The company incorporation procedure in Italy
The company incorporation procedure in Italy is not very difficult and is similar to those in other countries. An application for registering the company must be made at the Italian Trade Register and, after the application is processed, a registration certificate is issued for your new company.
Another obligation for the foreign investor in company formation in Italy
is to execute a public deed of incorporation at the notary office, buy the corporate and accounting books and pay a government grant tax.
The investor must also submit an application to the Register of Enterprises in order to obtain a tax identification number and a VAT number
. The company must also be registered with the Social Security Administration. In order to hire employees in Italy
, an entrepreneur will need to observe the provisions of the Labor Law and announce the employment to the Labor Office.
Our company formation agents in Italy
can give you detailed information about the steps required to set up a company in Italy
. We can provide you with complete assistance and advice if you want to start a business.
Opening a company bank account in Italy
One of the most important aspects of opening a company in Italy is related to the establishment of a corporate bank account. This account is needed for depositing the share capital and for conducting commercial activities.
- submitting the company’s incorporation documents with the chosen bank;
- completing the necessary paperwork issued by the Italian bank;
- appointing a company representative who will keep in touch with the bank;
- choose the services which best suit the need of the Italian company.
Apart from the company bank account, a business can also create merchant accounts for accepting online payments. These types of accounts are mostly used by e-commerce companies
, such as online stores, in Italy.
Our Italian company formation representatives can help foreign entrepreneurs choose the right type of structure for their businesses here and can represent them in the procedure for opening the bank account.
Common questions about the company registration process in Italy
Italy is very appealing to foreign enterprisers who usually have many questions related to the requirements and process related to company formation in Italy. Among these questions are:
Can I register the company as a sole shareholder, even if I am a foreigner?
Yes, full foreign ownership is possible in Italy even for single shareholders. Among the types of structures, foreign enterprisers can use are the sole proprietorship and the private limited liability company
What is the minimum amount that I need to set up the company?
It depends on the type of company you want to establish: in the case of the private limited liability company, you will need 1 euro, while in the case of a public company, the new requirement is 50,000 euros.
Can I register my company remotely?
Yes, remote company registration in possible in Italy, however, you must appoint a local representative and grant him or her power of attorney to complete the process.
Does an Italian company need a resident director?
No, the law no longer requires for resident directors in Italian companies.
How long does the company registration process take in Italy?
The usual procedure for setting up a company in Italy
takes about a week, however, this timeframe will depend on how much time it takes for the documents to be prepared.
How to decide between a branch office or a subsidiary in Italy
Foreign companies that want to develop business activities in Italy also benefit from the option of registering a branch office or a subsidiary. These entities are generally used for the purpose of expanding a company on a domestic or foreign market and the decision should be based taking into account several aspects.
For instance, the branch office will be dependent on its parent company, thus, it is not considered a different legal entity. In this case, the management decisions concerning the activity of the branch office will be taken by the parent company, which is also liable for the debts of the branch office. However, the branch office provides the advantage of having lower costs during the set up of the business in Italy.
On the other hand, the subsidiary has the advantage of being an independent structure from its parent company, and it is set up with its own share capital. Due to the fact that the subsidiary is considered a separate legal entity, the structure will be incorporated following the standard registration procedure applicable to all Italian businesses.
Thus, it is necessary to apply for a VAT number issued by the National Tax Office, register the legal entity with the local Chamber of Commerce, sign a public deed of incorporation in front of an Italian public notary – in this case, it is generally required for the company’s representatives to be present during the procedure; if not, they may grant the power of attorney to our team of Italian lawyers, who can represent them in this specific case.
Regardless if the investors will decide on the branch office or the subsidiary, it will be compulsory to register an official business address in Italy, where the company will carry out its activities. In the case of a subsidiary, it will be necessary to open a corporate bank account. Please note that companies importing and exporting goods should also conclude the steps for EORI registration in Italy, and our team of Italian lawyers can assist with information on the procedure.
What is the share capital for opening a business in Italy?
In the case of the most employed type of business vehicle in Italy - the limited liability company - the minimum share capital is established at EUR 1 as mentioned earlier. In order to register a s.r.l.s in Italy, the capital requirements state that the company may have a capital of maximum EUR 10,000, while in the case of a joint stock company, the minimum share capital is EUR 50,000.
What are the main taxes applicable to businesses in Italy?
Companies performing commercial activities in Italy are liable to taxation. A company can be taxed in Italy as long as it has a place of management or a main business activity developed in this country. Companies are liable to value added tax, corporate income tax and others as long as they have been operating in Italy for at least 183 consecutive days (in this case, the company will be seen as a permanent establishment in Italy).
No capital gains tax
Foreign investors are attracted by the tax regulations in Italy because they are not required to pay the capital gains tax or a wealth tax. The real estate market is growing each year as the economy is recovering from the crises.
The country is member of the EU and G8 (the industrialized countries) and that means it is an safe destination for foreign investors. The country has a well trained and skilled labour force and it offers high stardards for living. Italy, despite the economic crisis, it is the 6th economic power in the world and the economy of the country is based on small and medium companies. Italy is well-known all around the world for its luxury goods produced by famous companies.
The Italian market, with 60 million consumers, it is an important destination for foreign entrepreneurs who want to expand their business.
Company Act in Italy
An investor who wants to open a company in Italy must observe the relevant legislation and comply with the legal requirements. The most important legislative documents for running and registering a company in Italy are:
- the Italian Civil Code;
- Legislative Decree 58/1998 (abbreviated TUF in Italy);
- The rulings set forth by the National Commission for Companies and the Stock Exchange (CONSOB);
- the code issued by the Italian Stock Exchange (Borsa Italiana)
- the company’s own Articles of Incorporation.
Although the legal framework listed above only applies to listed companies in Italy, all company owners should have a solid knowledge of the laws and regulations applicable to their type of business.
The main provisions of the Italian Company Law
The Company Law, consisting of several legal documents, regulates a series of important aspects about company formation in Italy. Among the most important legal provisions we can list the following:
- the types of companies
that can be incorporated in Italy: limited liability company
, joint stock company. cooperative, different types of partnerships, sole proprietorship, branch or representative office;
- company governance: the duties of directors in Italy and those of the Boards in the company;
- shareholders’ duties, obligations and rights and the protection of minority shareholders;
- how corporate litigation must be resolved and the legal tools to be used in such cases;
- financial requirements applied to all types of companies registered in Italy;
- auditing compliance – not all companies in Italy must file audited accounts;
- the company liquidation procedure, which can be voluntary or compulsory.
The Company Act
also specifies the characteristics of each type of company
, its mandatory minimum share capital and the manner in which shares can be distributed. There are significant differences for companies which are not listed on the Stock Exchange and those that are listed.