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WHAT KIND OF COMPANY?

Foreign investors (companies or individuals) can set up a business activity in Italy by:

  • Establishing a company in Italy (mainly a società a responsabilità limitata or a società per azioni);
  • Establishing a branch of a foreign company in Italy (sede secondaria);
  • Opening a representative office of a foreign company in Italy (ufficio di rappresentanza).
Who can set up a company in Italy?

In principle, foreign investors (legal persons or individuals) wishing to start up a new business in Italy may operate subject to conditions of treatment reciprocity, i.e. when a similar right is granted to Italian investors operating in the State of origin of the concerned foreign investor. Verification of such treatment reciprocity prior to starting a business in Italy is not necessary whereby the foreign investor:

  • is a citizen of a Member State of the European Union;
  • is a citizen of one of the States of the European Economic Area (i.e. Iceland, Liechtenstein, 
and Norway);
  • is a citizen of a country holding a specific international agreement with Italy – i.e. agreement governing international investment, treaty of friendship and trade, or other such agreements;
  • has – as individual – refugee or stateless person status.

In order to verify whether the required reciprocity conditions are actually met, see the individual 
”Country Reports” issued by Italy’s Ministry of Foreign Affairs (MAE). For the official list of treaties held with Italy, see the online database published by MAE

Main types of Italian companies

Italy’s corporate law primarily differentiates between Corporations and Partnerships.

Corporations

Corporations (società a responsabilità limitata or S.r.l. and società per azioni or S.p.A.) are generally characterized by:

  • legal personality, autonomous from company owners’ personality;
  • limited liability for the company owners, i.e. each owner’s liability is limited to the cash or assets he/she has contributed to the company;
  • separation of ownership and managing powers; hence the owners of the company are not necessarily also the directors of the company, and directors are not necessarily company owners;
  • Ownership as freely transferable either inter vivos or mortis causa. Limited liability company.
Partnerships

Partnerships (società in nome collettivo or S.n.c. and società in accomandita semplice or S.a.s) are generally characterized by:

  • unlimited joint and several liability of the partners for the company’s obligations;
  • each partner acts as a director of the company with managing powers;
  • non-transferability, either inter vivos or mortis causa of the partner status except whereby authorized by all other partners.
  • Tax transparency

Both Partnerships and Corporations are to be established via a Memorandum of Association (or Deed of Incorporation) signed by the founder(s) and authenticated by an Italian public notary. The document is complemented with the Articles of Association (or By-Laws) of the company, i.e. the set of rules governing the company’s operations through its existence.
Therefore, shareholders of a proposed company shall personally come to Italy to sign the public deed for the incorporation of the company before the notary. Alternatively, an apostilled or legalized power of attorney can be granted to a lawyer to sign the public deed before the public notary on behalf of the client.