What are the Investment Options in Italy?

Starting a company or investing in existing Italian companies by individuals and legal entities residing outside Italy, as well as forming a wholly foreign-owned company, is possible. There are no legal barriers to foreigners forming partnerships or starting a company, branch, or representative office in Italy.

The most common corporate structures seen in Italy are Limited Liability Companies, Simplified Limited Liability Companies, and Joint Stock Companies.

The most frequently established commercial entities by foreign investors in Italy are Limited Liability Companies, where the responsibilities of the partners are limited to their shares. In addition to Limited Liability Companies, commercial structures in the form of branches and representative offices are also preferred investment types because they are considered local units of the parent company abroad and are exempt from financial burdens like Corporate Tax and VAT. Two types of limited liability companies can be established in Italy.

Due to organizational flexibility and limited liability, limited liability companies are one of the most commonly preferred types of companies in Italy. In a limited liability company structure, even though the partners act in the name and on behalf of the company, they are not personally responsible for the company's obligations and debts. To establish a limited company, the company’s articles of association must be prepared by a notary and reported to the Chamber of Commerce.

In the traditional limited company structure, the minimum required capital amount is 1 Euro. If the capital amount is 10,000 Euros or more, 25% of the registered capital in the company contract must be refunded to the company directors during the signing process of the articles of association. If the capital amount is less than 10,000 Euros, the registered capital must only be paid in cash and must be fully paid at the approval stage of the articles of association.

For the simplified limited company established to support entrepreneurship in Italy, it is requested that the incorporation contract be made by a notary. The company incorporation agreement is prepared by a notary according to a printed model. A simplified limited company can only be established by young entrepreneurs under the age of 35, and it is not possible for legal entities to establish one.

The establishment of a Joint Stock Company, another type of capital company, follows a process similar to that of the traditional limited company. The minimum capital required for a Joint Stock Company is set at 50,000 Euros. Both Limited Liability Companies and Joint Stock Companies are similar in nature, and the establishment of both types of companies is accomplished through the signing of a notary-prepared articles of association and reporting to the chamber of commerce.

What are the Opportunities for Starting a Company and Trading in Italy?

The commercial structures most commonly created by foreign investors in Italy are Limited Liability Companies, where the liabilities of the partners are limited to their shares. In addition to limited companies, branches and representative offices are continuously preferred by international entrepreneurs since these are considered local units of the parent company abroad and can operate exempt from financial burdens like Corporate Tax and VAT.

How is the Distribution of Starting a Company in Italy by Sectors?

● Limited company: Due to its listing on the stock exchange, it is the most suitable type of company for significant capital investments. This type of company is characterized by limited liability for all shareholders and the division of capital into shares. The minimum required capital amount at the start is 50,000 €. In the traditional management model, managers are tasked with managing the company. Administrative competence can be granted to a single director or a board of directors.
● Regarding audits, it is mandatory to appoint either an audit firm or an auditor as determined by the Audit Board.
● Partnerships with limited shares: In this company, management authority is assigned to managers with unlimited liability for the company's obligations. There are two types of partners not involved in management: one has personal and joint liability, while the other has liability limited to their contributions.
● Private limited company: It is a type of company for smaller businesses compared to limited liability companies in terms of shares. Partners are not personally liable for the company’s obligations. The minimum capital is 10,000 €, and the company must be established by a notary. There is also a special type of limited company called Srls, which can be established with a minimum capital of 1 € without incorporation costs; however, its incorporation and management contract is determined solely by the shareholders.

What are the Advantages of Starting a Company in Italy?

● Due to its strategic location in Europe, international logistics are easy and less costly.
● Italy has a rich investment culture, and the tendencies to invest are higher compared to most countries.
● There is a potential market situation for investments in Italy.
● There is a strong acceptance towards technology and innovation in Italy.

Reasons to Establish a Company in Italy

Italy is a country that has managed to keep its economy afloat by showing extraordinary resilience against the economic crisis. Thanks to the structural reform program initiated by the government, it aims to make Italy an even more attractive country for foreign investments. Italy ranks as the eighth-largest economy in the world and the second-largest producer in Europe. It offers unique know-how in many key sectors such as automotive, fashion, design, and food/agriculture while also being a leading country in various scientific fields, including neuroscience, robotics, and high-tech archaeology.

The Italian Government's efforts to encourage foreign investments into the country include the Italy Investment Program. The first presentation of this program worldwide was held in 2015 in Istanbul, followed by Ankara and Izmir. Additionally, the Foreign Investments Support Office, established within the Italian Trade Agency’s Istanbul Representation, has been operating to identify the needs of potential investors and support them during their investments. Through all these efforts and initiatives, the interest of Turkish investors in Italy has increased, and it is expected that this interest will continue to grow. In light of these interests, it has become quite lucrative to establish a company in Italy.