When it comes to the provisions given regarding the appointment of a Local Service Agent / Partner, there has always been a little bit of confusion. Many investors believe that an Emirati is typically the one running the company. However, it is true that choosing a Local Service Agent is a requirement, but only when opening a business outside of a free zone. In fact, the organization of the business and the type of activity they select are the main factors influencing the confirmation of a local partner.
Local sponsorship is mandatory in Dubai for business formation, as per the Commercial Company’s Law and Civil Law of the United Arab Emirates.
Who is Local Service Agent?
Local service representatives in Dubai are primarily responsible for serving as a point of contact between their employer and governmental entities like the labour and immigration ministries.
An Emirati national who assists a sole proprietorship, a civil business, or a branch office in establishing their business activity is known as a local service agent in Dubai. They are acting in the capacity of a company representative. However, instead of receiving a profit share from the company or branch office, the local service agent works on agreed-upon annual fees, settled as a commercial contract for their services.
All arrangements and meetings with regulatory bodies and government representatives must be made on the company’s behalf by the Local Service Agent. He is free from responsibility for facilitating license renewals.
Benefits of Local Service Agents in Dubai
- Time saving, process acceleration, and kickback.
- Assistance with renewals, document clearance, and PRO services in Dubai.
- No commitment to fulfil any financial obligations.
- Finding the best and most knowledgeable local agent can be difficult.
- Sometimes the sponsorship fee includes covert concerns for additional expenses.
- Abruptly leaving without leaving a trail.
- Due to a lengthy absence, paperwork still needs signatures.
What does a Local Service Agent do?
- They do not interfere with how the company runs daily.
- They are in charge of ensuring that foreign investors’ businesses run smoothly. In order to obtain visas, licenses, or approvals, they communicate with the relevant government agencies or local governments on behalf of the organisation they work for.
- If any issues arise, their experience serves as a buffer.
- Given the services they offer, their sponsorship fees are fair.
Local Service Agent Agreement: What Is It?
Local Service Agent (LSA) agreement, more closely resembles a service contract, lays out the terms of the company’s dealings with UAE citizens hired to serve as service agents. This agreement is primarily necessary when there is not a local partner present. and this applies to individual businesses, sole proprietorships, foreign company branches, and free zone company branches. At the Dubai courts, this agreement is executed in the presence of the notary public. The company has the right to terminate or replace the local service agent at any time. To complete all business setup procedures in Dubai, submit the agreement.
Local Service Agent Cost in Dubai
The annual cost of a local sponsor is approximately 8,000 AED. But, before you draft and accept the final payment for a local sponsor, you must take into account several factors. These consist of:
- Your business types.
- Participation of a local sponsor in formalities.
- Local sponsor’s involvement in day-to-day business activities.
- Partnership tenure.
However, for a nominal annual fee, we at Shuraa take on the role of your sleeping partners while giving you the freedom to run your company completely on your own terms.
When do you need Local Service Agent?
The law mandates that a Local Service Agent be chosen to represent your business to the authorities for all professional licenses activities registered on that specific emirates DED. This representative is merely the Emirati voice in your structure. And as a result, he makes no decisions or affects the capital of your business.
For a set annual fee, the Local Service Agent merely provides his or her services.
In this instance, the foreign investor owns all the stock in the company. Therefore, the local service agent has no authority within the organisation.
Business Activities that require Local Sponsor
- IT consultancy;
- Legal consultancy; you need a lawyer who is a UAE national and must also be a shareholder;
- Any type of consultancy where external approval from government is mandatory;
- Architecture business;
- Labour recruitment services;
- Businesses providing banking & financial services;
- Restricted business activity (high risk business);
- Fire equipment related business;
- Civil partnership company.
The options for sponsorship depend on how comfortable the Corporation and the Individuals are. However, while individual sponsorship is more affordable and opens countless business opportunities for innovative setups. Corporate sponsorship for company setup in Dubai offers financial independence and a sense of security. Make an appointment to speak with an expert at Shuraa Business Setup. Learn more about UAE company formation sponsorship and take advantage of its benefits.
Whereas, Shuraa Business Setup consequently becomes your silent or sleeping partner. We can provide you with 100% business operational ownership thanks to a court-approved contract known as the Investor’s Right Protection Contract. To safeguard investors’ interests and guarantees investors protection, our attorneys draft watertight protection contracts. As your local partner in the UAE, Shuraa Business Setup only levies a small annual partnership fee.