How Do Local Service Agents Help Foreign Entrepreneurs Start Their Business In UAE?

local service agent dubai

Even under the best of circumstances, starting a new business could get daunting and formidable. When you throw in the added complications of establishing a business in a foreign nation, the job might feel like a battlefield. The problem of foreign ownership is one of the most prevalent of these difficulties in the UAE. As per the governmental rules, any mainland firm that engages in commercial or industrial operations can only be 49 percent held by a foreign entrepreneur, with 51 percent controlled by a local sponsor.  If you’re a foreign entrepreneur and want to start a firm in Dubai, you’ll need a Local Service Agent in Dubai or a Local Sponsor to ease this task for you.

What Does it Mean to be a Local Service Agent? 

A few Professional firms, sole establishments, civil companies, a branch of a free zone or foreign company, a representative office of a free zone, or a foreign company require a local service agent (LSA) or a company agent in the UAE. But who is a local service agent?

A Local Service Agent is a UAE national who simply acts as a representative for the foreign business owners in the UAE. However, these parties will have no legal stake in their business operations, administration, earnings, or assets, leaving the sole proprietorship to the foreign entrepreneur.

Significance of Local Sponsorship in Dubai

According to the UAE Commercial Companies Law and UAE Civil Law, local sponsors in Dubai are critical to starting mainland firms in Dubai. Sponsors from the community or nominated candidate stockholders are either UAE residents or a corporation with 100 percent UAE nationality. However, local sponsors can also function as local service agents; a local service agent’s share portion in the UAE is always 0%. Furthermore, to hire a local service agent in Dubai, a Local service agent agreement in Dubai must be executed, which will define the yearly sponsorship cost after a mutual negotiation.

Benefits of Using a Local Service Agent in Dubai

  • Individual LSAs tend to build a better relationship with the investor with lesser conflicts. 
  • Will hold 0% of the company’s shares; the investor owns all of the company’s shares. 
  • Do not interfere with the day-to-day business activities of the foreign investor. 
  • It’s far easier to switch local agents than it is to change shareholders. 
  • Sponsorship costs are not prohibitively high.

Criteria to Choose the Best Local Partner or Local Service Agent in Dubai

Certain measures should be examined while choosing a competent local service agent. Some of the crucial factors include:

  • Any prior sponsorship services experience. 
  • Background and business knowledge. 
  • Social standing and reputation. 
  • Citizenship Verification of the United Arab Emirates, whether native or immigrant. 
  • Legal expertise, particularly regarding UAE court procedures.

Other Elements to Consider When Dealing with a Local Service Agent

  • When dealing with a single person, be careful to resolve any disagreements based on specific promises on unforeseen occurrences such as death and retirement. 
  • It’s already a given that the local service agent has 0% in company holdings and only represents the company but should be clear of the terms and clauses and sign the local service agent agreement and submit it in all the forums.
  • Before drafting the agreement, the yearly fee should be agreed upon and followed through.
  • The charge is determined by the amount of prior experience, the type of business, and the market worth. Depending on the market conditions and the nature of the business, the local service agent cost in Dubai might range from 7000AED to 25,000AED or more. 

The ideal approach to locate a dependable local service agent in Dubai is to contact reputable firms such as the Corporate Business Enterprises (CBE) by The Corporate Group.


If you have the appropriate know-how and assistance, starting a business may be simple. However, it’s a good idea to get advice from an experienced and reliable company formation professional like CBE. As they are highly connected in the industry, they could assist you in speeding the process, eliminate any delays or problems, and help you find the right Local sponsor or Local service agent in Dubai as per your company demands.

Leave a Reply

Your email address will not be published. Required fields are marked *