Investors who want to start a business have several types of companies in Italy from which to choose from. The country has one of the most iconic and historically rich lands in Europe and offers numerous possibilities for investments. Small and large corporations alike have begun their economic activities here, in a country that has raised some of the most iconic brands in the world.
When foreign investors choose to open a company in Italy they must be informed about the basic principles of doing business and managing a company in this country. Our company registration agents in Italy have worked with numerous foreign investors and are prepared to help you throughout the company formation procedure.
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Who can open companies in Italy?
Italy is one of the most opened countries to foreign direct investments in Europe. Apart from local entrepreneurs, the other categories of investors who can open companies in Italy are:
1. foreign individuals with residency in any country within the European Union;
2. foreign citizens with residence in the European Economic Area (EEA), such as Norway, Liechtenstein, Iceland;
3. foreign citizens from countries with which Italy has signed various types of treaties (Italy has signed many trade and investment agreements);
4. foreign companies from the EU or EEA, as well as companies registered outside these areas.
Starting a business in Italy and the required formalities come to the attention of our local specialists. They can take care of preparing the documents, opening a bank account, registering for the payment of taxes, and obtaining a business license, among others. The minimum share capital for an SRL in Italy is 1 euro, so opening a business in this country is quite simple and advantageous from this point of view.
What are the main types of legal entities in Italy?
The types of companies that are available for incorporation in Italy are the following:
- – the limited liability company: which is the most popular business form used by local enterprisers;
- – the joint stock company: which is employed by those who want to enter into large operations;
- – the partnership limited by shares: a partnership which resembles the limited liability company in terms of obligations of the participants;
- – the general partnership: an association between at least two members who share the profits and liabilities of the business;
- – the limited partnership: it is set up by at least two members: a general partner and a limited member;
- – the cooperative: an Italian type of structure which is mostly employed by those in the agriculture industry;
- – the sole proprietorship: the simplest type of structure available for single business owners;
- – the branch and the representative office: two business forms used by foreign companies with activities in Italy.
The private limited liability company is one of the most popular business types in Italy, especially for small and medium-sized companies. The liability of its members is limited to the amount invested in the company: contributions which can be made in cash or in kind, if so agreed by the shareholders. This type of company requires a minimum share capital of 10,000 EUR.
Foreign investors must know that there are two types of private limited liability companies according to the Italian Company Law:
- – the standard limited liability company (società a responsabilità limitata ,S.r.l.);
- – the simplified limited liability company (società a responsabilità limitata semplificata, S.r.l.s.).
The simplified S.r.l. is subject to the following restrictions compared to the traditional S.r.l.:
- – the shareholders of a simplified S.r.l. can be only individuals;
- – the minimum share capital for the simplified S.r.l should be 1 euro and a maximum of 9,999.99 euros.
The simplified S.r.l. is required to used a standardized form for the articles of association and amendments are not possible for these model articles or bylaws.
There are no nationality requirements related to being a shareholder or a director of an Italian limited liability company. Foreign investors may also set up this type of company without an Italian partner. Any foreign company or foreign natural person can hold shares in an Italian company. The management of the traditional S.r.l. can take place through a single managing director or a board of directors. The powers, either separate or joint, are described in the company’s constitutive documents.
The joint stock company or S.p.A. is more suited for large companies. The shareholders are liable only to the extent of their contributions made, to a minimum share capital of 50,000 EUR. The capital is divided into transferable shares. This is the only business form that can be listed on the stock exchange, therefore it is suited to the needs of those companies that have a large number of shareholders. Because of its nature, namely, the fact that it is listed on the stock exchange, this company must observe more strict requirements for accounting and reporting. The S.p.A is governed through a system that includes the Board of Directors and the shareholder’s meeting or through a one-tier system that includes the Board and the management control committee. A two-tier system is also possible, where a Management Board and a Supervisory Board coexist.
The partnership is a recognized form of company in Italy, however, an important distinction is made in comparison to the corporations mentioned above: the partnership does not have legal personality, meaning that the founder’s identities are not separate from that of the partnership, like in the case of the joint stock or the limited liability company. The commitment of the partners, their shared common goals and their unified experience contribute to the success of the collaboration and the business.
