STEPS FOR COMPANY FORMATION IN ITALY
1) Upon deciding to form a company in Italy, the client must provide a name for the future company and also details on the shareholding structure. The registration of an Italian company requires every shareholder and director to obtain a codice fiscale which is an absolutely mandatory identification number. Additionally, for company registration purposes and also in order to approach the bank with an application for the share capital account, the client will be required to provide all relevant identification information (such as passport copy, utility bill and other relevant documents depending on the shareholding structure; for instance, should the shareholder of the Italian company be a legal entity, then an original certificate of good standing/incorporation of the parent company notarized with apostille and translated into Italian will be required. Nevertheless this list is not guaranteed to be complete as requirements could be subject to certain changes).
2) Once the respective codice fiscale has been obtained for each shareholder and director, the original documents will be submitted with the relevant authorities. The following step for the incorporation of a company in Italy will be signing the required documents in front of an Italian Public Notary. This can either be done in person or through a Power of Attorney if the shareholders will not travel to Italy.
3) The final step is to register the company with the Trade Register and to obtain Tax ID. Once all the company formation related documents have properly notarized as per the Italian legislation, they will be filed with the Trade Register for approval. After registration is completed the administrator of the company must notify the Labor Office about hiring employees, if that is the case. The procedure is rapidly completed, as the notification can be sent via e-mail.
REQUIREMENTS FOR COMPANY FORMATION IN ITALY
- the director/s of an Italian company should be EU citizen/s or EU resident/s;
- the shareholders of a company registered in Italy can be both natural persons or legal entities;
- a company in Italy must hold a local registered office (service provided by BridgeWest)
- the registration of a SRL (Limited Company) requires the injection of a share capital amounting to 10,000 EUR. However, should the future Italian company have two shareholders, then 25% of the share capital must be injected.
SERVICES PROVIDED FOR COMPANY INCORPORATION IN ITALY
> Preparing the Articles of Association of your company;
> drafting all other documents required for the registration of the Italian Company;
> arranging Public Notary meeting and procedures (The procedures for establishing a company in Italy have to be performed by an Italian Public Notary);
> providing a Registered Office in Italy for your company (if required);
> Opening a Bank Account and providing the necessary forms and documents for the setup of a bank account
> Accounting and Payroll Services in Italy;
Accountancy services are recommended for any new business establishment in Italy.
> Setting up a Società a Responsabilità Limitata (S.R.L.- Limited Liability company)
A limited liability company in Italy is known as a Societa a Responsabilita Limitata or SRL. This type of company is usually intended to meet the needs of a small business. Due to the company law reform, limited liability companies in Italy became rather flexible and easy to run. This is why this type of company is quite popular among foreign investors who decide to set up a business in Italy.
The initial share capital for a limited liability company in Italy must be at least 10,000 EUR. At least a quarter of the cash contribution must be deposited in a bank account prior to the company’s incorporation. If the company has only one owner, then the initial capital must be paid in full before incorporation. Contributions in kind are also accepted, but they must be valued by a register auditor. The capital is divided into quotas which can be freely transferred unless otherwise specified in the articles of association.
A limited liability company in Italy must have at least one shareholder. If there are more founders, each of them holds quotas according to their initial contribution. Quotas are a variable percentage of the company’s capital.
Management power in an Italian limited liability company can be granted to a sole director, a board of directors or to more than one director acting with independent powers. The company’s articles of association can mention the maximum number of directors. Some resolutions may be taken by only signing a written document without having to organize a formal meeting, while some decisions must be taken in a formal partners’ meeting.
A board of statutory auditors must be appointed in a limited liability company in Italy. Accounting records must be kept on all transactions undertaken by the company, as well as a complete list of balances and financial statements.
> Establishing a Società per Azioni (S.p.A. - Joint Stock Company)
Joint stock corporations in Italy are known as Societa per azioni or SpA. The capital can be divided into several types of shares, such as related shares, redeemable shares, shares with limiting voting rights or shares offered to employees. The company law reform brought some changes in the governance and organisation of a joint stock corporation in Italy.
The minimum share capital required for the incorporation of a joint stock company in Italy is 120,000 EUR. This amount must be fully subscribed prior to incorporation, but only a quarter must be paid up. The initial capital has to be paid in full only of there is only one shareholder. The capital of a joint stock corporation in Italy is represented by shares which can be embodied in share certificates. Shares are indivisible and they can be given a nominal value. Contributions can also be made in kind, provided that they are valued by a registered auditor.
There has to be at least one shareholder in order to establish a joint stock corporation in Italy. Ordinary and extraordinary meetings can be organized by shareholders. An ordinary meeting of the shareholders of a joint stock company in Italy has to be held at least once a year to approve the financial statements, no later than 120 days after the accounting reference date.
There are three types of management structure in an Italian joint stock company. The traditional system in Italy consists of a sole director or a board of directors appointed in the shareholders’ meeting. The dualistic system requires the election of a supervisory committee that appoints a management board. Under the monistic system of management in a joint stock company in Italy, the board of directors is in charge with the management of the company.
A board of statutory auditors appointed by the shareholders is responsible with the accounting supervision of a joint stock company in Italy. In the dualistic system, a supervisory committee is elected by the shareholders and, at the same time, an external accounting supervisory body can be appointed. An audit committee is in charge of controlling a joint stock company’s organization, administration and accounting under a monistic system.
The incorporation of a joint stock company in Italy must take place in front of a public notary. The Civil Code in Italy states that some information must be provided for incorporation, such as names and addresses of shareholders, the company’s name, registered office, activity of the company, the company’s capital and number of shares and the model of governance. The name of a joint stock company in Italy must include the words “societa per azioni”.
> Italian Branch, Subsidiary or Representative Office-Any foreign company is able to set up branch entities in Italy. These can be set up as separate entities from the parent company in Italy companies having the foreign company as shareholder) or extensions of the parent-company in Italy.
ITALY KEY FACTS
> The standard VAT rate in Italy is 20% and it is charged on assets and services in Italy as well as on imports. However the VAT rate is reduced at 4% and 10% on basic products.
> Italian Tax Law requires companies and individual entrepreneurs to pay a 27% corporate tax.
> The Italian Capital Gain Tax, or dividend tax is 12, 5%, however the dividend tax can be reduced depending on the percentage owned in the share capital of the company.
> Overall, Italy provides an attractive business environment.
BridgeWest is also able to offer ready-made Italian companies and VAT registration.
Please contact us for more information and prices.
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Call us now at +44 203 287 0408 to set up an appointment with our lawyers and accountants in Milan and Rome, Italy. Alternatively you can incorporate your company without traveling to Italy.
As a BridgeWest client, you will beneficiate from the joint expertize of local lawyers and international consultants. Together we will be able to offer you the specialized help you require for your business start-up in Italy.