Italy
- The “S.r.l.” (società a responsabilità limitata, minimum capital €10,000) is by far the most common vehicle for foreign investors. It offers limited liability, flexible governance and lower requirements than the “S.p.A.”, which needs minimum capital of €50,000.A cheaper alternative is the S.r.l. semplificata, with capital from €1 to €9,999.99 and no notarial fee. Its articles of association are standard, set by ministerial decree, and only the corporate purpose can be defined. Only individuals may be its shareholders.
Innovative start-ups must meet specific R&D, qualified staff or IP requirements. In return they benefit from reduced incorporation and registration costs, flexible share classes, crowdfunding access and tax incentives for investors.
A foreign company may also operate through a branch, with no capital requirement but full liability of the parent.
As from 2021 an S.r.l. can be incorporated entirely online via notarial videoconference. Corporate books may be kept electronically, with a digital signature and time stamp.
- There is no minimum number of shareholders. An S.r.l. may be wholly owned by a single foreign individual or legal entity, provided sole ownership is disclosed to the Companies Register; otherwise the sole shareholder may lose limited liability.Standard minimum capital is €10,000, with at least 25% of cash contributions paid at incorporation. Alternatively, capital may be set between €1 and €9,999.99, fully paid in cash. In that case 20% of annual profits must go to the legal reserve until capital plus reserve reach €10,000. Incorporation without any capital contribution is not possible, but the minimum is only €1.
- Both individuals and legal entities may incorporate or hold an S.r.l.; only the S.r.l. semplificata is reserved to individuals. Every shareholder and director must obtain an Italian tax code (codice fiscale) before the deed is signed.Foreign entities must provide the following, apostilled or legalised and with a sworn Italian translation:
- a certificate of good standing;
- their articles;
- a resolution or power of attorney for their representative.
Non-EU investors not resident in Italy are subject to a reciprocity check, unless an investment treaty exemption applies. The notary and the bank carry out AML due diligence on beneficial owners. Investments in strategic sectors may require golden power notification.
- No nationality, residence or tax domicile requirement applies to directors, and the board may consist entirely of non-residents. Each director needs an Italian tax code. The legal representative needs a digital signature and a certified e-mail address (PEC) for filings. The reciprocity check also applies to non-EU directors not resident in Italy.In practice, however, where no director is resident in Italy, obstacles may arise with the Chambers of Commerce and, above all, with banks, which may delay or refuse account opening. Appointing at least one Italian-resident director is therefore often advisable.
Effective management from abroad may raise dual tax residence issues. Fees paid to non-resident directors are generally subject to Italian withholding tax.
- Mr. Matteo Carli (matteo.carli@crelex.it)