There are several types of partnerships that can be incorporated in Italy and the difference between them lies in the degree of liability for the partners. The partnership limited by shares has two types of shareholders those with limited liability and those with unlimited liability. The limited partnership also has two types of partners: the general ones who are jointly and severally liable and have management responsibility and the limited partners who do not make any managerial decisions and who have a different, limited liability regime. The general partnership in Italy has no legal personality and all of its partners are jointly and severally liable.There is no requirement to have minimum share capital in case of a partnership. One of our agents who specialize in company formation in Italy can provide investors with more information on the nature of the partnership and the founder’s liabilities.
The sole proprietorship or the sole trader is not a legal entity, it is a one-man business and the simplest business form. The entire liability for the business falls unto the individual running the business.
The branch is an extension of the parent company and, as the representative office, it is not separate from the foreign legal entity. This means that the foreign parent company is liable for the debts of its Italian branch, should it choose to open one. The difference between the branch and the representative office lies in the ability to engage in economic activities: the representative office can only be used for marketing or promotional purpose and cannot engage in economic activities while the branch may perform the same economic activities as the foreign company. The branch must also be registered with the Business Register in Italy, however, in this case, the registration can be faster than in the case of a S.r.l. or S.p.A.
Our company registration agents in Italy can give you detailed information about all the types of companies in Italy, including branches and subsidiaries.
We also invite you to watch our video on the types of companies in Italy:
What are the requirements for company incorporation in Italy?
Companies in Italy need to be registered in the Business Register. This is mandatory for the purpose of lawfully engaging in economic activities on Italian territory and it is a process that starts with preparing the company’s constitutive documents, for new companies, or the foreign company’s constitutive documents for the branch. The incorporation deed is drawn up in front of a public notary in Italy and the Articles of Association include information about the business: its scope and type, its duration, if applicable, the names of the members and directors, information about the share capital and the types of shares (and their transferability, when applicable). One of our agents who specialize in company formation in Italy can provide investors with more information on the form of these Articles of Association. In general, there is no standardized form, however, each company must draw up the standard clauses, as they apply in its case and for its type.
Once they are registered, companies must then apply for a VAT number. Our experts can help you prepare and draw up the necessary documents for incorporating a company and we can also assist during the tax registration phase. The main taxes for corporations include the corporate income tax, the regional tax on productive activities (for companies that engage in production activities), the value added tax and other local taxes. In general, the tax year is the same as the calendar year in Italy, with a twelve-month period.
Local and foreign investors can request specialized company incorporation services offered by our team of agents in Italy. We provide tailored solutions and can assist investors from the earliest stages of company formation, starting with choosing the appropriate type of company and choosing the company name.
If you want to open a company or branch in another country, such as UAE – Dubai, we can put you in touch with our local partners.
Our company formation services in Italy cover:
- – the registration of the director(s) and shareholder(s) of the company with the Tax Authorities;
- – the preparation of all the relevant documents such as the Memorandum and Articles of Association and the power of attorney etc.;
- – the gathering of all the necessary documents and information from the client and the preparation of the documentation to be filed with the authorities;
- – obtaining a certified email address and a VAT number;
- – helping the client with the bank account opening which takes no more than one day.
Italy offers a number of options when choosing the most suitable legal form for a new business. the wide variety of corporate forms, and the fact that the most commonly employed one, the S.r.l. also has a simplified form, shows the Italian authorities’ interest towards making investment flexible and accessible to all categories of investors, both experienced ones and those looking to open a startup.
Do you need payroll services in Italy? We advise you to contact our accounting firm and discover the costs of this type of service. We mention that the delivery of salaries in the company can be done with the help of payroll procedures. First of all, they will be calculated, then the taxes will be paid and distributed to the employees’ accounts. We recommend you outsource this type of service because they come with a series of benefits, among them, advantageous costs.
For more information about the legislation for foreign investments please contact our company registration agents in Italy.