Italian companies intending to set up a company in the UAE have two options:
1) the establishment of a company in the Mainland;
2) the establishment of a company in the Free Zones.
Despite foreign companies prefer to set up their activities in the free zones, since such option does not require the presence of a local partner, this is not always the best solution, especially if right from the start the parent company has a strong interest towards unlimited access to the local market’s resources.
The formation of a Limited Liability Company in the Mainland is governed by the 1984 Commercial Companies Law, according to which in order to set up a LLC, members from a minimum of two to a maximum of fifty -be they natural or legal persons- will first of all have to sign the company’s articles of association and register the LLC with the competent Authorities.
The required steps to form a limited liability company differ significantly depending on the rules in force in each single Emirate.
However, we can identify the following steps as a general rule:
- choose a trade name for the company and have it approved by the Licensing Department of the Department of Economic Development;
- draft the Memorandum of Association, which must be signed by all members at the local court;
- once the approval of the Department of Economic Development is obtained, the company will be registered in the Commercial Register and its Memorandum of Association will be published in the Bulletin of the Ministry of Economy and Commerce;
- once the license is officially issued by the Department of Economic Development, the company will be formally incorporated and registered with the local Chamber of Commerce and Industry.
Bearing in mind the above, the choice towards one or the other option should in any case always be made depending on the type of business that the parent company intends to conduct in the United Arab Emirates.
(Bologna Office – Linda Tontodonati – 0039(0)512750020).
