Italy is profitable and easiest European country to start business-activities. Foreign businessmen who have founded their business here are endowed with prestigious and profitable privileges. Italy is in demand among business investors: the number of companies managed by foreigners has grown significantly. In this article, we will consider basic peculiarities of firms’ establishment in this jurisdiction and analyze the key points, as well as auxiliary nuances.
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Types of Italian LLCs
When registering a new company, special attention should be paid to the choice of legal form. Italian law provides for following options and options for businessmen.
- SNC. This form of business allows any number of founders. All of them are jointly and severally liable with their property. A general partnership is often organized by foreign entrepreneurs, but only if there are 2 or more founders.
- SRL, similar to LLC. The most popular form of doing business in Italy, which obliges to employ at least 50 people. When registering an LLC, at least 10,000 euros of authorized capital is paid in full to the company’s bank account if the company has one founder.
- Ditta Individuale, imprenditor. This is a private form of business. Most often, emigrants choose this form of registration of their activities. Italian tax law offers such companies a preferential tax treatment of 5% of profits.
The SRL form should be discussed in more detail, as it’s very commonly-chosen and has fewer requirements and rules regarding its establishment. It is similar in nature and legal nature to LLC.
This form of doing business-activities is very popular among Italian entrepreneurs. Depending on the number of founders, the authorized capital, the minimum amount of which is 10,000 €, is deposited upon registration of the LLC in the amount of 100% (if there is 1 founder) or 25% of the amount (if there’re 2 or more founders) to banking account. Firms and their founders’ liability is limited by the amount of the authorized capital. This type of organization of activity is designed for businesses with an annual turnover of more than 10 million €. When establishing an LLC, foreign businessmen undertake to employ at least 50 employees.
To open an SRL or simplified SRL S, you will need to implement next-mentioned:
- execute the memorandum of association through a notary;
- pay up starting capital;
- open VAT number;
- activate a certified email address in the name of the company;
- register the SRL with national Registrar.
You will be obliged to engage a certified and experienced Italian accountant in the service of your company, who in Italy is called a Commercialist and performs not only the functions of an accountant. A lot in your business depends on the right choice of commercialist.
Requirements for registering an SRL in Italy in 2023
Any law-abiding non-resident can launch a business in the country, which confirms the seriousness of his intentions and the availability of capital for investment. So, for this you need to follow a few simple steps.
- Prepare a business-plan and documents confirming financial viability and ability to invest in the business-project.
- Get a certificate of no obstacles to doing business in Italy and permission to enter the country.
- Get a national visa.
- Get a residence permit.
- Register a commercial structure.
- If necessary, obtain a business-license.
- Engage in the continuous development and prosperity of business-activities.
When an entrepreneur applies for a D visa and a residence permit, he/she proves his intention to do business in Italy. To implement the business plan, the applicant confirms financial capabilities, namely, the availability of sufficient capital in the bank account and income for the last year of at least 8400 €.
You can also purchase a ready-made version of a commercial project. Foreigners acquire in Italy a share or a business in its entirety. Registration of the transaction takes about two weeks. The purchase is convenient because you do not need to register a business, look for an office space, open a bank account, obtain licenses and other permits.
SRL taxation in italy
The tax rate for residents and non-residents of the country is 33%. It is worth noting that the taxes payable on an SRL are highly dependent on expenses incurred during the calendar year. It is important to know that not all expenses incurred in connection with SRL related activities cannot be 100% deductible.
Therefore, here you will definitely need the advice of a good accountant, who will carefully help you analyze the costs in order to understand how real taxation will be calculated on profits. Our company is ready to provide you with professional support in this matter.
Operational features of SRL
Thus, in order to better understand the operational characteristics and features of this form of business establishment, its main features should be given.
- From the point of view of company management, it is worth noting the following. Participation of investors in your company will be possible only in cash. Investment in an enterprise can be not only monetary, but also in the form of intellectual property, real estate or movable property. In the case of opening an SRL, you will be able to attract investments only with money.
- Investors will not risk their personal assets, but in the event of a problem, they will be subject to civil and criminal liability for any wrongdoing committed by the firm.
- Only natural persons can become members of the founders of the company.
Thus, with a correct and competent institution, in the future, when managing a company, there will be no difficulties and problems.
SRL advantages in Italy
Now let’s move on to list the main advantages of establishing a commercial structure in this jurisdiction.
- Opportunity to live in Italy and get a residence permit.
- There is no need to obtain additional visas in order to travel around Europe and interact with partners. This helps expand partnerships.
- An opportunity to take business to the international level, which helps Italian entrepreneurs to maintain a quick turnover and wide business ties.
- Tax and credit benefits in a country with a comfortable investment climate.
- Support of the state apparatus. Simplified corporate procedures apply in particular for high-tech business lines.
- Convenient, well-formed and highly developed infrastructure that helps entrepreneurs stay mobile. For example, from anywhere in the country you can get to a conference in Europe in half a day.
- Developed and highly qualified legal system, which is based on Roman law.
For professional qualified legal assistance, contact our experts. We have been working in this industry for many years, and we can handle even the most complex cases.
The author of this article is Denys Chernyshov – CEO and founder of the world-famous law firm Eternity Law International.