Italy is not only a country with rich cultural and historic heritage, it is also one that has a top economy and market. Foreign investments are encouraged and even favored in Italy where foreign entrepreneurs enjoy the same rights as local investors. Key business sectors in Italy include tourism, food industry and real estate.
Investors who wish to know how to open a company in Italy can follow this guide along with our recommendations. Company formation in Italy is a process that has several steps and, in most cases, entrepreneurs will be able to start their business activities within one working week.
Types of Companies in Italy
Investors who open a company in Italy should first choose a business field in which they will invest and then, based on budget and business plan, choose a suitable form of business entity. In Italy there are several types of companies that have unique characteristics and are suitable for small, medium or large businesses.
The limited liability company is usually adopted by those investors wishing to open a small to medium-size company. Those who prefer a business structure suited for larger companies choose the joint stock company. Foreign corporations can establish their presence in Italy through a representative office (although this business structure has certain limits) or by opening a branch which will not have a distinct identity from that of the foreign company.
Individuals who are planning to start a business on their own can choose to incorporate the simplest business form, the sole trader. However, unlike the limited liability company or the joint stock company, this will not have legal capacity and the assets of the founder will be directly linked to those of the business. It is worthwhile to consider these particularities when choosing a suitable business form.
Steps for Company Formation in Italy
To set up two of the most common business forms in Italy, the S.p.A (joint stock company) and the S.r.L. (limited liability company), investors will need to first draw up the Articles of Association. Having a unique company name is important and a precondition for registering the company. These two business forms have special requirements for a minimum share capital.
Summarized, these are the main steps for company formation in Italy:
- choose an available company name;
- open a corporate bank account;
- draw up the deeds of incorporation before a public notary;
- register the company with the Business Register (Registro Imprese);
- register the company with the Tax Office and for VAT purposes;
- register the company for social security purposes (when hiring employees);
- obtain any other sector or activity-specific special permits and licenses for the company.
Corporate compliance for companies in Italy
All companies in Italy are subject to corporate income tax on their profits. Other taxes for companies include the withholding tax, the value added tax, the social security contributions, regional taxes on productive activities, stamp duty and a transaction tax. As far as administrative procedures are concerned, companies in Italy are required to file annual corporate income tax returns and observe the requirements for advance payments for the corporate income tax, twice a year.
With its favorable position in Europe, foreign investment opportunities and a friendly foreign investment policy, Italy can be considered one of the top choices for investments in Europe. Investors who wish to open a company in Italy can explore the main business fields and look for various opportunities in a country known for its way of life and taste for quality.