Incorporation of an italian company

Aprigliano provides assistance with the incorporation and sale-purchase of shareholdings (shares/equities) of the following categories of company:

• SRL
• S.P.A.
• S.A.P.A.
• REPRESENTATIVE OFFICE OF FOREIGN COMPANY
• INNOVATIVE START-UP (in the form of S.R.L./S.P.A./S.A.P.A.)

The Italian Law provides for two categories of company: partnerships and capital companies.

Partnerships do not require the payment of a minimum share capital and do not have legal personality. Therefore, members are liable for corporate debts with their private assets. Partnerships are the following: ordinary partnership (società semplice, S.S.), general partnership (società in nome collettivo – S.N.C.) and limited partnership (società in accomandita semplice – S.A.S.). As a general rule, non-EU nationals planning on becoming members of Italian partnerships must hold an Italian residence permit.

Capital companies, on the contrary, require the payment of a minimum share capital, whose amount depends on the chosen company type, and have legal personality. Therefore, the members are not liable for corporate debts with their private assets. Capital companies are the following: joint-stock company (società per azioni – S.P.A.), limited joint-stock company (società in accomandita per azioni – S.A.P.A.); limited liability company (società a responsabilità limitata – S.R.L.), simplified limited liability company (società a responsabilità limitata semplificata – S.R.L.S.).

Members
Non-EU nationals from specific countries are allowed to become members of Italian capital companies, even in the event they do not hold an Italian residence permit. For such purpose, assessments regarding whether Italy has signed any bilateral agreements concerning investment promotion with the foreign nationals’ countries of origin, must be performed on a case by case basis. Although subject to exceptions, a capital company can be made up of foreign members (natural persons and companies). The presence of Italian members or shareholders is not required.

Share capital
All capital companies must have the registered capital provided for by Law: € 50.000,00 for S.P.A./S.A.P.A., € 10.000,00 for S.R.L. and € 1 for le S.R.L.S. Upon incorporation of the company, at least 25% of the registered capital must be paid. The Law does not provide for a deadline by which the remaining amount shall be paid. The paid share capital can be used by the company for the purposes of its financial activities (registration charges and fees, legal fees, supplies, etc).

Management body
Capital companies can be managed by a board of directors or by a sole manager. Members of the BoD (or the sole manager) can be members of the company or third parties. Members of the BoD can be Italian or foreign nationals. The presence of Italian nationals in the BoD is not required.

Memorandum of association
The memorandum of association is the document regulating the company’s activity. It also provides which decisions are supposed to be the responsibility of the members, and which can be delegated to the management body.

Incorporation
With a few exceptions (innovative start-ups), companies are incorporated by means of public instrument before an Italian notary. Founding members can appear in person before an Italian notary for the purpose of incorporating a company or provide an agent with authorization to incorporate the company in their own interest. In this latter case, a special power of attorney is required. Said PoA shall be authenticated by an Italian notary if the member is located in Italy or signed before a foreign Notary and then translated and legalized. The incorporation of a company requires 7-10 working days.

Taxation
Corporate tax: Currently, the corporate income tax (imposta sul reddito delle società-IRES) rate is 24%, plus an additional tax (IRAP), whose rate varies depending on the region where the company is located and on the activity performed (ranging from 4,82% to 3,90%, with a few exceptions).

Dividend tax: Dividend taxes may differ depending on whether the member is a natural person or a capital company.

• Natural person: the corporate dividend tax rate amounts to 26%
• Legal person (capital company): the taxation rate amounts to 1,2% (ordinary taxation applies to 5% of the dividend purchased)

Innovative start-ups are companies incorporated in the form of capital companies (S.P.A., S.R.L., S.A.P.A.) whose main activities are production, development and marketing of high-technology and innovative services or products. The Italian Law provides that, in the event the innovative start-up meets specific requirements, (no distribution of profits for a minimum of 3 years, investment amounting to at least 15% in research and development, etc.) it can make use of important incentives, including:

• 40% tax credit (IRPEF) to investors (natural persons); 40% IRES to legal persons (IRES credit is increased to 50% to legal persons purchasing the whole equity participation (100% shares/equities)
• Facilitated residence permit procedure for foreign investors (see start-up visa and investor visa)
• Access to tax concessions for the purchase of software and machinery
• Tax credit for costs related to research and development
• Crowdfunding: opportunity of raising funds through authorized online platforms

5 years after the incorporation, the company’s “innovative start-up” status ceases, and it is entered in the ordinary section of the business register. If the necessary requirements are met, it can apply for registration into a special section of the business register dedicated to companies performing high-technology activities (Innovative SMEs). Many start-up specific concessions apply to innovative SMEs as well.