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Setting up a business in Italy

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Expatriates from around the world dream of setting up their own business in Italy. Here is necessary information on the steps to be followed.

Among the sectors which attract investors in Italy, you have agriculture, manufacturing, luxury, high-end consumer goods, roads infrastructure, railways, information and communication technology, banks, automotive, aerospace and tourism. In fact, Italy is known to be the world's 5th manufacturing power and the Euro third economy in the euro area. You are however advised to inquire on the Italian labor law and its bureaucracy.

Local authorities also offer many advantages such as state guarantees for exporters, investment grants, soft loans, or income deductions. In general, German, British, American, French, Dutch, Swiss and Luxembourg citizens are the most common investors in Italy.

To date, Italy's economy is controlled by big companies which constitute some 10% of the market while small and micro businesses, mostly family-owned, constitute 90% of the market.

Registering a company

You have to follow a series of procedures for registering a company in Italy:

  • definition of the company's status and regulations
  • obtaining specimen signatures
  • affidavits
  • completing forms required by the Italian Commercial Registration Office
  • signing documents before a public notary
  • translated documents certification by an Italian public notary
  • opening a bank account
  • hiring a local accountant.

Market study

Conducting a market study is compulsory before setting out to set up a business in Italy. This will allow you to analyze the Italian market, understand regulations and to build up your contacts.

Types of companies

Societa Cooperativa (SC) or cooperative society:

There is no limit on the number of shareholders and no minimum capital. Associates can benefit from a limited or unlimited liability but it has to be determined in advance.

Societa Semplice in Accomandita (SAS) or simple convenience company:

There is no limit on the number of shareholders or minimum capital and responsibility of the partners is unlimited.

Societa Collettivo in nome (CNS) or partnership:

There is no limit on the number of shareholders or minimum capital. Partners have unlimited and many several joint liabilities.

Societa per azioni (SpA) or limited liability company:

There is no limit on the number of shareholders. A minimum capital of 120,000 euros is required. It must be fully subscribed and will be paid at 3/10 of the company's creation. Moreover, the partners' liability is limited to the amount contributed. A quarter of the initial investment must be paid before the company's registration in Italy.

Societa a responsabilita limitata (SRL) or limited liability company:

There is no limit on the number of shareholders. A minimum capital of € 10,000 is required. The sum must be fully subscribed and will be paid at 3/10 of the company's creation. Partners' liability is limited to the amount contributed. Moreover, a quarter of the initial investment must be paid before the company's registration in Italy.

How to set up a business with partners

In the case of SAS, SC, or SNC, 25% of contributions must be paid in cash to an Italian financial institution. If you opt for a sole proprietorship or sole proprietorship SA, payments must be made in cash. Contributions should be evaluated by an external commissioner designated by the company itself.

You will have to hire a notary in order to determine the company's status and regulations following 20 days of registration with the Chamber of Commerce. You will also have to register with the Ufficio del Registro delle Imprese, that is the Registrar of Companies Office. Each district has its own office. You then have to register your company with the Registro Economico Amministrativo (REA) within 30 days after the creation of the statutes and request for the company's fiscal code and Partita IVA. This should be completed within 30 days following the company's setting up.

In the case of a SA, you will have to publish notice of a constitution in the Gazzetta ufficiale within 30 days following registration at the Registro delle Imprese. You will also have to notify the Bollettino Ufficiale delle Società per Azioni ea Responsabilità Limitata, that is the BUSARL official bulletin.

Sole proprietorship

Società per Azioni unipersonale (SA):

You will be the company's sole shareholder and your liability will be limited once the capital is fully paid. A minimum capital of EUR 120,000 is required. You can either constitute a board of directors with several members or a single director to manage your Società per Azioni unipersonale.

The Ditta individuale (DI):

You will own a craft business, but specific prerequisites apply. A capital or assets are not required. However, your personal belongings will be held as a guarantee in case you have debts.

Società unipersonale has responsabilità limitata (SRL):

SRS allows you to have a single partner, whose liability is limited to the amount contributed. You are required to let out a capital of 10,000 euros which may consist of contributions. If your contributions are made in cash, you will have to appoint an expert auditor who is registered with the Revisori, that is the Auditors registrar.

