Trademark Licensing in the UAE: Agreements, Recordal and Franchising

A trademark licence lets another business use your registered mark – a franchisee, distributor, manufacturer or group company – while you keep ownership. Under Federal Decree-Law No. 36 of 2021 the licence must be in writing, and it only binds third parties once it is recorded with the Ministry of Economy & Tourism (MoET).

What the law requires

• Written agreement. Oral or implied licences are not recognised.
• Registered mark. You can license a pending application, but recordal happens against the registration.
• Scope defined. The licence should state the mark(s), the classes and goods, the territory (all UAE or specific emirates/free zones), whether it is exclusive, sole or non-exclusive, and the term.
• Quality control. The owner must be able to control how the mark is used; a licence without quality control risks the mark becoming deceptive or being treated as abandoned.
• No notarisation requirement. The 2021 law removed the old requirement to notarise and legalise licence agreements, though MoET may ask for a certified translation into Arabic.

Why record the licence

Recording with MoET is what makes the licence effective against everyone else. Without it:

• the licensee cannot rely on the licence against infringers or in customs actions;
• use by the licensee may not count as use by the owner, exposing the mark to non-use cancellation after five years;
• a later buyer of the mark takes it free of the unrecorded licence.

Recordal is an online MoET service: upload the agreement (and Arabic translation if required), the licence is examined and entered on the register, and the entry is published in the Trademark Bulletin. Sublicences and amendments are recorded the same way, and the licence can be cancelled from the register when it ends.

Franchising

Franchising in the UAE is built on a trademark licence plus know-how and operating standards. There is no separate federal franchise law; the Commercial Agencies Law can apply if the arrangement is registered as an agency, which gives the franchisee strong protections – franchisors usually structure agreements to avoid that. Record the trademark licence for each franchisee or a master licence for the master franchisee. Foreign franchisors should register the mark in the UAE before signing, otherwise the franchisee may register it first.

Licensing between group companies

If the mark is held by a holding company and used by operating subsidiaries, record an intra-group licence. It secures use for non-use purposes and keeps the ownership structure clean for future assignment or sale.

Royalties and tax

Royalties paid to a foreign licensor are subject to UAE corporate tax rules and may be affected by transfer-pricing requirements when paid within a group. Take tax advice on royalty rates; the trademark recordal itself does not require the royalty to be disclosed.

Licence vs. assignment

	Licence	Assignment
Ownership	Stays with the licensor	Transfers to the assignee
Recorded with MoET	Yes	Yes – mandatory to be effective against third parties
Can be limited	By territory, goods, time, exclusivity	Can be partial (some classes)
Ends	On expiry or termination	Permanent

Assignment and change-of-owner recordal →

Frequently asked questions

Can I license a trademark that is not yet registered? You can sign the agreement, but recordal and enforcement need the registration. File first.

Does the licensee's use protect my mark from non-use cancellation? Yes, if the licence is recorded and the owner exercises quality control.

Must the licence be in Arabic? The agreement can be in English; MoET may require a certified Arabic translation for recordal.

Can I license only one class? Yes – the licence can cover any subset of the registered goods and services.

We draft and record trademark licences and franchise licences and handle the MoET filing end to end – contact us.