If you are a foreign company that wants to establish a business in Dubai, you may need to appoint a local service agent (LSA). This is required for companies in certain sectors, as stipulated by the Dubai Department of Economic Development (DED).

An LSA is a UAE national or a company that provides the necessary support to foreign companies. They act as a link between the foreign company and the UAE government. Their responsibilities include providing administrative support and assistance with obtaining necessary licenses and permits.

To appoint an LSA, you must sign a local service agent agreement (LSA agreement) with them. This is a legal contract that outlines the terms and conditions of the relationship between the foreign company and the LSA.

The LSA agreement must be registered with the DED, and the cost of the registration varies depending on the sector in which the company operates. The agreement must be signed by both the foreign company and the LSA, and it should include the following details:

1. Scope of services – This section should outline the services that the LSA will provide to the foreign company, including administrative support and assistance with obtaining licenses and permits.

2. Duration of the agreement – The agreement should specify the duration of the relationship between the foreign company and the LSA.

3. Compensation – The amount of compensation to be paid to the LSA should be clearly stated in the agreement.

4. Termination – The circumstances under which the agreement can be terminated should be clearly stated in the agreement.

5. Confidentiality – The agreement should include a confidentiality clause that prohibits the LSA from disclosing any confidential information about the foreign company.

It is important to note that the LSA agreement is a legal document, and any violation of the terms and conditions can result in legal action. Therefore, it is important to ensure that the agreement is drafted carefully and reviewed by legal experts.

In conclusion, if you are a foreign company planning to establish a business in Dubai, you may need to appoint an LSA. The LSA agreement is a legal contract that outlines the terms and conditions of the relationship between the foreign company and the LSA. To ensure compliance with the regulations and avoid any legal issues, it is important to seek the advice of legal experts when drafting and reviewing the LSA agreement.