Company incorporation in Italy

If you do business in Italy there may be a point that it makes sense to set up a local company. Then you need to know how to comply with local regulations and who can help you.

This article describes:

the most likely types of company to set up;
how you do this and who can help you;
a few important fiscal regulations.

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Your legal entity in Italy

Italy, with its strategic location, large consumer market, and strong ties to the European Union, is an appealing destination for foreign businesses.

Most Common Business Forms for Foreign Companies

The most popular legal entity for foreign businesses in Italy is the Società a Responsabilità Limitata (SRL).

Comparable to a limited liability company (LLC) in other jurisdictions.
Requires a minimum share capital of €10,000, with at least 25% paid at incorporation (or €1 for a simplified SRL, known as SRLS).
Shareholders’ liability is limited to their contributions.

Another option is the Società per Azioni (SPA), commonly used by larger companies, with a minimum share capital of €50,000.

Setting Up a Company in Italy

Setting up an SRL or SRLS involves the following steps:

Drafting and notarizing the company’s Articles of Association (Atto Costitutivo).
Depositing the initial share capital in an Italian bank account.
Registering the company with the Italian Business Register (Registro delle Imprese).
Obtaining a tax identification number (Codice Fiscale) and VAT number (Partita IVA).

Foreign nationals can serve as directors (Amministratore Unico or part of a board) of Italian companies. Residency is not mandatory, but a local address for the company is required.

Taxation and Withholding Taxes

Italian companies are subject to corporate income tax (IRES) at a flat rate of 24%, along with a regional tax (IRAP) of approximately 3.9%.

Regarding dividends:

Dividends paid to foreign shareholders are subject to a withholding tax of 26%, though tax treaties may reduce this rate.
Italy has a wide network of double taxation agreements to prevent double taxation and lower withholding tax rates for foreign investors.

Service Providers for Company Incorporation

These firms provide support with incorporation, compliance, and tax matters to simplify the process for foreign entrepreneurs.

Travel to Italy for a better impression

The best preparation for doing business in any country is visiting it. This way you can experience the culture, check the shops and build your network.

With Trip.com you can compare flights and also book your hotel.

Hotellook compares different hotel sites so you always have the best rate.

Localrent connects you to national rental car providers per country.

Frequently asked questions

How to convince an importer in Italy to work with you?

As in any country, convincing an importer or wholesaler to put your product in his assortment is difficult. Also in Italy importers look at the rotation of the product, how easy and often they can sell it, and multiply this with the margin they can make on it. The result should be higher than they earn now from any competing product. Only if you have proper sales data, for example from other countries, they will engage in a discussion with you.