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How to start a business in Italy as a foreign investor

A foreigner may conduct a business in Italy either as an individual, or through the setting up of a new company or through the purchase of shares in an existing company. Finally, there is also the possibility to set up a representative office of a foreign entity. However the representative office can only conduct marketing activities. Such opportunities are available both for European and non-European citizens.

When the business is conducted as an individual, there are some preliminary administrative fullfillments such as the opening of an Italian VAT and the liability for debts is extended to the whole individual patrimony, so that it is risky option. The same risk applies to personal partnerships such as S.n.c. (Società in nome collettivo) and S.a.s. (Società in accomandita semplice), which have not legal personality.

The most common type of company to conduct small scale business in Italy is the S.r.l. (Società a responsabilità limitata), which is less risky since the liability is limited to the amount of the investment. In the future, if needed, the limited company SRL can be “upgraded” to a joint stock company (“S.p.A”) to be listed on the market.

The requirements to set up a Srl in Italy are the following:

  • Minimum share capital of 10,000.00 Euro. It must be paid up 25% (2,500 Euro) at the moment of incorporation. If there is a sole shareholder it must be paid up 100% at the moment of incorporation.

  • Apply for an Italian tax code for shareholders and directors. To apply for Italian tax code on behalf of foreign businesses it may be required the legalization and translation of the foreign company business licence and the signign of a power of attorney.

  • No need to be resident in Italy for shareholders and directors

  • To have an address in Italy for the company registered office.

The incorporation Procedure involves the signing of a power of attorney (if shareholders or directors do not speak italian and/or are not phisically present in Italy) and the signing of an incorporation deed in front of an Italian Notary. Then the company can be enrolled at Italian Company Registry and apply for a mandatory certified email (PEC) and a VAT. The share capital can initially be paid into a notary's trust bank account at the time of incorporation and subsequently transferred to a company bank account opened by the appointed director.

It is possible to keep the company inactive for an initial period. However, it is not advisable to keep the company inactive for more than 2 years in order to avoid Italian tax agency assessments.

Since 2017 in Italy it was introduced a simplified type of limited liability company (S.r.l.s.) with a minimum share capital of € 1 and an incorporation process without notarial fees. However, it is not advisable to address to a simplified limited liability company for immigration purpose neither for managing relations with financing investors.

Avv. Lifang Dong and Avv. Chiara Civitelli

The content of this article does not constitute legal advice, but has an informative function. For tailor made legal advice, contact the firm by e-mail to: or by phone +39 06 916505710. © Dong & Partners International Law Firm, All rights reserved.

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