Establishment of a company in Italy by a foreign citizen
A foreign citizen who intends to expand his business in Italy has several options: he can choose to open a secondary office with stable representation or he can decide to set up a new company in Italy.
In the latter case, it is necessary to verify the existence of the "principio di reciprocità" (reciprocity principle) provided for in art. 16 of the disp. prel. of the Italian civil code, according to which the foreigner (natural person or legal person) has the same civil rights attributed to the Italian citizen on condition that the foreign state from which he comes reserves the Italian citizen a right equal to or similar to that which his citizen intends to exercise in Italy.
The verification of the existence or not of the condition of reciprocity is the responsibility of the Italian Ministry of Foreign Affairs, but sometimes this verification is not necessary because it is sure that this condition is respected such as in relation to citizens belonging to the European Union, or to countries with which Italy has signed an international civil rights agreement.
There are various types of companies that can be set up: Società di Persone in which the partners have unlimited liability or Società di Capitali in which the partners have limited liability.
The one most used is that of the "Società a Responsabilità Limitata" (S.R.L.) (it is a limited liability company).
It is composed of a Atto Costitutivo (constitutive act) and a Statuto Sociale (articles of association). The first is the act by which company is created while the second contains the rules that govern company.
Normally a S.r.l. can be set up of one or more partners who can be indifferently natural person and / or legal person.
For its establishment, a share capital of at least € 10,000 must be paid.
In this case, the company can only be incorporated in "ordinary form" (constitutive Act stipulated by the notary and without tax breaks), cash contributions must be paid immediately at least equal to 25%. It is necessary that the entire share capital (if it is a S.r.l. with a single partner) or 25% of it (if it is a S.r.l. with multiple partners) must be paid into a specific dedicated bank account before proceeding with the establishment. It is also possible to confer goods in kind other than money, but they must be transferred immediately when the company is established.
The possibility of setting up a S.r.l. has recently been introduced with reduced capital (Società a Responsabilità Limitata a Capitale Ridotto), i.e. with share capital of less than € 10,000 (provided it is at least € 1). In this case, the contributions must be made in cash and must be paid in full when constituted. The choice to opt for a share capital of less than € 10,000 certainly has the advantage of limiting the risk for partners' liability, but it has the disadvantage of enjoying poor economic credibility, with the consequent difficulty of obtaining credit from banks.
If the partners are only natural people, they can opt for the creation of a Società a responsabilità Limitata Semplificata (S.R.L.S) (simplified limited liability company), which has the advantage of not having initial costs (no notary costs, no stamp and secretarial costs), but it implies severe limitations since it can be created using only a standard model in which it is not possible to insert different clauses or modify the majorities established by law, nor to be able to customize the operating rules according to the needs of the shareholders.
As already mentioned, the establishment of a S.r.l. it must be done by public deed, which must therefore be drawn up before a notary. Depending on whether the partner is one or more than one, it will be a unilateral act or a contract.
Before going to the notary for the establishment of the company, it is necessary to ensure that certain formalities required by law have been observed.
In particular, the founding partners of the new company must have the Italian tax code. They can get it by going to the Agenzia delle Entrate office.
In the event that the partner of the Italian company being formed is a foreign company, it will be necessary for the latter to grant a specific natural person the power to act on his behalf, to represent it and to set up a company in Italy. Furthermore, the founding partners need not necessarily be present at the time of the constitution before the notary, being able to alternatively delegate another trusted person with a power of attorney for this purpose.
For the establishment of the company it is necessary to establish the contents of the Statuto Sociale (articles of association) such as: the company name, the registered office of the company, the duration, the share capital, the duration of the financial years and the administration if it is up to a single person or to a board of directors.
In addition, the Articles of Association of the company containing the operating rules of the same must be drawn up. In particular, the Articles of Association must accurately describe the corporate purpose of the company, determine the methods for transferring the company shares, the methods for exercising the partners' right of withdrawal, determine the aspect relating to the revocation of the directors and, above all, the methods conducting the partners' meetings and the constitutive and deliberative quorums; it must then contain all those elements that allow a foreign citizen, according to specific circumstances, to effectively manage the company from abroad in compliance with Italian laws (for example, the holding of meetings and the meetings of the board of directors also in a different place from the registered office, possibly also abroad).