The Italian law provides for incorporation of entities of various organizational and legal forms, including those which may be practically attractive for a foreign investor, such as:

• Società per azioni (SPA) - public company limited by shares
• Società a responsabilità limitata (SRL) - private limited liability company
• Società in accomandita per azioni (SAPA) – partnership limited by shares

Società per azioni - SPA

Public company limited by shares (Società per azioni - SPA) may be established by a single shareholder (physical or legal person of any residence) and is characterised as follows:

• minimum charter capital is € 120’000;
• 25 % of the capital must be paid up upon registration. If the capital is not contributed by monetary assets, an independent expert’s report in Italy is required;
• maximum number of shareholders is not limited;
• both registered and bearer shares may be issued.
• shares may be freely transferred to third parties without the general meeting’s approval;
• company may be managed by both the Board of Directors and the sole director appointed at the general shareholders’ meeting. Directors may be also shareholders of the company;
• company has to appoint both a statutory auditor to do current accounting and to file regular reports, and the Board of Independent Authorized Auditors.

Società a responsabilità limitata  - SR

Private limited liability company (Società a responsabilità limitata  - SRL) may be established by one participant (physical or legal person, resident or non-resident) and is characterised as follows:

• minimum charter capital is € 10’000;
• capital must be paid up upon registration.
• maximum number of shareholders is not limited;
• only registered shares that may not be freely transferred to third parties without the general meeting’s approval may be issued;
• company may be managed by both the Board of Directors and the sole director in accordance with the memorandum of association;
• directors may be also shareholders of the company but this provision must be reflected in the Memorandum of Association because otherwise directors may not be shareholders of the company;
• company has to appoint both a statutory auditor to do current accounting and to file regular reports.

Società in accomandita per azioni - SAPA

Partnership limited by shares (Società in accomandita per azioni - SAPA) is not considered in Italy a legal entity and is characterised by having both limited partners and unlimited partners (general partners) among its owners in respect of the partnership's debts and obligations. General partners determine the management, shares issuance and profits distribution procedure in SAPA. Partnership limited by shares may be established by two physical or legal persons (maximum number of partners is not limited) without paying any capital.

All foreigners (except citizens of the European Union) are required to obtain a work permit in Italy in order to work in their companies.

Below we will discuss only some aspects of corporate taxation which is quite complicated and needs to be carefully reviewed before a potential investor decides to start business in Italy.

All resident companies and partnerships limited by shares in Italy are subject to a federal worldwide profit tax and a regional profit tax. A company domiciled in Italy most of the time of a year is considered a resident of that country.

Non-resident companies and partnerships are subject to federal income tax on income earned in Italy ONLY.

Non-resident companies and partnerships are subject to regional profit tax only if they have been domiciled in Italy for more than 3 months a year.

Dividends, interest and royalty received and paid by Italian companies are always taxed in the light of the double taxation agreements. If the agreement does not work for a particular case, the tax rate may be increased up to 27%.

Italy has a tax policy aimed at tightening measures in respect to companies doing business with offshore companies. According to the Controlled Foreign Company (CFC) Rules, an Italian company making profit through an offshore company (registered in a blacklisted country in Italy) will be subject to double tax: on its profits. This means that it will pay profit tax both at usual tax rates for Italian companies, and additionally at a rate of 27% for offshore companies.

Italy is not a tax heaven or offshore jurisdiction, and a concept of Italian tax exempt company (and/or Italian international business company (IBC), offshore company, trust, foundation etc. registration) does not exist in Italy as such. A company formation in Italy could be arranged with a professional registered agent providing incorporation, virtual office and other corporate services in Italy. To set up a company in Italy is possible by correspondence, but to open a bank account in Italy will, most probably, require a personal visit.

Italy Double Taxation Agreements

Albania, Algeria, Argentina, Armenia, Australia, Austria, Azerbaijan, Bangladesh, Barbados, Belarus, Belgium, Bosnia and Herzegovina, Brazil        , Bulgaria, Canada, Chile, China, Colombia, Congo, Croatia, Cyprus, Czech Republic, Denmark, Ecuador, Egypt, Estonia, Ethiopia, Finland, France, Georgia, Germany, Ghana, Greece, Hong Kong, Hungary, Iceland, India, Indonesia, Ireland, Israel, Ivory Coast, Jamaica, Japan, Jordan, Kazakhstan, Kuwait, Kyrgyzstan, Latvia, Lebanese Republic, Lithuania, Luxembourg, Macedonia, Malaysia, Malta, Mauritius, Mexico, Moldova, Montenegro, Morocco, Mozambique, New Zealand, Norway, Oman, Pakistan, Panama, Philippines, Poland, Portugal, Qatar, Romania, Russian Federation, San Marino, Saudi Arabia, Senegal, Serbia, Singapore, Slovakia, Slovenia, South Africa, South Korea, Spain, Sri Lanka, Sweden, Switzerland, Syria, Tajikistan, Tanzania, Thailand, The Netherlands, Trinidad and Tobago, Tunisia, Turkey, Turkmenistan, Uganda, Ukraine, United Arab Emirates, United Kingdom, Uruguay, USA, Uzbekistan, Venezuela, Vietnam, Yugoslavia, Zambia.

99 classical offshore, onshore and midshore jurisdictions of Europe, America, Middle East, Asia, Africa and Oceania‍