To open a company in Italy, you need to choose a business structure, register with the Italian Business Register, obtain a tax code, and meet minimum capital requirements. Both EU and non-EU citizens can establish businesses, though non-EU nationals may need additional visas and permits. Foreign entrepreneurs must obtain a personal tax code, known as Codice Fiscale (Italian Tax Code), to operate a business in Italy. Obtaining a personal tax identification number is essential for almost every legal or financial transaction in Italy. Foreigners can fully own an Italian company provided that their country grants similar rights to Italian nationals (principle of reciprocity).

The Italian government has streamlined business registration procedures in recent years to attract foreign investment. Understanding the key legal requirements and choosing the correct business entity will save you time and money during the incorporation process. Professional assistance can help navigate bureaucratic requirements more efficiently. The Single Business Communication system allows for a digital application process for business registration in Italy. The company incorporation procedure in Italy is primarily completed through a digital system called Single Business Communication (ComUnica). The process of starting a business in Italy requires familiarity with local tax laws and social security obligations.

Choosing a business structure

The most common business structures in Italy are sole proprietorships, partnerships, and limited liability companies. Limited liability companies, such as the simplified limited liability company (S.r.l.s), offer protection for personal assets and are popular among foreign investors. Joint stock companies require a minimum share capital of €50,000 and are suitable for larger businesses. An S.p.A. structure is optimal for large enterprises needing to raise significant capital, often through public offerings. The Simplified limited liability company (S.r.l.s.) was introduced to encourage young entrepreneurship with a minimum share capital of €1 up to €9,999. The minimum capital required to start a standard limited liability company (S.r.l.) is €10,000.

The choice of business structure depends on the business type, number of owners, and level of liability. Consider your long-term goals and growth plans when making this decision. Each structure has different tax implications and reporting requirements. Segnalazione Certificata di Inizio Attività (SCIA) must be filed with the local Chamber of Commerce.The length of time required to set up a business in Italy can vary depending on the business structure and efficiency of regulatory bodies.

Types of business entities

Sole trader or sole proprietorships are the simplest form of business entity, with the owner having unlimited personal liability. This structure works best for small businesses with minimal risk exposure. The owner reports business income on their personal tax return. A sole proprietorship (impresa individuale) is not a separate legal entity, and the owner bears full personal liability for business debts. 

Partnerships can be limited or unlimited, with the limited partnership offering some protection for personal assets. Limited companies, such as the S.r.l. and S.p.A., offer limited liability protection and are separate legal entities. A foreign parent company can establish a subsidiary, branch, or representative office in Italy. An S.a.s. partnership divides partners into general partners with unlimited liability and limited partners with restricted liability. A representative office in Italy can only engage in promotional and marketing activities, not commercial ones. In a general partnership, all partners are jointly and severally liable for the partnership’s debts. Partnerships in Italy (such as S.n.c. or S.a.s.) have tax personality but not separate legal personality; partners remain personally liable for debts.

Registration and incorporation

Company registration in Italy involves registering with the Italian Business Register and obtaining a Codice Fiscale (Italian tax code). The process generally takes 1–2 weeks for EU citizens, or slightly longer for non-EU nationals depending on document legalization.A notary public is required to authenticate the documents, and notary fees apply. The incorporation process typically takes around 5 to 10 working days if all documents are in order. The Articles of Association must be signed in front of a Notary Public to establish a corporation in Italy. The notarial deed is a legal document required to establish a limited liability company (S.r.l.) in Italy. In Italy, a public deed is necessary for the incorporation of most companies, including limited liability companies (S.r.l).

The new company must also register with the National Social Security Institute (INPS) and the Italian Revenue Agency. You’ll need to provide proof of address and identity documents. All foreign documents must be translated into Italian and apostilled. Entrepreneurs must be registered with social security institutions such as INPS for pensions and benefits. All businesses must fulfill social security obligations and register with the National Social Security Institute (INPS) if they have employees. Foreign ownership entrepreneurs are required to register with INPS for social security and INAIL for workplace accident insurance if they hire employees. Italian companies registered in Italy must pay contributions to the National Social Security Institute (INPS) based on their structure and the roles of their company directors.

