Business entities in Italy in 2023

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There are several ways to start a business in Italy, the most common being through the setup of a limited liability company (locally known as an SRL). Alternatively, foreign companies can also setup a branch office in Italy, or a representative office if they do not plan to conduct any profit-making activities or commercial operations within the country. Below is a summary of the business forms available for foreign companies in Italy.

The Limited Liability Company (SRL)

Setup LLC in Italy

  • It is possible to open an Italian company with only i) one shareholder, contributing a minimum paid-up capital of €1 and ii) one director, who does not need to be an EU citizen or resident to complete the process;
  • Legal entities in Italy are required to submit i) an annual tax return to the Italy Revenue Agency and ii) the annual financial statements. Audit of the latter is not required if the company meets two of the following three criteria: i) turnover below 8.8 million ii) assets below 4.4 million and iii) less than 50 employees;
  • Best uses for an Italian LLC: The SRL company incorporation process in Italy is commonly used to setup an SME.

The Public-Limited Company (SpA)

  • Setup of a public limited company in Italy requires i) a minimum paid-up capital of €50,000 and ii) the appointment of a) one director and b) one auditor. Only the latter is required to be resident in Italy. It is also customary (but not legally required) to appoint a Board of Administrators, to ensure the director(s) is acting in the best interest of the shareholders;
  • Best uses for an Italian public limited company: Public limited company registration in Italy is recommended when the promoters intend to seek significant capital amounts from third party investors or list the company on a stock exchange, such as the Borsa Italiana.

The Free Zone Company

  • Foreign businessmen willing to use Italy as a hub for the shipping of products outside of the European Union frequently register their business in the free port of Trieste. The free zone offers profitable investment opportunities in Italy;
  • Transactions conducted in the Italy tax free zone benefit from i) exemption from VAT for non-EU goods in transit ii) deferred VAT payment on merchandise imported into the EU;
  • Goods can be imported tax-free into Italy if they are intermediate goods to be used in the production of export products;
  • Best uses for an Italian free zone company: The free trade zone (FTZ) is an ideal location for businesses involved in international trading.

The Branch Office (Filiale)

  • Foreign companies looking for a business opportunity in Italy can register a branch of their entity, instead of setting up a local subsidiary. Such a branch office must have i) an independent management team, including at least one country representative who must be ordinarily residing in Italy and ii) a corporate bank account based in (if necessary);
  • Best uses for an Italian branch office: the main advantage of branch registration in Italy is the ability for the head office to prepare only one set of financial statements. However, the head office also has unlimited liability against any debt or loss of the branch office.

The Representative Office (Ufficio di Rappresentanza)

  • Representative offices are legally allowed to only engage in i) market research and ii) promotion of the business of their foreign head office;
  • Best uses for an Italian representative office: first time venture into the market, before the registration of a subsidiaries in Italy.

Table of comparison between Italy entities

LLCFree zone companyPLCBranchRep office
Locally known as?SRLFree zone companySPASuccursaleUfficio di rappresentanza
Operations and logistics
Doing business in Italy permitted?YesYesYesYesNo
Allowed to sign contracts with local Clients?YesYesYesYesNo
Allowed to invoice local Clients?YesYesYesYesNo
Allowed to import raw materials?YesYesYesYesYes
Allowed to export goods?YesYesYesYesNo
Accounting and tax
Corporate tax rate?Yes, 24%Yes, 24%Yes, 24%Yes, 24%Not allowed
Statutory audit requiredNoNoYesNoNo
Annual tax return to be submitted?YesYesYesYesYes
Access to DTAAs?YesYesYesYesNo
Company law
Issued share capital required?€1€1€50,000NoneNone
Resident director/representative required?NoNoNoYesYes
Italian shareholder required?NoNoNoNoNo
Minimum number of directors?11111
Minimum number of shareholders?111Parent companyParent company
Individual shareholders allowed?YesYesYesNoNo
Corporate shareholders allowed?YesYesYesYesYes
Public register of shareholders and directorsYesYesYesYesYes
Can the entity hire expatriate staff?YesYesYesYesYes
How long to get work permit approved3 months3 months3 months3 months3 months
Engagement fees
Estimate of engagement costs€14,150€12,000€14,650€14,150€12,150
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For additional information on our business setup services in Italy, please contact our in-house country expert, Mr. Simon Guidecoq, directly:
client relationship officer - Simon