Foreign investors, both companies and individuals, may set up a company in Italy if the same right is granted to Italians in their country of origin. However, foreign investors are always allowed to form a company in Italy if they are citizens or companies of a Member State of European Union (Iceland, Liechtenstein and Norway included) or of a country that signed an agreement with Italy (e.g. agreement governing international investment, treaty of friendship and trade, or other such agreements).
Our law firm provide foreign investors with a full range of services, including:

⋅ Assistance in getting a tax code (codice fiscale)
⋅ Registering a branch, a representative office, a subsidiary in the Italian Business Registrar and before Italian Tax Authority
⋅ Assistance in the opening of a bank account
⋅ Accounting and Tax services
⋅ HR and Payroll services
⋅ Trademarks/domain names registration and assistance in Intellectual Property related matters
⋅ Negotiating and Drafting commercial contracts
⋅ Litigation and dispute resolution services before any Italian Court

SET UP A BUSINESS IN ITALY
The main options to establish a business in Italy are:
 
⋅ establishing a branch
⋅ establishing a representative office
⋅ setting up a subsidiary (an Italian company fully owned by a foreign company)

BRANCH
As opposed to the establishment of an Italian company, a branch is not a separate legal entity but a foreign “unit” of the mother company. As such, branches do not enjoy of organizational and decision-making autonomy. For tax purposes, branches are considered as permanent establishments and are therefore subject to taxation in Italy. They shall thus keep their own books, submit VAT and income tax returns to tax authorities (Revenue Agency: "Agenzia delle Entrate") each year, and file the annual report of the foreign company with the Italian Business Register.
The establishment of a branch in Italy requires:

⋅ registration of the branch with the Italian Business Registrar (section of branches of foreign companies);
⋅ to appoint a representative of the branch whose name will be entered into the Italian Business Registrar (the branch representative does not need to be an Italian resident and can be the director of the mother company);
⋅ to have an address in Italy (if you don’t have premises in Italy, we can provide you a virtual address);
⋅ to obtain an Italian VAT number.

A branch establishment deed shall be executed in Italy before an Italian public notary. However, the full process can be carried out by distance through a power of attorney granted to our law firm. The foreign mother company shall provide our law firm with its certificate of incorporation and memorandum and articles of association (by-laws) including the name of the directors and shareholders. A copy of the directors’ resolution that authorized the opening of a branch is also requested. The said documents (power of attorney included) shall be notarized and apostilled pursuant to the Hague Convention of 5 October 1961 (or notarized and legalized with a local Italian Embassy or Consulate if the country where the power of attorney is executed is not a member of the apostille convention) and translated into Italian.
Please contact us for more information about the establishment of a branch in Italy.

REPRESENTATIVE OFFICE
A representative office is a registered office of a foreign company that carries out in Italy, purely and exclusively, promotional and advertising activities, collection of information, scientific or market research. The representative office has only an auxiliary or preparatory function to facilitate the foreign company’s entry in the Italian market. A representative office can open a bank account in Italy. In brief, a representative office may only carry out promotional activities, not business activities (production, sales, or services), and its manager has no power to take decision or to bind the foreign company.
For tax purposes, a “mere” representative office is not considered a “permanent establishment” of the foreign company and is therefore not subject to any taxation in Italy. Accordingly, representative offices are not required to keep books, publish financial statements or file income tax or VAT returns. They are, however, required to maintain ordinary accounts in order to document expenses (e.g. personnel costs, office equipment, etc.) to be covered by the foreign company’s head office.
The establishment of a representative office in Italy requires: 

⋅ registration of the representative office with the Italian Business Registrar (section "REA);
⋅ to appoint a representative of the representative office whose name will be entered into the Italian Business Registrar (the representative can be the director of the foreign company and does not need to be an Italian resident);
⋅ to have an address in Italy (if you don’t have premises in Italy, we can provide you a virtual address);
⋅ to obtain an Italian tax code (codice fiscale) with the Italian Tax Authorities

To establish a representative office in Italy, you shall provide us with a detailed description of the activity of the company in its home jurisdiction (on company’s letterhead) a certificate of incorporation (or similar document) of the said company, included company’s bylaws and name(s) of its shareholder(s) and director(s), a special resolution of the board of directors (or sole director) that shall (a) authorizes the establishment of a representative office in Italy indicating the address of the said office and (b) appoints a representative. Copy of the passport of the representative person is also required.
The said documents shall be notarized and apostilled pursuant to the Hague Convention of 5 October 1961 (or notarized and legalized with a local Italian Embassy or Consulate if your home country is not a member of the apostille convention) and translated into Italian.
Please contact us for more information about the establishment of a representative office in Italy.

SUBSIDIARY
Italy offers a wide range of legal forms for setting up companies depending on the business plan, the level of capital to be committed, the extent of liability of the founders as well as tax and accounting implications.
Under Italian company law there is a major difference between Limited Liability Companies and Partnerships. 
Both kind of companies can be owned by individuals or other companies.
Main features of Limited Liability Companies are:

⋅ limited liability for the company owners, i.e. each owner’s liability is limited to the cash or assets he/she has contributed to the company;
separation between ownership and managing powers; company owners are not required to be company directors, company directors are not required to be company owners;
transferable shares;
⋅ need to have at least one shareholder and one director.

