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Establishing a Company in Italy

Italy offers an attractive investment environment for many entrepreneurs due to its strong market within the European Union, strategic geographic location, and economic diversity. Establishing a company in Italy is one of the most effective ways for investors of all scales seeking to enter the European market and expand their commercial activities into Europe. This article outlines the procedures, advantages, and key considerations relating to company formation in Italy.

Types of Companies That May Be Established in Italy

  • Limited Liability Company (S.r.l.): This is the most commonly preferred company form. Shareholders’ liability is limited to their respective capital contributions. This structure is largely similar to the Turkish limited liability company. It may be incorporated and managed relatively easily and may be established by a single shareholder. The number of shareholders is limited, making the S.r.l. suitable for small and medium-sized enterprises. A board of directors is not mandatory; one or more managers may be appointed.
  • Joint-Stock Company (S.p.A.): This structure corresponds to the Turkish joint-stock company and is suitable for large-scale investments or companies planning a public offering. A higher minimum capital is required for incorporation. Shareholders are liable only up to the amount of their capital contributions. Shares may be freely transferred, and the number of shareholders may be high. The establishment of a board of directors, an audit body, and a general assembly is mandatory. The S.p.A. is ideal for high-capital companies, investment funds, group companies, and entities targeting a future IPO.
  • Simple Partnership (S.s.): Used for non-commercial activities (e.g., agriculture). This is a partnership formed by two or more individuals without creating a separate legal entity. Partners are personally liable for the partnership’s obligations. It is generally preferred for family businesses or small agricultural operations. Registration with the commercial registry is not mandatory, although tax obligations may arise. Advantages include quick establishment, low cost, and minimal administrative requirements.
  • Branch Office: This structure enables an existing foreign company to open a branch in Italy without creating a separate legal entity. The branch operates under the authority of the parent company. Although the branch receives its own tax number, all liabilities ultimately remain with the parent company. A local representative residing in Italy or otherwise holding legal representation authority must be appointed. A branch is particularly suitable for foreign companies seeking to establish an office, warehouse, representative office, or marketing unit in Italy at a lower cost.

Each company type entails different incorporation procedures, minimum capital requirements, and governance structures; therefore, the appropriate model should be chosen based on the nature and scale of the planned activity.

Advantages of Establishing a Company in Italy

  • Access to the EU Market: Companies established in Italy benefit from the right to free movement within the European Union. This enables the distribution of goods and services across all EU member states without customs duties or commercial restrictions. Compliance with EU regulations also provides international credibility and competitive advantage.
  • Tax Incentives: Italy offers various tax reductions and incentive programs, particularly for investments in southern regions. These include corporate tax reductions, investment credits, and regional grants. Additional incentive packages are available for strategic sectors such as digital technologies, green energy, agricultural technologies, and R&D.
  • High Quality of Life and Logistics Infrastructure: Italy offers modern infrastructure, major seaports (e.g., Trieste, Genoa), and an advanced high-speed railway network, enabling efficient import and export operations. Its Mediterranean coastline enhances access to maritime trade and reduces logistics costs. The high quality of life also helps attract skilled professionals and international experts.
  • Policies Supporting Foreign Entrepreneurs: Recent regulatory reforms facilitate the entry and establishment of foreign investors. The “Startup Visa” program provides streamlined residency permits and fast-track company incorporation procedures for innovative, technology-oriented entrepreneurs. Reduced bureaucracy and expanded online processes further enhance accessibility.

Cost of Establishing a Company in Italy

The total cost varies depending on the chosen company type (e.g., S.r.l. or S.p.A.) and the region of operation. As of 2025, typical cost components include:

1. Notarial and Registration Fees

Fees for preparation of the articles of association, execution before a notary, and registration with the commercial registry.

2.  Accounting and Consultancy Fee

Fees for legal and financial advisory services during incorporation, establishing an accounting system, and preparing initial declarations.

3. Minimum Capital Requirements

  • S.r.l. (Limited Liability Company):
    • Legal minimum: EUR 1

However, in practice banks and commercial partners generally require significantly higher capital.

  • S.p.A. (Joint-Stock Company)
    • Minimum legal capital: EUR 50,000
    • At least 25% must be paid in cash at incorporation.

4. Tax Office and Chamber of Commerce Charges

  • Chamber of Commerce registration fee
  • Tax Identification Number issuance
  • VAT registration, which entails monthly accounting and reporting costs

Required Documents for Company Formation in Italy

Founders must prepare the following documents:

  • Passport and identification information of all shareholders (with notarized Italian translation and apostille for foreigners)
  • Proof of residence (required in certain cases)
  • Incorporation deed and articles of association
  • Registered company address in Italy (physical or virtual)
  • Tax identification number
  • Documents signed before an Italian notary

For foreign corporate shareholders: Parent company registry extract and most recent financial statement (translated into Italian and apostilled)

In certain procedures, representation through a lawyer or commercial consultant is possible.

Frequently Asked Questions About Setting Up a Company in Italy

Is Physical Presence in Italy Required to Establish a Company?

No. Incorporation may be completed remotely through a representative acting under a power of attorney. However, certain processes—such as opening a bank account or executing specific documents—may require a short visit. Local authorities may also request verification of identity or signatures.

Does Establishing a Company in Italy Lead to Citizenship?

Establishing a company does not automatically grant citizenship. However, company owners may obtain a residence permit as “autonomo” (self-employed). This permit allows lawful residence and work in Italy. With continued residence and compliance with conditions—such as achieving at least B1-level Italian proficiency—an application for citizenship may be submitted after the legally required residence period.

How Long Does it Take to Establish a Company in Italy?

The timeframe depends on the company type and business activity. It generally includes preparing the incorporation deed, notarial procedures, registry entry, tax office notifications, and other formal requirements. Delays may occur due to incomplete documentation, bank account opening procedures, or regional administrative differences.

How Can an Existing Company Open a Branch in Italy?

The parent company’s registry documents, articles of association, and other corporate records must be translated into Italian and notarized. A legal representative must be appointed in Italy. The branch receives its own tax number, complies with local tax obligations, and is registered with the Chamber of Commerce and tax authorities. The branch remains legally dependent on the parent entity.

If you intend to establish a company in Italy, it is crucial to properly assess all legal aspects. Choosing the appropriate structure, preparing the necessary documentation, and ensuring compliance with legal requirements will help safeguard your investment. For further information and legal advice, please feel free to contact us.