Business Registration in Italy
Accomplishing the dream of setting up a company abroad can be an uphill task. It involves catering to various bureaucratic procedures, arranging complex paperwork, and securing compliance-intensive industry-specific approvals. That’s a cost one pays to keep their business up and running. If you are planning to settle your business in Italy, fret not! As this blog cum guide has your back. Let’s delve into legalities concerning business registration in Italy and explore every delicacy, leading to seamless business establishment.
Can Indian Entrepreneurs Apply for Business Registration in Italy?
Some of you might wonder if it is possible to secure business registration in Italy from India. Well, the answer is downright Yes! You can do that provided you have ticked all the boxes. Italy has enacted different rules concerning the European Union (aka EU)/European Free Trade Agreement (aka EFTA). For example, non-residents including Indians must have a work permit and a valid residence to register a company.
Furthermore, non-EU/EFTA citizens must comply with the following conditions for business establishment.
- The presence of at least one shareholder and director is mandatory.
- The entity must have met the minimum capital requirements.
- Availability of legal paperwork is compulsory
Indian businesses seeking to pursue business in Italy without establishing an entity can open a branch or representative office. To accomplish this, they must have a certificate of good standing issued by the Italian Embassy or a local Italian notary.
Similarly, to open the branch office, the applicant firm must submit documents such as;
- Deed of appointment,
- Certificate of incorporation
- Articles of association
Structures to Choose for Business Registration in Italy
From S.r.l and branch office to S.p.A, Italy offers a couple of business structures to choose from. Let’s explore each one of them, their pros, and limitations.
Representative office
Ideally suitable for overseas entities, the representative office can serve as an extended arm for the non-resident parent companies, allowing for business expansion. One must head to the REA (Economic and Administrative Register) at the Chamber of Commerce to register such an entity.
Branch office
An Italian branch office can serve as an aid to the parent company seeking business or market research. Such entities attract taxes in Italy.
Limited Liability Company (aka Societa a responsabilita limitata S.r.l)
S.r.l is a good fit for entities comprising more than one founder. The €50,000 EUR is the minimum share capital to incorporate S.r.l in Italy.
Joint Stock Company (aka Societa per Azioni S.p.A)
The minimum capital is €1 EUR for incorporating S.p.A in Italy. The different set of rules come into play if the company chooses to keep its capital over €10,000 EUR.
Simplified limited liability company (aka Societa a Responsabilita Limitata Semplificata S.r.l.s) –
Ideally suited to startups, S.r.l.s can be incorporated with a minimum capital of €1. The upper limit concerning capital can go as high as €9999.99 EUR.
Limited Liability Partnerships (aka Societa in accomandita per azioni S.a.p.A) –
S.a.p.A can be an ideal choice for entities having more than one founding partner. However, the line that distinguishes partners and the entity does not exist in this business model. S.a.p.A are further categorized into the following:
Simple partnership (Societa semplice S.S) – SS is mostly adopted by agri-based firms. As such, there is no capital required to incorporate such firms.
General or unlimited partnership (aka Societa in nome collettivo) S.n.c) – As the name suggests, S.n.c invites unlimited liabilities for partners. The firm’s name must entail the name of at least one partner.
Limited partnership (aka Societa in accomandita semplice S.a.s) – This business entity limits the liability threshold for each partner against their level of contribution.
Requirements to Secure Business Registration in Italy
Below are some common steps concerning business registration in Italy:
Step 1: Find a notary or incorporation expert
Given the complexity concerning a firm’s incorporation, hiring a local notary or incorporation expert like Adviso can be helpful. These can help expedite the legal procedure by saving time on paperwork and other key things.
Step 2: Register directors and shareholders with Italian tax authorities
Securing an Italian tax identification code would be the next important step. This will be required for directors and shareholders. To apply for this code, you must file the application with an inland revenue agency or Agenzia delle Entrate.
Step 3: Register on the Companies Register
The next step is registering the entity with the Italian Chamber of Commerce Companies Register. Catering to this step is paramount for company establishment.
Step 4: Execute the AoA
In this step, get the charter document i.e. Articles of Association (AoA) notarized with the notary. Make sure the AoA adheres to the local laws to avoid any legal nuisance.
Step 5: Issuance of VAT number (Partita Iva)
Companies must apply to the appropriate authorities (Agenzia delle Entrate) online to obtain VAT numbers.
Step 6: Issuance of Certificate of Incorporation (Visura)
This step involves approaching the Chamber of Commerce to secure business registration. The application is required to be submitted for this process. The application must be accompanied by mandatory paperwork such as AoA, bylaws, VAT, and the codice fiscale.
Step 7: Open a bank account
Upon securing the business registration in Italy, head to the designated bank to open the corporate bank account. This is a critical step to making an entity valid in the eye of the law.
Cost of Setting Up a Company in Italy
From registering your company to pursuing business endeavors, you will stumble upon various costs to keep your entity up and running such as:
- Incorporation fee: approximately €2,300 EUR.
- Minimum share capital costs: ranging from €1 – 50,000 EUR.
- Accounting fee: approximately €1,560 annually to start.
- Trade Register fee (if required): €520 EUR.
Taxes To Consider When Going for Business Registration in Italy
Running a business in Italy is a matter of catering to various expenses, compliances, and taxes. Speaking of taxes, you may encounter the following taxes to keep your business up and running. The applicability and the tax rate depend on the nature of the business or the industry you are serving.
- Corporate income tax (IRES) – The current CIT rate has been capped at 24%.
- Surcharge: Some banks might impose a surcharge of 3.5%. So, keep in touch with your expert to stay informed about its applicability.
- Regional tax on production activities (IRAP) applies to production-based entities operating in a taxable region. The current rate of IRAP is poised at 3.9%.
- Value Added Tax (VAT – Imposta sul Valore Aggiunto) is set at 22%. However, there are reduced rates such as 10%, 5%, and 4%, that apply to non-taxable operations.
- Excise Duty also comes into play when it comes to production and importation of certain commodities. Connect with Adviso for more detail.
- Municipal tax on property (IMU – Imposta Municipale Unica) applies to entities holding a business place in Italy.
Conclusion
Securing business registration in Italy is the first step to transforming your business idea into reality. It is evident that though company incorporation seems like a straightforward task, it involves various steps and bureaucratic procedures. Therefore, it is advisable to proceed professionally under the supervision of an expert agent or firm like Adviso. Being a prominent agency in the compliance sector, Adviso excels with its robust portfolio of services, which includes global incorporation, regulations advisory, IPR, etc. Connect with Adviso if you seek to start your dream business with zero hassle.
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