Luigi Bendi and Gianluca D'Agnolo
Chiomenti Studio Legale
luigi.bendi@chiomenti.net, gianluca.dagnolo@chiomenti.net
Joint Ventures
It is possible to establish Joint Ventures both in the form of limited liability companies (Società di Capitali) and partnerships (Società di Persone), with different incorporation procedures and related cost and fees.
A foreigner has no restriction in managing or being represented in a company in Italy. However, for certain sectors (such as airlines) Italian law may require that the majority of the capital is held by Italian or European Union (EU) individuals or companies and that the majority of the directors are from Italy or from the EU.
Limited Liability Companies
The most common types of limited liability companies are: the Società per Azioni (S.p.A.) and the Società a Responsabilita’ Limitata (S.r.l.).
The S.p.A. usually applies to medium and large companies - it is a company incorporated by means of a public deed filed at the Chamber of Commerce’s Companies Register. With the exception of some special sectors, the minimum statutory capital for a S.p.A. is €120,000 (US$177,300).
As per its corporate governance, the shareholders of a S.p.A. may choose among three different structures:
(i) the shareholders appoint a Board of Directors (or Sole Director) and a Board of Statutory Auditors (accounting experts responsible for the supervision over the company’s management); with the exception of small unlisted companies, auditing is entrusted to an external auditor or an auditing firm; or
(ii) the Board of Directors, appointed by the shareholders, elects among its members an Audit Committee (Comitato di Controllo). An external auditing body must supervise the company’s accounts; or
(iii) a Supervisory Board (Consiglio di Sorveglianza), appointed by shareholders and responsible for supervising the company’s management, appoints a Management Board (Consiglio di Gestione), with managerial authority. An external auditor may be appointed to supervise the company’s accounts.
The form of the S.r.l. mainly applies to small and medium companies. The minimum statutory capital for a S.r.l. is €10,000, and it may be managed either by a Board of Directors, by one director, or by a multiple of directors but are not acting as a committee, which may operate severally or jointly as in partnership-type companies. A Board of Statutory Auditors is not usually required if the company does not exceed certain parameters as set by the law.
The main costs for the establishment of an Italian company (with standard bylaws) and for a branch are related to Public Notary and legal fees. Registration tax would be payable at the flat rate of €168 (plus certain minor duties for the filing of the deed of incorporation with the Chamber of Commerce’s Companies Register). In the event that goods or assets are contributed in kind to the company, then the contribution will be subject to the (proportional) indirect taxes applicable to the transfer of the relevant goods and assets.
The standard procedures for the establishment of a S.p.A. and a S.r.l. usually require a few days, unless (in sectors like banking and insurance) prior approval from governmental authorities is required.
Partnerships
Partnership-type companies are Società Semplice, Società in Nome Collettivo, and Società in Accomandita Semplice, with joint and unlimited liability of their partners.
The Società Semplice is a partnership-type company which may carry out non-commercial activities (eg agricultural business). Its management is entrusted to each of its shareholders. No minimum capital is required for its incorporation and its profits are taxed at the partner’s level.
The incorporation of a Società in Nome Collettivo is usually not subject to any particular formalities; there is no minimum capital requirement and one or more directors may manage the company, with in essence unlimited powers.
In a Società in Accomandita, there are two types of partners: the Accomandanti with limited liability and without managing powers and the Accomandatari, fully and jointly liable and with managing powers; the participations may be represented by shares (Società in Accomandita per Azioni) or recorded in the deed of incorporation (Società in Accomandita Semplice)
Subsidiaries/Branches/Representative Offices
Italian subsidiaries of foreign companies are subject to the provisions of law applicable to national entities with certain requirements for disclosure and holding company liability.
A branch office, being a part of its foreign parent company and having no independent legal status, shall fulfil all requirements applicable to the parent company together with the Italian law applicable to foreign-owned branches, with special regard of information disclosure.
A representative office can be easily established in Italy and may be convenient from a fiscal stand point, but its customary activities are limited to collecting information, conducting market research and promoting the foreign enterprise’s name and brand.
Trusts and Other Fiduciary Entities
There is no national legislation in Italy regulating trusts, but Italy has ratified the Hague Convention. Italian jurisprudence has confirmed the validity and enforceability of transactions performed by foreign trusts in Italy, and Article 2645 ter of the Italian Civil Code allows the formation and execution of destination acts.
Società Fiduciarie (fiduciary companies) are authorized pursuant to the provisions of the Ministerial Decree of January 16 1995 which provides for specific capitalization and corporate requirements that must be fulfilled by the fiduciary companies in order to perform their activity in Italy.
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