You will also have to notarize your SRL's constitution. Once you are done with this, you will be able to appoint a board of directors consisting of several members, or a single director. You are authorized to simple accounts provided your company's turnover does not exceed 120,000 euros and it meets certain criteria (number of employees, etc..). Finally, you can in no case make a public offering.

Sole (family) proprietorship

After meeting conditions listed above, you will have to establish a deed in order to identify each participating member, the degree of relationship, and determine how benefits will be distributed.

Detailed steps to take to open a sole proprietorship

Once you have set up your company, you have to register with the Registro delle imprese, that is the Registrar of Companies within 30 days. You will then obtain your company's fiscal registration code which is mandatory to be recognized at the state and public administration levels.

Once you have started your business, you also have to register it with the agenzia delle entrate, that is the Tax Department, within 30 days. This will help you obtain your company's VAT number called Partita IVA in Italy. In fact, you must go to the nearest VAT office to your place to file a declaration of existence.

Branch and representative office

If your company's branch or subsidiary is based abroad, it will be considered as an organization dedicated to customers relationships. Your company's representative office or Ufficio di rappresentanza will be considered as your showcase, providing commercial and business information only.

Formalities related to opening a representative office or branch are much simpler and less expensive. You have to register your office with the local chamber of commerce within 30 to 40 days following its opening. You will then receive your company's complete file.

Once the file is submitted to the notary, you will have to request for a Partita IVA (VAT) number. You must also produce a certified copy of the branch's incorporation deed and a copy of the Board of Directors' meeting reports. These documents must be notarized.

Fees

Various additional costs apply to the setting up of a business in Italy. In general, you will need some:

  • 23 euros for entry in the commercial register for the paper return
  • 18 euros for entry in the commercial register (online or computerized statement)
  • 17,50 euros for stamp duty
  • annual fees (diritto annuale) to the local chamber of commerce (the amounts varies according to the type of company and the local chamber of commerce)
  • notary, lawyer or accountant (commercialista) fees, if you have hired any of them, as well as the fees for required records, etc.

Partnerships

  • 120 euros for entry in the commercial register for the paper return
  • 90 euros for entry in the commercial register for telematics or computerized statement
  • 59 euros for stamp duty.

Capital companies

  • 120 euros for entry in the commercial register for the paper return
  • 90 euros for online on e-entry in the commercial register
  • 65 euros for stamp duty.

Companies in Italy also have to pay tax according to the type of business. For more information, please see the section "Corporate tax in Italy".

Benefits for foreign contractors

Grants for new productive investment:

  • Tax bonus for the purchase of factories, machinery and equipment.
  • Tax credit for new investment in poor areas.

Research and Development grants:

  • Special Fund for Technology Innovation
  • Assistance for industrial research
  • Automatic tax breaks for research

Grant for complex and integrated investment programs:

  • Assistance for the development of new productive activities, training and research
  • Special help for SMEs
  • Technological innovation and environmental protection
  • Tax incentives for SMEs in tourism and trade fields
  • Central Guarantee Fund for SMEs
  • Innovation and SME development and support to SME consortiums

Grant for the establishment of the company for the self-employed and micro-businesses:

  • Financial help and support services for project preparation and activity start-up
  • Regional financial help for less than 36 years old investors (condition vary according to different areas)
  • Regional assistance for the creation of small businesses (subsidized loans, investment aid and expenditure management)
  • Regional assistance for women entrepreneurs.

 Useful links:

Chamber of Commerce www.registroimprese.it
Chamber of Commerce and Industry www.camcom.gov.it
Chamber of Commerce of Milan www.mi.camcom.it
Public administration for businesses www.impresainungiorno.gov.it
Invest in Turin in the Piedmont www.centroestero.org
Ministry of Economic Development www.sviluppoeconomico.gov.it
National Agency for Investment and Business Development www.autoimpiego.invitalia.it
European Investment Bank www.eib.org
French Chamber of Commerce and Industry in Italy www.chambre.it
Directory of companies in Italy www.infoimprese.it
Promotion and development of SMEs in Italy www.cesvitec.it
National Agency for attracting investment and business development www.invitalia.it
Aid for the creation of micro-enterprises (partnerships), and independent www.autoimpiego.invitalia.it

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