Main features of Partnerships are: 
⋅ unlimited joint and several liability of the partners for the company’s obligations;
⋅ each partner acts as a director of the company with managing powers;
⋅ non-transferability, either inter vivos or mortis causa, of the partner status except whereby authorized by all other partners.
⋅ need to have at least two partners;
⋅ tax transparency

LIMITED LIABILITY COMPANIES
Under the Italian law two different kinds of Limited Liability Companies can be formed. Investors may form a smaller and cheaper Limited Liability Company by Quotas ("Società a responsabilità limitata" or "S.r.l.", including “Società a responsabilità limitata semplificata" or “S.r.l.s.”) or a prestigious and more expansive Joint Stock Company  ("Società per azioni" or "S.p.A.").
Limited Liability Company by Quotas may be shaped as standard Società a Responsabilità Limitata (S.r.l.) or simplified Società a Responsabilità Limitata Semplificata (S.r.l.s.). They both allow the broadest flexibility to the founder(s). Commone features are:
the company shall have at least one director and one shareholder (the shareholder/s and the director/s can be the same person and do not need to be Italian residents);
the company must have a registered address in Italy (if you don’t have premises in Italy, we can provide you registered office services);
the director(s) and shareholder(s) of the proposed company shall obtain a tax identification number (codice fiscale) with the Italian Tax Authority
the company shall obtain a certified email address (PEC)
However, simplified S.r.l. have the following restrictions as opposed to standard S.r.l.:

⋅ simplified S.r.l. can be owned only by individuals;
⋅ the initial share capital of a simplified S.r.l. cannot be more than Euros 10,000.00;
⋅ simplified S.r.l. can only adopt the standard model articles of association by-laws provided by Italian law and no amendments to model articles are allowed (i.e. you cannot tailor-make the company’s by-laws).
 
There is no longer any minimum capital requirement to open a standard S.r.l. or a simplified S.r.l. Therefore the initial share capital can be any amount starting from Euro 1.00. However, if the company’s capital is less than Euros 10,000.00 the following minor restrictions will apply:(a) no contributions in kind are allowed when increasing the capital of the company; (b) 20% of the profit for the business year shall annually be put aside as a legal capital reserve until the net asset of the company has reached Euros 10,000.00. Such reserve can be used only to increase the capital or to cover losses.
Shareholders of a Limited Liability Company by Quotas may take decisions provided for by law or company’s Articles of Association in the collegial manner typical of Shareholders’ Meetings. However, the Articles of Association may also provide for such resolutions (unless related to specified matters) to be taken through more streamlined procedures, such as written consultation or written consent.
Unless otherwise specified in the Articles of Association, standard S.r.l. and simplified S.r.l. management is entrusted to one or more directors appointed by the shareholder(s) themselves. As such, standard S.r.l. and simplified S.r.l.. may be managed by a sole director or by multiple directors. In the latter case, the company may adopt one of the following management systems:
board of directors;
several management;
joint management.
The managing body may be also a corporate body, unless further law provisions setting forth restriction or requirements related to certain type of companies. The articles of association may establish that multiple administration systems are to be used, each for a specific set of issues for which the managing body is called upon to decide. In any event, all directors’ decisions shall be documented in a dedicated corporate book.
In standard S.r.l. and simplified S.r.l. the appointment of a Board of Statutory Auditors (Collegio Sindacale) or a Sole Auditor (Sindaco Unico) is mandatory only if:
the company is required to keep a consolidated balance; or
the company controls or is controlled by a company which is subject to statutory audit (e.g. a Joint Stock Company or S.p.A.); or
for two consecutive years has exceeded the following limits: (a) total assets of the balance sheet: Euro 4,4 millions; (b) revenues from sales and services: Euro 8,8 millions; (iii) workers employed on average during a financial yeare are more than 50 units.
 
The Board of Statutory Auditors (Collegio Sindacale) or Sole Auditor (Sindaco Unico) is an internal supervisory body. It is largely entrusted with the oversight of corporate management in order to ensure compliance with the law, memorandum and articles of association; compliance with the principles of sound administration, in particular the effectiveness of the organizational, administrative and accounting systems adopted by the company, and its effective performance.
The Board of Statutory Auditors (Collegio Sindacale) or Sole Auditor (Sindaco Unico) is appointed by the shareholders’ meeting. The Board of Statutory Auditors (Collegio Sindacale) is composed of 3 or 5 standing members and 2 alternate members. The auditors must satisfy the requirements of integrity, experience, and independence prescribed by law; must be professionally independent from the company, its subsidiaries and parent companies; and must possess technical expertise.
To set up a Limited Liability Company by Quotas the founder(s) shall execute an incorporation deed (including memorandum and articles of association) before an Italian public notary. The incorporation process can be carried out by distance through a power of attorney granted to our firm. In this case the power of attorney shall be notarized and apostilled pursuant to the Hague Convention of 5 October 1961 (or notarized and legalized with a local Italian Embassy or Consulate if your home country is not a member of the apostille convention) and translated into Italian.
Please contact us for more information about company formation in Italy.

