The Italian Republic (“Italy”) is the fourth most populous EU member state. It is strategically located at the center of Europe, and shares open land borders with France, Switzerland, Austria, Slovenia, San Marino, and Vatican City. .As a founding member of the European Union, Italy offers access to a wider market of approximately 500 million consumers. Furthermore, Italy is the fifth most visited country in the world
Foreign investors are free to adopt various forms of business investment. Their choice is only based on the strategy they are planning to adopt, as well as on the management, financial and tax considerations.
Limited liability company (Società a responsabilità limitata) (Srl)
The minimum corporate capital can be as low as EUR1 but when the capital is below EUR10,000 special rules and restrictions apply.
In case you are running a small business and you don’t want to freeze all this money at the very beginning of your venture you can choose to have two or more shareholders. In this case, they will be required to deposit only Eur 2,500. In short:
- one initial shareholder = share capital to be deposited Eur 10,000;
- two or more shareholder = share capital to be deposited Eur 2,500. It doesn’t mean Eur 2,500 for each shareholder, it’s Eur 2,500 in total.
The capital is divided into quotas, which are not embodied in certificates and can be assigned only through a notarized deed.
The Srl has a flexible corporate structure. However, there are limitations which are specific to the Srl (such as minority quota holders’ special withdrawal rights and majority quota holders’ potential joint liability with directors). The Srl cannot issue bonds, although it can issue debentures, under certain limitations.
An Italian Società a Responsabilità Limitata (Srl) offers the following advantages:
- Complete Foreign Ownership: Foreigners may own all of the shares in the Srl.
- Limited Liability: A shareholder’s liability is limited to his or her subscribed share capital value.
- Fast Registration: Once all documents are filed, registration and approval can be accomplished in two working days.
- One Shareholder: One shareholder is permitted but with unlimited liability; if there are two or more shareholders they will have limited liability.
- One Director: One director who is an EU resident is permitted.
- The nationality of the shareholders: Any (with some rare exceptions)
- The nationality of the director: Any (with some rare exceptions)
- No Audits: Small companies do not require audits. (Exception: if the company has a share capital of Eur 120,000 or more, the auditing is required)
- Physical office: Not required (a virtual office is enough to set up the company and to obtain the VAT number)
The current corporate tax rate on profits is 24%. The former rate of 27.5% was reduced effective January 1, 2017.
The government provides a deduction for providing more investment capital than the company requires where the surplus can be deducted from the taxable income.
One of the key players and largest economies in the European Union, Italy has recently taken new steps to position itself as a welcoming home for foreign investment.