Usually you host your WCF service under IIS in your final location (because then it can also determine the URL for you), however you can also just start it directly from visual studio, and then in your client, in Visual Studio, you you can right-click on the "Links" link and select "Add Service Link" and point it to your WCF service, wherever it works.
Then the application will have its own WCF client created for it from WSDL.
Please note that it will also set this URL for the service in your app.config, so if you didn’t have the service hosted in its final URL, you will have to change this URL on the client when you move it to production.
So, to answer your question more directly; yes, your service should work when you add a service link from a client application.
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