Investors who want to do business in Italy can choose between several types of companies in Italy, each with its own characteristics and advantages. The Italian Civil Code governs the incorporation of businesses and sets forth important legal provisions. When starting a business in Italy, investors will pay attention not only to choosing a suitable business form, but also to the taxation and reporting requirements, the level of liability they expose themselves to, and other criteria. Our lawyers in Italy detail the main legal forms available to those who set up companies in Italy and summarize some of the most important compliance requirements below.
| Quick Facts | |
|---|---|
| Who can set up companies in Italy? | Local and international entrepreneurs interested in developing their activities in Italy |
|
Types of companies available in Italy |
– limited liability company (SRL), – joint stock company, – sole proprietorship, – partnership limited by shares, – branch, subsidiary, etc. |
|
The most popular structure |
SRL. Simplified SRL (SRLS) is also popular |
| Legislation | Italian Corporate Law |
| Authority in charge of incorporation |
Italian Business Register |
| Minimum share capital for an Italian SRL |
EUR 1 |
| Minimum share capital for joint stock company (JSC) |
EUR 50,000 |
| Opening a liaison office in Italy |
Available option. This is also known as a representative office. |
| Are shelf companies available in Italy? (YES/NO) |
YES |
| Main document for company formation in Italy | Articles of Association |
| Requirements for opening a branch in Italy |
– declaration of the parent company intending to open a branch in Italy, – IDs and signatures of shareholders, – bank account, – tax registration, etc. |
| Minimum share capital for subsidiaries in Italy |
EUR 10,000 |
| Business license application |
Required for the type of activities to be developed in Italy |
| Are partnerships available in Italy? (YES/ NO) |
YES |
| Working with our Italian lawyers |
We provide support for: – business incorporation, – tax registration, – business license application, – trademark registration, – investment consulting, and many more. |
The most commonly used type of company in Italy is the limited liability company, however, other business forms may be more suitable, depending on the intended activities.
Table of Contents
Legal entities in Italy
Foreign investors who are interested in company registration in Italy can register the following types of legal entities:
- limited liability company;
- joint stock company;
- partnership limited by shares;
- general partnership;
- limited partnership;
- cooperative;
- sole proprietorship.
The sole trader is the simplest business form and the one that has the highest level of liability for its founder. The entrepreneur who will run the business will be liable with all of his/ her assets, as there is no legal distinction between the business and its owner.
The partnership can be a suitable choice for two or more business partners, and it involves fewer management and set up processes compared to a corporation, however, the general partner will also be fully liable for the debts and obligations of the partnership.
The Italian company (set up as a limited liability company or a joint stock company) is the type of company in Italy that offers a convenient level of protection for the founders. As the name suggests, their liability is limited to the amount invested in the company’s capital.
An available option for foreign companies that only require a local presence for liaison and promotional purposes is the representative office in Italy. This office cannot be used to derive income from Italy, only to engage in marketing and promotional activities.
At the same time, businessmen can opt to register a subsidiary or a branch of a foreign company. The main difference between the two types is that the subsidiary can be registered as an autonomous legal entity. Its activities and investment policies are decided by the local management, while in the case of a branch, the company will be dependent for all its activity on the parent company.
The video below describes the available types of companies in Italy:
Each of the aforementioned business forms in Italy have different characteristics and advantages. The wide range of legal forms to choose from when setting up a business in Italy can be discussed with our Italian lawyers.
The corporations in Italy
Investors who want to open one of the two types of corporations in Italy must know that these have certain particularities. Our attorneys in Italy highlight these below:
- Minimum capital: the minimum capital for the limited liability company is EUR 1, while the joint stock company requires a minimum capital of EUR 50,000 (and at least 25% of the amount deposited in the company’s bank account);
- Capital payment requirements: when a limited liability company has a capital equal to or higher than EUR 10,000, at least 25% of it must be paid into the company’s bank account);
- Governance: the limited liability company can appoint a single director or a board of directors. The joint stock company can be governed via the traditional system or the one tier system;
- Accounting and audit: all companies observe the accounting requirements applicable in Italy. The joint stock is subject to different audit requirements, compared to the limited liability company. The latter is only subject to audit when it exceeds certain limits for two consecutive years.
Our team can give you more information about taxation in Italy and how double tax treaties are applied.
Setting up a company in Italy
Investors who wish to open a company in Italy in the form of a limited liability company have to:
- Choose the business form: this is done according to the size of the company and the projected business needs;
- Draw up the incorporation documents: these are the Articles of Association which include key details on the company, its name, its registered office, shareholding structure and more;
- Register the business: this step is performed with the Business Register and it is mandatory;
- Obtain business licenses: these are issued by agencies or regulators that oversee the industry in which the company will operate.
Our lawyers in Italy can give you more information about the mandatory business registration steps once you choose one of the types of companies in Italy and commence the incorporation process.
Our law firm also offers other types of services, such as legal assistance for buying property in Italy.
Businessmen interested in finding more details on the types of companies available for incorporation can contact our law firm in Italy.