A Joint Stock Company (Società per Azioni, S.p.A.) is a limited company by shares. This form of company better suits the needs of large businesses requiring a significant amount of capital.
The initial share capital of a S.p.A. has to be at least € 50,000.00, and is divided into “shares”, that can be physically issued to the shareholders or dematerialized. Capital can be paid up either by cash contribution or, whereby expressly provided in the Memorandum of Association, as an in-kind contribution or contribution of receivables, whose value shall be equal to the amount of capital subscribed.
In case of multiple shareholders, subscribers shall pay up prior to the incorporation of the company at least 25% of the share capital. In case of a single member, the entire share capital shall be paid up prior to the incorporation of the company. Conversely, whereby paid in kind or via transfer of receivables, the share capital is to be paid in its entirety.
Shareholders’ Meeting is the S.p.A.’s sovereign corporate body, i.e. the forum within which its shareholders form their will as to the company, then implemented by the managing body. The shareholders pass resolutions collectively. Resolutions legitimately passed during the meeting are binding for all shareholders, including those absent and those who voted against the resolution passed; nevertheless, in some cases it is possible for such parties to withdraw from the company, following procedures established by law.
In a S.p.A. three different corporate governance systems are available:

⋅ Italian traditional management and control system;
⋅ one-tier management and control system (of British inspiration);
⋅ two-tier management and control system (of German inspiration).

In the Italian traditional system, the management of the company will be entrusted to a sole director or a Board of Directors (“BoD”) appointed by the shareholders’ meeting. Directors stay in office for 3 financial years; they may, however, be re-elected, unless otherwise provided in the articles of association. They, also, may be revoked, at any time, through a resolution of the shareholders’ meeting. One or more directors can be appointed as Chief Executive Officer(s) (Amministratore Delegato, “CEO”) by the BoD. The BoD can also appoint an executive committee (Comitato Esecutivo). 
The Board of Statutory Auditors (Collegio Sindacale), instead, is the internal supervisory body of a S.p.A and is appointed by the shareholders’ meeting. It is largely entrusted with the oversight of corporate management in order to ensure compliance with the law, memorandum and articles of association; compliance with the principles of sound administration, in particular the effectiveness of the organizational, administrative and accounting systems adopted by the Company, and its effective performance.
The Board of Statutory Auditors, therefore, supervises:
the activities of the BoD, attending the board meetings;
the activities of the shareholders’ meeting, attending the meetings with the power to challenge the resolutions adopted against the law or the articles of association.
A first alternative to the traditional system is the one-tier system. The latter provides a governance system substantially similar to the traditional one, except that there is no Board of Statutory Auditors; instead, there is a Management Control Committee (Comitato per il Controllo sulla Gestione) appointed within the BoD. Members of the Management Control Committee are directors who do not perform management functions. As for its tasks, the Management Control Committee performs functions that are similar to the ones exercised by the Board of Statutory Auditors in the traditional governance system.
In companies that adopt the two-tier system, the management function is entrusted exclusively to the Management Board (Consiglio di Gestione). The control function is, instead, exercised by the Supervisory Board (Consiglio di Sorveglianza).
The Management Board is composed of at least 2 members, who stay in office for 3 financial years. 
The members, unlike the traditional system, are appointed (and revoked) by the Supervisory Board and not by the shareholders’ meeting.
The Supervisory Board is formed by at least 3 members, appointed (and revoked) by the shareholders’ meeting, who stay in office for at least 3 financial years. Such Board oversees and supervises the corporate management in order to ensure compliance with the law, memorandum and articles of association, compliance with the principles of good administration and effectiveness of the administrative system.
A S.p.A. must have its accounts audited. This can be carried out by the Board of Statutory Auditors only if:

⋅ all members are chosen from the register of auditors, and
⋅ the company is not listed on a stock exchange and is not are considered a “public-interest entitiy”, as defined by art. 16 of the Legislative Decree n. 39/2010 (which transposed European Directive 2006/43/CE) reforming the audit system, and
⋅ the company is not required to draw up a consolidated balance sheet.

Auditors shall express a judgment on the financial statements with a special report and carry out audits during the year. Auditors also have the right to obtain from the directors documents and information useful to perform the audit activities and can carry out inspections, investigations and examination of deeds and documents of the company. Auditors are appointed by the shareholders’ meeting.
To set up a Joint Stock Company the founder(s) shall execute an incorporation deed (including memorandum and articles of association) before an Italian public notary. Incorporation process can be carried out by distance through a power of attorney granted to our firm. In this case the power of attorney shall be notarized and apostilled pursuant to the Hague Convention of 5 October 1961 (or notarized and legalized with a local Italian Embassy or Consulate if your home country is not a member of the apostille convention) and translated into Italian.
Please contact us for moreinformation about company formation in Italy.