Setting Up A Business Remotely in Italy - VAT & Taxes
Still battling to shake off its reputation as an economic slow starter, Italy has recently taken new steps to position itself as a welcoming home for foreign investment. The result is that Italy is slowly emerging as a land of opportunity, although you will need specialist local advice to help navigate your way through the bureaucracy.
Requirements for company formation in Italy
- Minimum share capital is: €10,000 for 1 shareholder, €2,500 for 2 or more shareholders.
- Minimum number of directors is one.
- No restrictions on foreign shareholders.
- Audited accounts to be filed annually.
- Annual tax return and VAT filed quarterly plus annual audit.
- Codice Fiscale (tax ID) required.
- Any client that does not have any accountancy services with us will need to provide a written declaration released by their accountant stating that they are keeping and filing the client’s company books.
What are the main types of company in Italy?
There are three major kinds of business entity for foreign investors, and they are as follows:
- limited liability company (SrL)
- joint stock company (SpA)
What are the main features of a SpA joint stock company?
- main format for medium to large companies
- minimum share capital is €120,000
- minimum number of directors is one
- no restrictions on foreign shareholders
- audited accounts to be filed with the Registrar of Companies
What are the main features of a branch?
- foreign parent responsible for all liabilities of Italian branch
- minimum of one director required
- accounts to be maintained but no reporting requirements
Is it complicated to set up a company in Italy?
More so than in some other European countries, but with our expert help we can guide you through the process smoothly. The formalities include the following:
- arranging articles of association and memorandum of association
- placing the executive articles of association before a public notary
- obtaining an Italian tax code and identity document
- opening a local bank account
- registering for VAT
- filing with the Registrar of Companies
- securing approval by a local tribunal
How easy is it to recruit staff in Italy?
As a general rule, it is easier to recruit staff in the underdeveloped south, where unemployment is high, compared to the wealthier north of the country. Recruitment agencies for permanent and temporary staff are plentiful and the workforce is generally of a high caliber. Labour laws strongly favor the employee and it is essential to take advice before entering into a contractual arrangement – we have a network of local experts who can assist you on this point.
What is the regulatory environment like?
The environment is now much more liberal than it used to be. Capital and dividends can be freely repatriated in line with EU rules, and Italy has a number of double taxation treaties. However, public authorities are weighed down with bureaucracy and the legal system is slow. Foreign ownership is permitted in all industries except for defense-related areas such as aviation and shipping. Certain restrictions apply in the telecommunications sector.
Are there financial incentives available?
Italy offers a variety of incentives for foreign and local investors alike. These include:
- corporation and local tax breaks for ten years in areas of high unemployment
- research and development grants covering up to 50% of total R&D costs
- low-interest loans for enterprises that encourage exports of Italian goods
And what about banking facilities?
Milan is one of Europe’s foremost financial capitals and banking facilities across Italy are generally good. Efforts are underway to rationalize the many hundreds of independent local banks, and facilities are expected to improve further once this process is complete. We have good banking contacts in Italy that can help you with introductions and opening a bank account in Italy.
Any other issues you have regarding company incorporation in Italy - such as tax and VAT or setting up a business remotely – please contact us on 0033 (0)1 53 57 49 10 or email us from our contact page and we’ll be happy to help you.