How to open a limited liability company in Italy?

With 297.000 active head offices (5.7% of the national total), Milan is the second Italian province in terms of number of companies – right after Rome, which hosts 350.000 offices (6.8%) – but it ranks first as for number of employees with 1.9 million workers (12% of the national total). The number of firms in Lombardy remains stable (with a +0,2% increase), but the number of employees grew significantly during the last year (at a +3% rate). The main sectors represented are trade, construction, real estate and manufacturing. This is what emerges from a study carried out by the Milan Chamber of Commerce based on 2016 data from the business register.

One of the key players and largest economies in the European Union, Italy has recently taken important new steps to position itself as a welcoming destination for foreign investments. Despite the persistent bureaucracy – which is increasingly undergoing a simplification process -, through the help of specialized local professionals incorporating an Italian limited liability company can be quite simple. And for those who wish to start an entrepreneurial activity, these are the steps to follow…

How to open a limited liability company in Italy?

First of all, there are two main categories of private limited liability companies:

• Traditional società a responsabilità limitata (S.r.l.);
• Simplifiedsocietà a responsabilità limitata semplificata (S.r.l.s.).

Although traditional and simplified companies are operated and managed in the same way, simplified S.r.l.s. have a few restrictions compared to Traditional S.r.l.:

• the shareholders of a Simplified S.r.l.s. can be only individuals and not other companies;
• the share capital of a Simplified S.r.l.s. cannot exceed € 9.999,99;
• Simplified S.r.l.s. can only adopt the standard by-laws provided by Italian law and no amendments to these are allowed.

Regardless of their kind, all limited liability companies must have a registered address in Italy and at least one director and one shareholder. Following the recent change in the law, there are no minimum legal capital requirements for the incorporation of a limited company (i.e. the share capital can be any amount starting from € 1.00).

That being said, the procedure for incorporating an Italian limited liability company consists of only 5 steps:

1. Registration of the directors and shareholders to the Italian Tax Authorities;
2. Execution of the articles of association with a public notary;
3. Issuance of the company VAT number;
4. Issuance of the certificate of incorporation;
5. Opening of a company bank account.

1. Registration of the directors and shareholders to the Italian Tax Authorities

Under the Italian law, any foreigner can incorporate a company in Italy, as long as the principle of reciprocity applies with the foreigner’s home country. Still, all directors and shareholders must obtain an Italian tax identification number (codice fiscale) issued by the Inland Revenue Agency (Agenzia delle Entrate). Obtaining it is quite easy. It can be done personally or through a simple written proxy. The shareholder and / or director need only to fill out a form indicating the purpose of the request.

2. Execution of the articles of association

Under the Italian law, the shareholders must execute the articles of incorporation through a public deed, with a  Public Notary. A person willing to incorporate an Italian limited liability company, therefore, has two choices: execute the articles of association personally or through a special attorney (a list of the members can be found here https://en.wikipedia.org/wiki/Apostille_Convention). The Special Attorney will be granted the powers to execute all the necessary incorporation documents on the shareholder’s behalf.

3. Issuance of the company VAT number

Once the Articles of Association are executed, it is necessary to obtain the Company VAT number (Partita Iva) which is issued by the Agenzia delle Entrate. The request is made online and the VAT number is usually issued on the same day.

4. Issuance of the certificate of incorporation

The final step of the incorporation process is to obtain the certificate of incorporation (Visura). It will be necessary to file all the documentation related to the incorporating company (Articles of Association, By-laws, VAT number, codice fiscale) to the chamber of commerce. The latter, after analyzing the formal aspects of the documentation, will issue the Visura within 2-3 days.

5. Opening of a company bank account

Once the Visura is issued, the incorporation process is over and the company will be officially incorporated and can open a bank account.

Credits: Avv. Francesco Dagnino, LL.M., Ph.D.
partner LEXIA Avvocati www.lexia.it – http://www.italiancompanyformations.com

For more information, please contact:

Invest in Lombardy – info@investinlombardy.com

LEXIA Avvocati – info@lexia.it or info@italiancompanyformations.com

LEXIA Avvocati is an official partner of Invest in Lombardy, the regional investment promotion service for the attraction of foreign direct investments. http://www.investinlombardy.com/about-us/our-partners/lexia-avvocati.