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Company Formation Italy



Establish a Subsidiary in Italy

Updated on Tuesday 12th December 2017

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Foreign investors who want 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. While the branch is completely dependent on the foreign company, the Italian subsidiary is a separate legal entity.

The choice to establish a subsidiary can be more advantageous in some cases for foreign investors. The main benefits derive from the fact that a subsidiary is regarded as a separate legal entity, with a majority of capital owned by a foreign company and having the power to make its own management decisions.

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 the 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 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 at 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. Also, it has to observe more stringent auditing and reporting requirements. Companies listed on the Stock Exchange must observe the International Accounting Standards. A certain flat fee applies for the registration of a new stock company. 
All Italian companies are subject to taxation on their income derived from Italy. The corporate income tax rate is 27.5% and other taxes include the stamp duty, the transfer and property tax and the value added tax.

Subsidiary registration in Italy

The procedure for establishing a subsidiary in Italy does not last longer than 6 days when all the requirements are observed and the documents are properly submitted. The founders must pay attention to the fact that, within 30 days from the decision of incorporation, the company must register the company with the Italian Company Register.
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 company registration experts in Italy can help you during this phase. The Labor Office in Italy must also be informed when the company hires employees.
The Register of Enterprises must be announced no later than 30 days of any relevant changes in the company such as those regarding the number of members, the company’s decision to issue bonds or any increases or decreases in the capital.  
If there are further details you need to know about establishing a subsidiary in Italy, please contact our company incorporation agents in Italy


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Starting a company in Italy can be difficult since it involves such complex procedures. The team from CompanyIncorporationItaly is very qualified and benefits from extensive expertise in this area.

Mihai Cuc, Partner of
Enescu & Cuc Law Firm

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