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Company Incorporation in Italy

Expanding your business to Italy comes with many benefits. As a member of the European Union (EU), your company will have access to the entire Eurozone. The country also has a strategic location; neighboring the Mediterranean Sea which gives it access to North Africa and the Middle East, also very lucrative markets.

 Adding to that, Italy’s government offers several tax incentives and credits that benefit foreign direct investments. Finally, Italy is considered one of the largest manufacturing countries within Europe. By setting up shop in the country, you will have access to the robust manufacturing resources that Italy has to offer.

 Read on to learn more about the types of business entities in Italy and how you can incorporate your company.

 

Types of Business Entities in Italy

 

Sole Proprietorship

 A sole proprietorship is the simplest form of company that is available to single business owners. This structure has the lowest amount of requirements, and there is no minimum capital requirements. The only condition for a sole proprietorship is that the company’s name has to include the business owner’s name. You can also register your business name with Italy’s intellectual property office as an additional measure for added security.

 The main benefit of a sole proprietorship is that the business owner is the sole beneficiary of the company’s income. Furthermore, the business owner will only be taxed once. They only need to pay for their personal income tax.

 Its primary disadvantage is that the business owner is liable for all the debts and damages incurred by the company.

 

General Partnership or Società in nome collettivo (S.n.c.)

 

An S.n.c is similar to a sole proprietorship regarding the minimum requirements needed to establish the business structure. There are no minimum capital requirements. You only need a partnership agreement with at least two partners and a company name to establish a general partnership.

The partners will have complete control over the direction and management of the company. Like a sole proprietorship, an s.n.c. has unlimited liability. This means that partners will be personally liable for any debts and damages incurred by the business.

 

Limited Partnership or Società in accomandita semplice (S.a.s.)

 

A limited partnership has the same requirements as a general partnership. The thing that differentiates the two entities is that an S.a.s. features two different types of partners: a general partner and a limited partner.

The general partner is the person who dictates the general management and direction of the company. On the other hand, limited partners will effectively just be shareholders who act as an investor in the business.

The general partner will receive unlimited liability, while limited partners will only be liable for the amount of money they invested into the company.

 

Limited Liability Company or Società a responsabilità limitata or (S.r.l.)

 

The limited liability company is the most common and popular business entity for small and medium businesses in Italy. An S.r.l. is required by Italian law to have a minimum capital investment of €10,000.

There is also a simplified S.r.l. which has less stringent requirements. For a simplified S.r.l., shareholders need to be individuals and cannot be other companies. Its initial share capital cannot exceed €10,000. Finally, simplified S.r.l.s can only use standard articles of incorporation, which cannot have amendments.

The company must have at least one shareholder and one director. Neither the shareholder nor director needs to be residents of Italy. However, the company needs to have a registered address in Italy, and it must obtain a certified email address. The director of the company also needs to obtain a tax identification number (Codice fiscale).

The primary advantage of a limited liability company is that the shareholders are liable only to the amount they invested into the company.

 

Joint Stock Company/Public Limited Liability Company or Società per azioni (S.p.a.)

 

This form of business entity is most appropriate for larger companies. An S.p.a. must have at least one director and requires a minimum capital of €120,000. Shareholders must have a minimum share capital of €50,000.

In a joint-stock company, the board of directors will decide the day-to-day activities and general direction of the business. This entity is the only business entity in Italy that can be listed on the stock exchange.

Much like a limited liability company, an S.p.a. benefits from limited liability wherein shareholders are liable only to the amount of their investment.   

 

Process of Incorporating a Company in Italy

 

Check out the general process of registering a business in Italy below. Take note that depending on the type of business entity you want to set up, you may have to submit other documents.

  1. Establish the articles of incorporation and the memorandum of association.
  2. Execute the articles of incorporation with a registered public notary as a witness.
  3. Obtain and activate an official company email address.
  4. Open an official company bank account and deposit at least 25% of the company’s capital.
  5. Submit the notarized articles of incorporation to the Register of Enterprises, who will then issue the company registration number.
  6. Acquire VAT, tax identification number (Codice fiscale), and accounting books from the Italian Tax Revenue Agency.
  7. Register the company with the Istituto Nazionale della Previdenza Sociale (INPS).
  8. Notify the local municipal office that the business has started operations
  9. Register employees with the Provincial Labor Office.

 Looking for further information, director or assistance? Reach out to the experts at INS Global today.

 

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