Local Service Agent Agreement in Dubai: Your First Step to Starting Your Business Safely

The United Arab Emirates opens its doors wide to foreign investments and facilitates the procedures of practicing commercial, professional, and industrial activities. However, foreign investors are required to contract with an Emirati national who undertakes the legal procedures and facilitates their business operations under a properly notarized Local Service Agent Agreement.

Are you searching for a trusted local service agent? Are you worried about finding a reliable one? We will walk you through the most important aspects before signing a Local Service Agent Agreement.

Local Service Agent Agreement for Foreign Companies in the UAE

A Local Service Agent (LSA) Agreement is a legal document concluded between a foreign company and an Emirati national licensed to act as a service agent. Under this agreement, the local service agent undertakes legal and civil responsibilities on behalf of the foreign company to facilitate its establishment and the practice of its activities in the UAE.

According to the UAE Federal Commercial Companies Law, foreign investors wishing to conduct certain commercial activities must have a local partner holding at least 51% of the company’s capital, except for certain types of companies. The law also allows foreign companies to open branches in the UAE mainland provided that they appoint a Local Service Agent.

This makes the LSA Agreement a vital requirement for foreign companies to ensure they conduct business activities in compliance with UAE regulations.

It is also worth noting that the Local Service Agent Agreement must be drafted in Arabic—one of the key conditions for company formation in the UAE. If one of the parties does not speak Arabic, the agreement can first be written in English and then fully translated into Arabic. Importantly, the contract must be notarized by a private notary in Dubai in both versions.

General Procedures of a Local Service Agent Agreement

1. Define the commercial activity you want to practice.
   
2. Select an authorized and reliable local service agent.
   
3. Draft a legally binding agreement clearly outlining responsibilities, fees, duration, and termination clauses.
   
4. Submit the official application to the competent authority (such as the Department of Economic Development) along with required documents like ID and trade license.
   
5. Pay the official registration fees.
   
6. Officially notarize the agreement with a notary or relevant authority (including e-signature and possible interview if required).
   
7. Receive the notarized digital or final certified document.

Responsibilities of a Local Service Agent

The authority and duties of the local service agent are determined by the LSA Agreement. Importantly, the LSA has no right to interfere in the company’s management or business policy. His responsibilities mainly include:

• Handling the issuance of professional licenses.
  
• Completing renewals of trade licenses.
  
• Supporting in obtaining and renewing work visas with the Ministry of Labor and other government authorities.
  
• Representing the foreign company before government departments and local authorities.
  
• Providing the necessary communication channels between the company and local authorities.
  
• Facilitating company establishment procedures and offering logistical support for business expansion.

Termination of a Local Service Agent in the UAE

You can terminate your Local Service Agent Agreement in the UAE through the following steps:

1. Submit an official cancellation request to the Department of Economic Development in the emirate where the company operates.
   
2. Draft and sign a formal cancellation letter personally.
   
3. The application is reviewed, and a response is given within 30 days via the authority’s website or office.
   
4. Pay the official cancellation fees once the request is approved.
   
5. After cancellation, a new application must be submitted to appoint another Local Service Agent.

Required documents for cancellation include:

• Emirati national IDs.
  
• Certified copy of the company’s Memorandum of Association.
  
• Notarized LSA Agreement.
  
• The document to be certified.
  
• Trade license of the company and the agent’s authorized signature.

FAQs

When can an LSA Agreement be terminated?
It can be terminated by either the foreign investor or the Emirati agent for valid reasons such as:

• Breach of obligations by either party.
  
• Poor performance or negligence of the agent.
  
• Agent exceeding his legal authority.
  
• Persistent disputes between company and agent.
  
• Loss of legal capacity of either party.
  
• Dissolution or liquidation of the company.
  
• Expiry of the contract or mutual agreement to terminate it.

What is the difference between a Local Service Agent and a Local Partner?
Yes, there is a key difference. Both must be Emirati nationals, but:

• A Local Service Agent is contracted annually by foreign companies for a fixed fee to facilitate legal and governmental procedures without any ownership or management rights.

• A Local Partner holds an equity share (usually 51%) in the foreign company and has rights in management and business decisions.
  

Who does not need a Local Service Agent?
Companies established in free zones in Dubai do not require an LSA, as foreign investors can own 100% of their companies there. Similarly, certain activities and professional licenses do not require a service agent.

Conclusion

To ensure your business activities comply with UAE commercial law and operate smoothly, you should not waste time navigating complex procedures alone.

At our Private Notary Office in Dubai, we provide ready-made and reliable Local Service Agent Agreements tailored to your company’s needs. We also assist in drafting and notarizing corporate powers of attorney and ensuring your documentation is legally valid and compliant.

👉 If you are planning to establish your company or expand into the UAE market, contact our legal experts today and make the setup process faster and easier. We are available 24/7 to support you—book your free consultation now and take your first step toward successful business establishment in Dubai.