Business entities in Italy

There are several ways of doing business in Italy, the most common being through the setup of a limited liability company (locally known as a SRL). Alternatively, foreign companies can also setup a branch office in Italy, or a representative office when they do not plan to conduct any productive or commercial operations from within the country.

The Italian Limited Liability Company (SRL)

Setup LLC in Italy

  • It is possible to setup an Italian limited liability company with only i) one shareholder, contributing a minimum paid-up capital of €1 and ii) one director, who does not need to be EU citizen or resident to complete the process;
  • Each year, the entity will be also required to submit i) a tax return to the Italy Revenue Agency and ii) financial statements. Audit if the latter is not required if the company meets two of the three following 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: such entity is commonly used to setup an SME.

The Italian Publicly-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 Italy public limited company: registration of this business entity 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 Italy 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 zone of Trieste;
  • Transactions conducted from the free zone benefit from i) exemption from VAT for non-EU goods in transit ii) deferred VAT payment on merchandise imported into the EU;
  • Best uses for an Italy free zone company: import/export activities.

The Italy Branch Office (Succursale)

  • Foreign companies willing to do business in Italy can register a branch of their entity in Italy, instead of setting up a local subsidiary. Such branch office will have i) an independent management team, including at least one country representative who must be ordinarily residing in Italy and (if necessary) ii) a corporate bank account based in Italy;
  • 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 has also unlimited liability against any debt or loss of the branch office.

Representative Office (Ufficio di Rappresentanza)

  • Representative offices are only legally allowed to 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 in the Italian market, before the registration of a branch or subsidiary.

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€12,150€12,000€14,650€14,150€12,150
Draft invoiceView invoice PDFView invoice PDFView invoice PDFView invoice PDFView invoice PDF

Frequently asked questions

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Contact us

For additional information on our business setup services in Italy, please email us at Alternatively please contact our in-house country expert, Mr. Saidolim Kodirov, directly: