STARTING YOUR BUSINESS IN ITALY
Which corporate structure to choose?
Our team is able to assist clients in choosing the most suitable structure to your needs, taking full advantage of the benefits provided by Italian law.
Find the differences:
- NEW COMPANY (SUBSIDIARY)
The subsidiary is an independent legal entity, fully owned by the foreign company. It has a share capital 100% controlled by the parent company. This means that before the dividends can be distributed to the parent company it must fully fulfil all Italian tax liabilities, including any taxation on outbound dividends. The dividend distributed abroad will then be taxed according to the tax regulations of the destination country, which may grant a credit for taxes paid abroad. In the analysis of the tax aspects related to the distribution of dividends from the Italian branch to the parent company, the possible presence of a Double Taxation Convention and the possible applicability of the “Parent-Subsidiary Directive”, which applies to relations between EU countries in order to eliminate double taxation on transactional dividends, will also have to be checked.
The tax rate of the corporate income tax (Ires) is equal to 24%. In order to determine the taxable base for corporate income tax purposes, the starting point is the profit or loss calculated for accounting purposes, as indicated in the financial statements.
The Branch is a permanent establishment that carries out the same business activity as the foreign company. It is independent of the parent company only from a tax point of view, while the parent company retains full responsibility for its assets and legal proceedings. The Branch does not have a share capital and therefore there is no obligation to make any initial payment. It is a real taxable entity, completely independent from the parent company. This means that the Branch is obliged to pay taxes on income produced in Italy in the same way as an Italian limited company is taxed. It is important, before establishing a Branch, to verify any differences between domestic and foreign regulations and the possible presence of a Double Taxation Convention signed by the two States.
The foreign company shall comply, for the exercise of the business through the branch, with the necessary Italian provisions of application and therefore, by way of example, with the provisions relating to the keeping of accounting records, compliance with tax obligations and labour regulations, the need for licences and administrative authorisations prescribed by Italian law; all provisions applicable even if not provided for by the foreign company’s national law.
The notion of permanent establishment is specifically regulated from the fiscal point of view, generally meaning that non-temporary place of business or business centre through which a non-resident commercial enterprise carries on its economic activity, producing income in the territory of another country.
The income produced by the branch, as a permanent establishment in Italy of a non-resident company, is taxable in Italy according to the rules of business income and on the basis of a special profit and loss account.
For non-resident companies, only the income produced in the territory of the State is taxable in Italy, including both income deriving from commercial activities achieved through permanent establishments and those deriving from activities carried out directly by the parent company; and also including, in particular, capital gains deriving from the disposal for consideration of shareholdings in resident companies.
For the purposes of value added tax, with regard to transactions carried out by the secondary headquarters (permanent establishment), it should be taken into account that
- companies resident abroad, or of foreign nationality, which can be assimilated to one of the types provided for by Italian law, are undoubtedly taxable persons for the purposes of value added tax, since the law does not lay down any requirement of residence or nationality for the purposes of this subjectivity
- again according to the law, companies resident abroad, which do not fall within one of the types provided for by Italian law, have in any case passive subjectivity for VAT purposes.
What we offer:
Full assistance during the process relating to the drafting of the documents required for the establishment of the legal entity.
Assignment of the tax code for all shareholders and directors of the legal entity
Drafting of contractual documentation:
- Tailor-made memorandum of association:
The Memorandum of Association must indicate:
- the surname and first name or denomination, date and place of birth or the State of incorporation, domicile or registered office, the nationality of each shareholder
- the name, containing an indication of the type of company chosen, and the Municipality where the company’s registered office and any secondary offices are located
- the activity which constitutes the corporate purpose
- the amount of the share capital
- the contributions of each shareholder and the value attributed to credits and assets contributed in kind
- the participation quota of each member
- the rules relating to the functioning of the company, indicating those concerning administration, representation
- the persons entrusted with the administration and any person appointed to carry out the statutory audit (if appointed)
- the total, at least approximate, amount of formation expenses charged to the company.
- A member of our BUSINESS DEVELOPMENT CENTER helps you to choose the articles of association that best suit the company and the needs of the shareholders
Drafting of the PoA text to be formalised abroad (if required)
Stipulation of the notarial deed at the Italian notary’s office, issue of the certificate of stipulation and registration of the legal entity in the Italian Register of Companies
Activation of PEC certified e-mail for the legal entity
Attribution of the VAT number for the legal entity
You can follow the process remotely, without travelling and at no additional cost: it is possible to incorporate the company by video conference call!!!
Videoconference process to llc company incorporation or establish a branch in Italy
A process completely in videoconference from the first contact to the constitution with the notary.
– A member of our BUSINESS DEVELOPMENT CENTER team will be at your disposal during the entire incorporation process: he will answer your questions and keep you updated on developments during the procedure
Set up a new company or establish a branch in ITALY in just a few steps:
guarantees the safety of a public deed in a virtual room
How it works:
A simple process in which you will be guided by us:
- Start now: Fill out the form, provide some information and describe the business you’d like to start
- We will contact you, providing you with the information on how to establish your srl o your branch
- Electronic signature: An operator issues your electronic signature via videoconference, if you don’t already have one
- Establishment in video call: The shareholders establish the srl during a videoconference session with the Notary
- (Only to set up your srl or innovative start-up online: The shareholders pay the share capital by bank transfer into the notary’s dedicated escrow account. The Notary will send the share capital by bank transfer to the Board of Directors)
- Companies register: The Notary registers the srl o the branch in the Register of Companies