Italy is regarded as the eighth economic power in the world as well as the second manufacturing Country in Europe with remarkable know-how in various strategic sectors.
Given this, many investors and entrepreneurs are deciding to invest and set up companies in Italy.
Advantages of company formation in Italy
- Openness of the primary European markets
- Skilled and flexible workforce
- Beneficial and flexible taxation
- Developed and stable corporate legislation
- Comparatively low incorporation expenses
- Ability to receive VAT number prior to incorporation
- Availability of robust imports-exports and trading sectors
Tax incentives from the Italian government for setting up a business in designated geographic zones
Company structures in Italy
There are three main types of Italian company registration for foreign investors and entrepreneurs, and they are as follows:
- Limited liability company (società a responsabilità limitata or S.r.l.)
- Joint Stock Company (Società Per Azioni or S.P.A.)
- Branches
Italian Limited liability company
A limited liability company is the most popular type of company in Italy. The primary feature is that the members are protected from their obligations.
Types Of Italian Limited Liability Company
There are two major types of limited liability companies in Italy:
Traditional Società A Responsabilità Limitata
- It can execute any type of business
- It has limited liability for quota-holders.
- The sum of the shareholders’ contributions is the share capital.
Simplified Società A Responsabilità Limitata Semplificata
- It has reduced set-up costs
- It also has certain limitations
Joint Stock Company (Società Per Azioni or S.P.A.)
This form of company better suits the needs of large businesses employing a significant amount of capital.
The features of a Joint Stock Company (S.P.A.)
- Minimum of 1 director
- Suitable for medium to large companies
- Minimum share capital of €120,000
- Not restricted to foreign investors
- Its accounts must be filed annually with the Registrar of Companies
Branch Of Foreign Company
Contrary to the establishment of an Italian company, a branch is not a separate legal entity but a foreign unit of the mother company.
Features of a Branch office in Italy
- It’s not a separate legal entity from its parent company
- It has the power to permanently represent the parent company in Italy
- It is independent with respect to the way in which it organizes its activities in Italy
- It has the decision-making ability to maintain the business of its parent company in Italy
- It is taxed on its earnings at a corporate level.
Requirements and company Incorporation Steps in Italy
Considering the latest improvements associated with the legislation on opening companies in Italy, both entrepreneurs and investors benefit from several incentives when setting up businesses in this country. One of the important amendments pertains to the company incorporation timeframe which has been reduced to a few days from the previous several weeks.
The company incorporation process in Italy includes the following:
- Creating a business plan with the list of activities of the future entity.
- Collecting information about the founders.
- Opening a bank account for depositing the share capital amount required for the company.
- Arranging articles of association and memorandum of association
- Execute articles of association before a public notary
- Prepare company bylaws and their notarization by a public notary.
- Completing registration documents.
- Submission of the registration documents to the Chamber of Commerce (company registration in the Italian Business Register)
- Registration as a taxpayer and receiving a fiscal code and VAT number.
The registration of an Italian company is regulated by the Civil Code of Italy and applicable legislation.
If you want to register your company in Italy, contact your Damalion expert now.
