Setting up a company in Italy
Here is our comprehensive guide to setting up a company in Italy for foreign businesses and individuals. We will look at who can set up a company in Italy, how to set register your company in Italy, the types of company, and principal options open to you.
Company, branch, or representative office?
Foreign investors (companies or individuals) can set up a business activity in Italy by:
Establishing a company in Italy (mainly a società a responsabilità limitata or a società per azioni);
Establishing a branch of a foreign company in Italy (sede secondaria);
Opening a representative office of a foreign company in Italy (ufficio di rappresentanza).
Who can set up a company in Italy?
In principle, foreign investors (legal persons or individuals) wishing to start up a new business in Italy may operate subject to conditions of treatment reciprocity, i.e. when a similar right is granted to Italian investors operating in the State of origin of the concerned foreign investor. Verification of such treatment reciprocity prior to starting a business in Italy is not necessary whereby the foreign investor:
- is a citizen of a Member State of the European Union;
- is a citizen of one of the States of the European Economic Area (i.e. Iceland, Liechtenstein and Norway);
- is a citizen of a country holding a specific international agreement with Italy – i.e. agreement governing international investment, treaty of friendship and trade, or other such agreements; please note that most of the jurisdictions have such agreements with Italy
- has – as individual – refugee or stateless person status.
In order to verify whether the required reciprocity conditions are actually met, see the individual “Country Reports” issued by Italy’s Ministry of Foreign Affairs (MAE). For the official list of treaties held with Italy, see the online database published by MAE.
Main types of companies
Italy offers a wide range of legal forms for setting up companies depending on the company’s organization model, its business objectives, the level of capital to be committed, the extent of liability of the founders as well as tax and accounting implications. Italy’s corporate law primarily differentiates between Corporations and Partnerships.
Limited liability companies
- legal personality, autonomous from company owners’ personality;
- limited liability for the company owners, i.e. each owner’s liability is limited to the cash or assets he/she has contributed to the company;
- separation of ownership and managing powers; hence the owners of the company are not necessarily also the directors of the company, and directors are not necessarily company owners;
- Ownership as freely transferable either inter vivos or mortis causa.
Partnerships (società in nome collettivo or S.n.c. and società in accomandita semplice or S.a.s.) are generally characterized by:
- unlimited joint and several liability of the partners for the company’s obligations;
- each partner acts as a director of the company with managing powers;
- non-transferability, either inter vivos or mortis causa of the partner status except whereby authorized by all other partners.
- Tax transparency
To open an Italian company, the founder(s) shall execute the Memorandum and Articles of Association (By-Laws) before an Italian public notary. The incorporation process can be carried out by distance through a power of attorney granted to our firm. However, the power of attorney shall be notarised and apostilled or (or notarized and legalized with a local Italian Embassy or Consulate if the country where the power of attorney is executed is not a member of the apostille convention.
Innovative start-up companies
The Italian Government has recently implemented a special legislation package to favor the creation and development of startups in Italy providing one of the most favorable and innovative legislation in the world for start-up companies. To establish an innovative startup company there is no need of authentication of the incorporation deed by a public notary.
See here for the benefits and requirements of creating an Innovative Startup in Italy.