Web Service deployment

I am working on a web application which is deployed on the Live server without the dll's. So if I make any changes in the development, I copy the changed files and restart the IIS to push changes to Live. Now I have added a new web service reference to the web application. Everything works as expected on Development. But if I copy the changed files and the Web Reference folder to the Live server and restart IIS, it does not work. It throws the error:

'MyWebApp.MyWebReference.MySOAPServer' is not defined.

At the following line:
Dim webservice As New MyWebApp.MyWebReference.MySOAPServer

Is it required that I copy the project dll's along with web service to Live server? Is there a work around? Thanks!