Local service agent (LSA)

An Emirati individual or company appointed by a foreign-owned mainland professional firm to handle government liaison. An LSA holds no equity and has no claim on profits — the arrangement is a fixed annual fee for a service. It is distinct from the old 51% local partner requirement, which the 2021 reforms removed for most activities.

Where it comes up

Before 2021, foreign-owned mainland professional firms appointed a local service agent to handle government liaison. The arrangement survives for a narrow set of activities, and it is routinely confused with the old 51% partner requirement it replaced.

What it costs

A fixed annual fee, negotiated. The LSA holds no equity and takes no share of profit.

Who it applies to

Foreign-owned mainland companies in the narrow set of professional activities that still require one.

How it actually goes

1. Identify the agentA UAE national individual, or a company wholly owned by UAE nationals.
2. Agree the feeAn annual amount, fixed in the agreement. It is a service fee, not a share of profits.
3. Notarise the agreementSigned before a notary public and submitted with the licence application.
4. Renew annuallyThe agreement runs with the licence and is checked at renewal.

An LSA holds no shares, has no claim on profits and no say in management. Confusing an LSA with the old 51% local sponsor requirement is the most common misunderstanding about UAE mainland ownership, and it costs founders free zone decisions they did not need to make.

In short

• No shareholding and no profit entitlement
• Paid a fixed annual fee
• Still required for a narrow set of mainland professional activities

Where this leads

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