The Operative Agent
The rationale behind the use of such an entity is that the company fully undertakes business for and on behalf of a non-resident principal e.g. an international company in the UAE, not currently intending to set up a branch in the European Union.
The concept of the structure is that the principal, who has the knowledge, know-how and business acumen, engages an independent company to act as its agent for some or all of its international business.
The operative agent in turn will enter into trading agreements with customers of the principal to buy or supply goods from or to third parties for and on behalf of the principal.
Generally a formal agreement is entered into between the principal and the operative agent, which would entitle the operative agent to a fee relating to the services that it is requested to perform. All trading operations are executed by the operative agent for and on behalf of the principal.
The operative agent is a European company, having a Tax and VAT number, set up in the European Union.
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