International entrepreneurs who want to enter the Italian market can open two types of business forms: a subsidiary or a branch. These two legal entities have important differences regarding the parent company’s liability towards them. Our Italian company formation agents can help foreign companies in establishing subsidiaries and this article can help you make an idea about this business structure.
| Quick Facts | |
|---|---|
| Applicable legislation (home country/foreign country) |
Italian Company Law |
|
Best used for |
– banking, – insurance, – trading, – manufacturing |
|
Minimum share capital |
Yes |
| Time frame for the incorporation (approx.) |
Around 1 week |
| Management (local/foreign) |
Local |
| Legal representative required |
No |
| Local bank account |
Yes |
| Independence from the parent company | Yes |
| Liability of the parent company | No, the subsidiary is fully liable |
| Corporate tax rate | 24% |
| Possibility of hiring local staff | Yes |
Table of Contents
The particularities of an Italian subsidiary
A majority of subsidiaries are organized in the form of private or public limited liability companies. A private limited liability company opened in Italy requires a minimum share capital of EUR 10,000 EUR and the liability of the shareholders is only as large as their contribution to the company’s capital. In some cases, the minimum capital for this type of company can be 1 EUR, for a simplified form of private limited liability company. The management structure for this type of company consists of a management board appointed by the general meeting of the shareholders; the individuals who run the business must be members of the company. There are no restrictions as per the nationality of residence of the company directors. This type of company cannot publicly transfer its shares.
Foreign investors may also choose to establish a subsidiary in Italy in 2024 shaped in the form of a public limited liability company. The shares of a public limited liability company may be transferred to the public and can be registered on the Stock Market. For opening a public limited liability company in Italy, a minimum share capital of EUR 50,000 is needed and there are no limitations on the number of company shareholders or their nationality. This type of company has a more complex management structure compared to the private limited liability company. Below is an infographic with details about subsidiaries in Italy:
Subsidiary registration in Italy in 2025
The procedure for establishing a subsidiary in Italy in 2025 does not last longer than 6 days when all the requirements are observed, and the documents are properly submitted. Here are the steps for registering a subsidiary in Italy:
- The first step that has to be taken for opening a company in Italy is depositing at least 25% of the capital in a bank account and requesting the certificate of deposit.
- The Italian law also provides that the articles of association, the foundation deeds, and the decision to establish a subsidiary in Italy must be notarized. Moreover, a registration tax must be paid.
- The founder must also buy the corporate and accounting books and pay the government grant tax.
- The subsidiary must be registered with the Registro delle Imprese (Register of Enterprises). Our experts in company formation in Italy can help you during this phase.
We invite you to explore our video on the subsidiary set up in Italy:
Documents related to opening a subsidiary in Italy
Apart from the subsidiary’s incorporation documents, the foreign company must also prepare other paperwork which must be submitted to the Trade Register. This paperwork refers to:
- information about the parent company, among which its legal address in a foreign country;
- a lease contract for the registered address of the Italian subsidiary (a virtual office is also a good option);
- information about the representative of the foreign company in the Italian subsidiary;
- information about the share capital of the subsidiary (a bank receipt showing the deposit).
If a branch must file the annual report, a subsidiary does not have this kind of requirement. However, a subsidiary must keep its own books, and balance sheets, and submit income tax returns and VAT. These matters can be entirely explained by one of our specialists. Our local consultants can advise on all the documents required to open an Italian subsidiary.
Why open a subsidiary in Italy?
The subsidiary company is a suitable option for foreign companies that want to:
- offer full independence to the newly established company in Italy;
- benefit from the tax advantages the Italian tax authorities provide, as the subsidiary will be treated like an Italian tax resident;
- the subsidiary to offer other services or complete other activities than the parent company;
- the parent company is a holding company and wants to benefit from the Parent-Subsidiary EU Directive.
Some facts about the Italian economy
Even if the Italian economy didn’t grew according to estimates for 2024, the country remains on the list of preferences of those who want to open a business in this country, as a subsidiary can be a good option. Here are some statistics about Italy’s economy:
- Italy registered an economic growth of about 0.5% in 2024, according to data provided by the National Bureau of Statistics, below the government estimates of around 1%.
- In Italy, the net exports increased by about 0.7% in 2024 and the same upward trend is expected to be recorded in 2025.
- About 6.5% was the unemployment rate in 2024 and is expected to decrease in 2025, reaching around 6.2% in Italy.
- Specialist estimates show that Italy’s GDP will reach around 0.8% in 2025.
Interested in payroll services in Italy? Would you like to hire the services of our accountants in Italy? You can outsource these types of services, by choosing our team of specialists in the field. Plus, if there are further details you need to know about establishing a subsidiary in Italy, please contact our specialists in company incorporation in Italy. If you are interested in obtaining a golden visa in Italy we can help you with the legal procedure.