Italy in one of the key actors of European economy, and has recently taken measures to position itself as a welcoming home foreign investments for EU and non-EU residents. Company incorporation may be a longer process than in other country, but demonstrates an added value in efficiency of process (VAT number is obtained before the company is even incorporated and it only takes a couple of hours to open the bank account).

What are the most common types of company 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)
  • Branches

Main features of a SrL

  • most popular format for small to medium businesses
  • minimum share capital is €1
  • accounts to be filed annually

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

Residency in Italy

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.

Recruitment environment

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 standards.

Regulatory environment

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 defence-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 friendlier 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.

Financial incentives

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.

Filing requirements

An Italian Srl is required to file an annual return and maintain a register of officers and accounts. Small companies do not need to be audited.

Please contact us and we will be pleased to discuss matters in greater detail.