How to register a company in Italy
Introduction
Italy is the world’s ninth largest economy. Its economic structure relies mainly on manufacturing and services. It is the second largest manufacturing country in Europe. Italy is particularly strong in the manufacture of machinery, food products, fashion items, automotive parts and pharmaceuticals.
Its strategic position facilitates trade between Northern Europe, Southern Europe, North Africa and the Middle East. This makes Italy a great place to start or expand an international business.
If you have ever considered setting up a company in Italy, here are some helpful guidelines for you to accomplish that goal.
Before moving ahead with your company registration, there are a few things you need to put in place. That is, appointing at least one director and shareholder of any nationality. Also, since there is no minimum legal capital for incorporation of any company, the share capital can be any amount starting from €1.
Also, the name of the company to be incorporated should not be similar to any other company in the same address. So proper registration for national trademarks can be done to protect and prevent two companies from bearing the same name on the same address.
Are you an entrepreneur looking to start a company in Italy. Here are simple steps for how to register a company in Italy.
How to register a company in Italy
1. Registration of Directors and Shareholders with Italian tax
Under Italian law, any foreigner can register a business in Italy as long as the principles of reciprocity apply in the foreigner’s home country. There is no residency requirement to incorporate an Italian company. Still, all directors and shareholders must obtain an Italian tax identification number.
This is issued by the Inland Revenue Agency. Obtaining it can be done personally or through a simple written power of attorney. The director or shareholder needs to fill out a form stating that the purpose is for the incorporation of a company. The form is provided by the Inland Revenue Agency.
2. Execution of the Articles of Association.
According to Italian law, the shareholders must execute the Articles of Incorporation through a public deed. This means that the association must be signed in the presence of the Notary public. There are three ways the Articles of Incorporation can be signed if the shareholder/Incorporator is a foreigner.
–Executing the Articles personally. This implies that the Incorporator or shareholder must come to the country and go to the Notary public if he/she wishes to execute the Articles personally. This enables the shareholder to sign the Articles of Association and the bylaws of the Incorporating company.
-Executing the Articles of Association through the power of attorney. If there are no plans of coming to Italy immediately, another way of executing the AoA is hiring a special attorney to execute the AoA on the shareholder’s behalf.
The power of attorney must be granted to an Italian lawyer who will be granted the power to execute all the necessary incorporation documents on behalf of the shareholder.
-Executing the Articles of Association through a virtual meeting. A recent law made the incorporation of a company through a virtual meeting with the notary public, possible.
3. Issuance of the company VAT number.
Once the AoA has been executed, the next necessary step is to obtain the company VAT number. The Value Added Tax identification number used in many countries for value added tax purposes. It can be verified online at the EU VAT information Exchange system website.
The VAT identification number is important for all traders or businesses that are actively involved in the manufacturing of goods and services. The simple principle of VAT number is that a consumer pays a tax on the products they buy, based on the product value.
The request for the VAT number can be made online and the VAT number is usually issued on the same day.
4. Issuance of the certificate of registration
The final step is to obtain the Certificate of Incorporation. Before this is given, it is necessary to file all the required documents of the Incorporating company which are the Articles of Association, By-laws, VAT number to the Chamber of Commerce.
The Chamber of Commerce will then issue the Certificate of Incorporation, after analyzing the formal aspects of the documentation, usually within 2-3 days.
5. Open a company bank account
After the Certificate has been issued, the company can now be allowed to open a corporate bank account.
Conclusion
Italy is considered a great place for business due to its low tax rate, good infrastructure, labor and productivity. It is also an easy access to the EU markets. Italy also provides many opportunities for innovative research and development.
Since their economy relies mostly on manufacturing of goods, you might want to consider going into that line of work if you are planning on registering a company in Italy.
Not only do they allow foreigners to register companies in the country, they also make it easier to do so. This will enable the incorporator to not travel to
Italy until he/she is ready to start the company.
FAQs
-How much does it cost to register a company in Italy
The average total fee per Italian engagement amounts to €14,150. This includes company incorporation, corporate bank account, company secretary and legal registered office.
-Can a foreigner open a company in Italy?
A foreigner can open a company in Italy. This is because according to Italian law, as long as the principles of reciprocity apply in the foreigner’s home country, they can open a company in Italy. But still, the shareholders must obtain an Italian VAT number.
-Do you need a business licence in Italy?
You will need a legal permit to live and work in the county in order to set up a business.
–Can I open a bank account in Italy as a foreigner?
Regardless of your citizenship or visa status, you are allowed to open a bank account in Italy. However, the process may not be the easiest especially if the person is outside the country.
-What is the most affordable way to start a company?
The most affordable way for most people is to form a limited liability company. It is less expensive than a corporation.
-Can I use the company name that exists in another country?
Yes, you can.
-Is it illegal to have a similar company name in the same address?
Yes it is. If your company name is too similar to someone with the same address as you, you may have to change it if someone makes a complaint.
-How do I avoid having the same company name?
Registration provides national trademark protection which protects companies from having similar names/trademarks.
-Can I use the same address for two different limited liability company?
The same address can be used for multiple companies, although it is a very good idea to have a unique address for your business.
-What major challenges do entrepreneurs face while registering a company in Italy?
One main difficulty faced by the entrepreneurs is the complex regulatory environment which often lacks clarity and efficiency. But luckily its economic freedom has increased by 1.1% in 2021 compared to 2020.
-What is business like in Italy?
Italian business is considered flexible and sociable, and their working practices are both focused and person-oriented.
