COMPANY INCORPORATION ITALY
Introduction to Italian Company Registration
One of the key players and largest economies in the European Union, Italy has recently taken new steps to position itself as a welcoming home for foreign investment. Compared to the recent past, it is becoming increasingly attractive to open companies in Italy for non-EU and EU residents. In fact, the time frame for the incorporation of a company (including obtaining VAT and opening a bank account) is around 5 working days from the day in which we start the incorporation procedure. Unlike other countries, in which the incorporation of a company might take only one day, in Italy the incorporation process takes a little longer but, at the end of it, no further steps are necessary. VAT number is obtained before the company is even incorporated and it only takes a couple of hours to open the bank account. In the UK, for example, a company is incorporated in one day, but it can take several weeks to obtain a VAT number and opening a bank account can be quite difficult for a foreigner.
If you are considering company incorporation in Italy, please contact us for further details today.
What are the main types of company formation in Italy?
There are four major kinds of Italian company registration for foreign investors, and they are as follows:
- Traditional limited liability company (SrL)
- Simplified limited liability company (Srls)
- Corporation (SpA)
What are the main features of a SrL?
- most popular format for small to medium businesses
- minimum share capital is €1
- accounts to be filed annually
What are the main features of a Srls?
- government taxes for the incorporation are lower
- share capital amount must be between €1 and €9,999
- shareholders must be individuals, not companies
- only the standard model articles of association by-laws provided by Italian law can be adopted
- accounts to be filed annually
What are the main features of a SpA Corporation?
- main format for medium to large companies
- minimum share capital is €50,000
- minimum number of directors is one
- need to appoint of board of statutory auditors composed by at least three auditors
- accounts to be filed with the Registrar of Companies
What are the main features of a branch?
- foreign parent responsible for all liabilities of Italian branch
- minimum of one legal representative required
- accounts to be maintained but no reporting requirements
Is it complicated to start a business in Italy?
Following recent reforms, opening an Italian company has become easier than in the past, the incorporation process takes a few more days (5 working days) than in some other European countries, but unlike most European jurisdictions VAT number and bank account for foreign owned companies can be obtained on the same day. The company incorporation formalities include the following:
- arrange articles of association and memorandum of association
- execute articles of association before a public notary
- obtain an Italian tax code
- open a local bank account
- register for VAT
- file with the Registrar of Companies
Italy is a very interesting destination for entrepreneurs and wealthy individuals that want to have free access to the EU. In the past few years it has become increasingly difficult for non-EU individuals (especially from certain jurisdictions in Asia and from India, Iran, Russia and the Middle-East) to obtain entry visas and residence permit in the EU.
We can offer our clients several ways to obtain a resident permit in Italy.
The main options to obtain an Italian long-term residence permit are:
- •Establish an Italian limited liability company owned by the client’s local company or an Italian branch or representative office of the local company; this would allow the client to apply for an infra-company transfer residence permit;
- •Establish an Italian company that meets the requirements to qualify as an innovative startup company with the commitment to invest at least 50,000 € in the company; this would allow the client to apply for an Italian start-up residence permit;
- •Establish an Italian company and apply for the European Blue Card as a ‘highly qualified’ worker with at least a three-year university degree that certifies a specialized qualification recognized in Italy.
Furthermore, the Italian government has recently introduced a specific discipline within immigration law, the so-called “Investors Visa”. The new Investors visa allows the entry and residence in Italy, notwithstanding the entry quotas established annually by the government, to foreigners who wish to:
- •invest at least € 2 million in securities issued by the Italian government, to be held for at least 2 years;
- •invest at least € 1 million in equity instruments of a company incorporated and operating in Italy, to be held for at least 2 years;
- •invest at least € 500.000 into an existing Italian innovative start-up company;
- •make a philanthropic donation of at least € 1 million to support a public interest project, in the fields of culture, education, immigration management, scientific research, recovery of cultural and landscape assets.
How easy is it to recruit staff in Italy?
As a rule, it is easier to recruit staff in the underdeveloped south, where unemployment is high, compared to the wealthier north of the country. Recruitment agencies for permanent and temporary staff abound, however, and the workforce is generally of a high caliber. Labor laws strongly favor the employee and it is essential to take advice before entering into a contractual arrangement – we have a network of local experts who will be happy to help you on this point if you are considering company formation Italy.
What is the regulatory environment like for those considering company incorporation Italy?
Much more liberal than it used to be. Capital and dividends can be freely repatriated in line with EU rules and Italy has a number of double taxation treaties. Foreign ownership is permitted in all industries except for defense-related areas such as aviation and shipping. Certain restrictions apply in the telecommunications sector.
A fast and comprehensive reform strategy is in place to build a more friendly business climate, simplifying and adapting bureaucracy, improving education and justice. Many of these reforms are making Italy a more attractive economy to invest in, such as new labour legislation, more flexibility to conclude tax agreements with the tax authorities, simplified procedures to access and exploit oil and gas resources, new financial tools for Real Estate, dedicated business courts to resolve disputes involving foreign investors.
Are there financial incentives available?
Tax credit schemes support companies to improve their competitiveness: 25% tax credit for private investments in R&D (50% for projects with universities or research centres), 15% tax credit for investments in machinery and capital goods. Employing researchers in technical and scientific fields also attracts tax credits. Further public incentives support new investments in manufacturing and R&D, especially in southern Regions.
The Italian Government has recently implemented a new legislation package to favor the setting up and development of innovative start-ups by foreign investors. This includes the introduction of significant benefits in areas such as immigration, tax, labour, company law, access to bank loans etc.
And what about banking facilities?
Italy is one of Europe's foremost financial capitals and banking facilities across Italy are generally good. We will be happy to help you to open a bank account in Italy.
How can I get more information on company incorporation Italy?
EuroCompanyFormations.com Italian company registration service makes it easy for you to start a business in Italy, so please contact us for further details.