Incorporation of a S.R.L. in Italy

The S.R.L. – Società a responsabilità limitata

An S.R.L. (Società a responsabilità limitata) is a limited liability entity that provides a complete limitation of the liability of the partners for the obligations of the company. It is a ‘smaller scale’ company where the owners, known as ‘quotaholders’, own ‘quotas’ in the company instead of shares (as in an S.P.A., a company limited by shares). The S.R.L., for example, is similar to a Ltd, while the S.P.A. is similar to a Corporation.

Why is it better to choose an S.R.L.?

1.      Lowest initial capital: The minimum capital is only 10,000 Euros

2.      It allows to obtain an Italian VAT number and to be less expensive than an SPA

3.      Flexibility: the participants of an S.R.L. have more freedom to establish the rules of operation, management and organisation

4.      Possibility of modification: if necessary the S.R.L. can be ‘transformed’ into an S.P.A. in the future

Is it necessary to pay in 100% of the registered capital?

-     YES: if there is only one shareholder (100% of the capital must be paid in full)

-     NO: if there are two or more quota holders, they can pay only 25% of the share capital

IMPORTANT: to obtain the approval of the authorities and institutions - banks, suppliers and even customers - it is recommended to have a capital of at least 50,000 Euros for migration purposes.

Can I keep the company inactive?

Yes, but it is not recommended as the tax authorities expect a newly established company to start showing activities after an initial period of 2 years, or they will probably make an assessment and ask for some taxes to be paid.

IMPORTANT: If you plan to sponsor an immigration application through the new company, you must provide documented evidence of economic activity and compliance with labour and social security obligations.

My company has only a few operations per year, do fixed costs apply?

Yes, although operations are limited, some annual recurring costs apply for corporate achievements (drafting of annual financial statements, VAT filings, etc.).

What are the main steps to register an S.R.L.?

The process of setting up a new company can be handled entirely by a consultant, without the need for prospective shareholders to travel to Italy:

1.      Grant a power of attorney to a consultant to attend the notary's meeting in Italy and incorporate the new company (requires notarisation and legalisation by the Italian Consulate/Apostille). A power of attorney is not necessary for the directors of the holding company or the shareholder to attend the notary's meeting in Italy in person

2.      Provide all information/documents required by your consultant

3.      Apply for Italian tax codes for the shareholders and directors of the new company

4.      Transfer funds for the registered capital to the Italian notary's trust bank account (funds must be available in the notary's account on the day of the execution of the incorporation deed)

5.      Company registration: Within 1 to 3 weeks from the date of execution of the deed of incorporation and the articles of association, the new company is registered by the notary at the Chamber of Commerce and is provided with a VAT number. At this time, a PEC email of the new company must be provided to the Chamber of Commerce

6.      Opening the bank account: Once the company is officially registered, the designated director can open the company's bank account and the initially registered paid-up capital is transferred to the company's account and can be used for the company's operations

Can a new company sponsoring work permits for non-EU workers?

Yes, generally speaking a newly established company can sponsor permits to hire employees of non-EU nationality (e.g. EU Blue Card).

However, the immigration office will require that the company is able to demonstrate sufficient financial resources both to pay the worker's remuneration and social security.

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The content of this article is intended to provide general guidance on the topic. You should seek specialist advice on your specific situation.