and Article 257 its binding effect; Articles 282 and 389 provide the remedies framework for non-conformity; Article 272 governs rescission for material breach.

Both parties must hold valid trade licences covering their activities — the OEM supplier from the relevant Department of Economic Development or free-zone registrar, and the brand owner from its own licensing authority. Manufacturing activity in UAE free zones such as JAFZA, Hamriyah, and KIZAD requires a manufacturing licence from the free-zone authority.

Trade marks applied to OEM products must be registered or have a pending registration with the Ministry of Economy under the Trademarks Law (Federal Decree-Law No. 36 of 2021). Using an unregistered mark does not preclude an OEM arrangement but reduces the brand owner's enforcement options. Product designs may be registered as industrial designs under the Industrial Property Law (Federal Law No. 11 of 2021) for stronger protection.

Regulated products must obtain ESMA conformity marks under the national standardisation framework before being placed on the UAE market. For food products, the Food Safety Law (Federal Law No. 10 of 2015) and ADAFSA / Dubai Municipality regulations apply. For pharmaceuticals and medical devices, MOHAP registration is required.

Value Added Tax at 5% under Federal Decree-Law No. 8 of 2017, administered by the Federal Tax Authority (FTA), applies to the OEM supply. Compliant tax invoices must be issued. Personal data processed under the agreement is subject to Federal Decree-Law No. 45 of 2021. Electronic execution is valid under Federal Decree-Law No. 46 of 2021.

A UAE OEM Supply Agreement that is carelessly drafted can expose the brand owner to IP misappropriation or leave both parties in dispute before the Dubai Courts or Abu Dhabi Judicial Department. The following errors are the most common.

1. IP licence not limited to manufacturing. Granting the OEM supplier a general licence to the brand owner's trade marks, rather than a limited licence for manufacturing purposes only, risks the supplier using the marks for other products. The licence must be expressly limited to manufacturing the specified products under this agreement, consistent with the Trademarks Law (Federal Decree-Law No. 36 of 2021).

2. Improvements not assigned. Failing to include an assignment clause vesting all improvements in the brand owner means the OEM supplier may claim ownership of modifications under the general rule that the creator owns the IP. Include an explicit automatic assignment, consistent with the Industrial Property Law (Federal Law No. 11 of 2021).

3. No audit right. Relying on delivery inspection alone, without an audit right to inspect the production facility and review quality records, leaves the brand owner unable to verify that the OEM supplier is manufacturing to specification throughout the production run. Insert a facility audit right exercisable on reasonable notice.

4. ESMA compliance not allocated. Failing to specify which party is responsible for obtaining ESMA conformity marks and other product registrations can result in non-compliant goods entering the UAE market and exposure to regulatory enforcement by the Ministry of Economy and Ministry of Industry and Advanced Technology (MoIAT).

5. Branding applied without checking registration. Using a trade mark that is not registered with the Ministry of Economy under the Trademarks Law (Federal Decree-Law No. 36 of 2021) weakens enforcement against counterfeits and third-party infringers. Confirm registration before production begins.

6. No restriction on OEM supplier selling branded goods. Without an express prohibition, the OEM supplier may sell products bearing the brand owner's mark through its own channels. The prohibition must be explicit.

7. VAT treatment unstated. Disputes about whether the agreed price includes VAT under the VAT Law (Federal Decree-Law No. 8 of 2017) are avoidable. Express prices as exclusive of VAT and require FTA-compliant tax invoices.