Financial requirements

The minimum required share capital to establish a limited liability company in Italy is €1 for an S.r.l.s and €10,000 for an S.r.l. Joint stock companies require a minimum share capital of €50,000. Foreign investors must also consider the costs of registering a company, including notary fees and registration taxes. The minimum share capital requirement for a limited liability company (S.r.l.) is €10,000, with at least €2,500 to be paid at the time of incorporation.

A business bank account is required to deposit the minimum share capital and conduct financial transactions. You’ll need your company registration documents to open the account. Some banks may require additional documentation from foreign investors. Opening a corporate bank account in Italy is essential for conducting business and for depositing the initial share capital.

Licenses and permits

Certain business activities in Italy require licenses or permits, such as food service or tourism. The company must obtain a VAT number and register with the Italian Tax Authorities. Foreign companies must also comply with Italian law and regulations, including those related to employment and taxation.

A business visa may be required for non-EU citizens to establish a business in Italy. Check with the Italian consulate in your home country for specific requirements. Some business activities may require additional professional services or certifications.

Taxation and accounting

Companies in Italy are subject to corporate tax, VAT, and other taxes. The Italian Tax Agency requires companies to submit annual tax returns and pay taxes on time. Accounting records must be kept for at least 10 years, and companies must comply with Italian accounting standards.

Tax benefits may be available for new businesses or companies that invest in certain sectors. Consult with a local tax advisor to understand your obligations. Proper accounting software can help manage compliance requirements.

Visa requirements

Non-EU citizens may require a business visa or other types of Italian residence permit to establish a business in Italy. The visa application process typically takes 2-3 months and requires the submission of a business plan and other documents. The company must also register with the authorities and obtain a Codice Fiscale (Italian tax code).

A residence permit may be required for non-EU citizens to live and work in Italy. EU citizens can freely establish businesses without visa requirements. The self-employment visa is the most common option for business owners. The self-employment visa for non-EU citizens is typically valid for two years and can be renewed thereafter.

Foreign investment

Foreign investment in Italy is encouraged, and the country offers a range of incentives for foreign investors. Foreign companies can establish a subsidiary, branch, or representative office in Italy. The Italian government offers tax incentives and other benefits for companies that invest in certain sectors, making it attractive compared to other European countries.

Foreign investors must comply with Italian law and regulations, including those related to employment and taxation. Consider establishing relationships with local partners or advisors. Understanding Italian business culture will help ensure success. The company representative must ensure compliance with all local requirements and regulations.

Final thoughts on opening a company in Italy

Opening a company in Italy requires careful planning but offers significant opportunities for growth. Choose the right business structure based on your specific needs and goals. The registration process is manageable with proper preparation and professional assistance. Companies must obtain an Italian tax identification number during the registration process.

Italy’s strategic location and EU membership provide access to major European markets. Take advantage of available tax incentives and support programs for foreign investors. Success depends on understanding local regulations and building strong business relationships in Italy. IRAP, or the regional tax on productive activities, is calculated based on the net value of production and typically has a standard tax rate of 3.9% but may vary by region. The parent company structure may offer additional benefits for international businesses looking to expand into Italy.

Get professional legal assistance for your Italian business

Opening a company in Italy involves complex legal procedures and compliance requirements. Don’t navigate this process alone. Aprigliano International Law Firm specializes in helping international clients establish businesses in Italy with confidence and ease.

Our comprehensive corporate and commercial services include:

• Incorporation of Italian companies
• Commercial and corporate contracts in Italy
• Investments in Italy guidance
• Italian Economic Criminal Law

Contact Aprigliano International Law Firm today for personalized legal assistance with your Italian business venture. Our experienced team will ensure your company formation process is smooth, compliant, and tailored to your specific needs.