Which investment structures are typically used by international investors in Italy?

Tommaso Fonti discusses how Bacciardi and Partners can help to facilitate the process:

Depending on the nature of their business activities, foreign companies may need to set up a business presence in Italy.

The representative office (RO) is the simplest business structure.

There are no prior filings or authorisations required, except a communication with the Italian company registry. The RO can only operate for promotional and networking purposes and no trading or production activities are authorised. The RO is usually not subject to corporate income tax.

The branch, similar to the RO, is not a separate legal entity from its foreign parent company, but it can carry on commercial activities on behalf of the foreign parent company. The establishment of a branch requires preparation of certain documents, which must be notarised, legalised and filed with the Italian company registry. Branches of foreign companies carrying on a commercial activity are subject to the same corporate taxes as companies.

The incorporation of a subsidiary as a separate and independent Italian company from its foreign parent requires preparation of specific documents and execution of a notary deed in front of an Italian notary. The main forms of Italian business vehicles used by foreign investors in Italy are the joint stock company (Società per azioni) (SpA) and the limited liability company (Società a responsabilità limitata) (Srl).

The minimum corporate capital for a joint stock company is EUR 50,000, with the corporate capital divided into shares.

The minimum corporate capital for a limited liability company is EUR 10,000, with the corporate capital divided into quotas. The minimum corporate capital can also be lowered to EUR 1, but special rules and restrictions would then apply.

The Srl has a more streamlined (and flexible) governance structure than the SpA. The law applicable to Srls provides for peculiar rules on withdrawal rights and directors liability. The Srl cannot issue bonds, although it can issue debentures, under certain limitations.