Italy

SETTING UP IN BUSINESS

Introduction

Still battling to shake off its reputation as an economic slow starter, Italy has recently taken new steps to position itself as a welcoming home for foreign investment. The result is that Italy is slowly emerging as a land of opportunity, although you will need specialist local advice to help navigate your way through the bureaucracy. We are experts at this.

What are the main types of company in Italy?

There are three major kinds of business entity for foreign investors, and they are as follows:

• limited liability company (SrL)
• joint stock company (SpA)
• branches

What are the main features of a SrL?

• most popular format for small to medium businesses
• minimum share capital is €10,000
• no restrictions on foreign shareholders
• audited accounts to be filed annually

What is the minimum number of directors of a SrL?

It is best to have a minimum of two. In fact it is possible to set up a SrL with just one director, but in such cases the company has to have words ‘Società Uninominale’ in its title, otherwise liability is unlimited.

What are the main features of a SpA joint stock company?

• main format for medium to large companies
• minimum share capital is €120,000
• minimum number of directors is one
• no restrictions on foreign shareholders
• audited accounts to be filed with the Registrar of Companies

What are the main features of a branch?

• foreign parent responsible for all liabilities of Italian branch
• minimum of one director required
• accounts to be maintained but no reporting requirements

Is it complicated to set up a company in Italy?

More so than in some other European countries, but like anything else, it is a matter of mastering the procedure. The formalities include the following:

• arrange articles of association and memorandum of association
• executive articles of association before a public notary
• obtain an Italian tax code and identity document
• open a local bank account
• register for VAT
• file with the Registrar of Companies
• secure approval by a local tribunal

We are experts in this process, so please contact us to help you every step of the way.

How easy is it to recruit staff in Italy?

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 caliber. Labor laws strongly favor the employee and it is essential to take advice before entering into a contractual arrangement – we have a network of local experts who will be happy to help you on this point.

What is the regulatory environment like?

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. However, public authorities are weighed down with bureaucracy and the legal system is slow. Foreign ownership is permitted in all industries except for defense-related areas such as aviation and shipping. Certain restrictions apply in the telecommunications sector.

Are there financial incentives available?

Italy offers a variety of incentives for foreign and local investors alike. These include:

• corporation and local tax breaks for ten years in areas of high unemployment
• research and development grants covering up to 50% of total R&D costs
• low-interest loans for enterprises that encourage exports of Italian goods

And what about banking facilities?

Milan is one of Europe’s foremost financial capitals and banking facilities across Italy are generally good. Efforts are underway to rationalize the many hundreds of independent local banks and facilities are expected to improve further once this process is complete. We will be happy to help you to open a bank account in Italy.