How to open a Company in Italy as an American

Often times clients ask us the easiest way to form a company in Italy. There are many different entities types in Italy, and they do not reflect American customs very closely. Over the last decades entity forms have slowly converged but there remains substantial differences between the US and Italian systems.

Firstly, we need to pick an entity type:

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Quick Summary of Entity Types in Italy

Italian Entity Type	U.S. Equivalent	Limited Liability	Separate Legal Entity	Corporate Taxation
SRL (Srls)	LLC or S-Corp	✅ Yes	✅ Yes	✅ Yes (IRES)
SPA	C-Corp	✅ Yes	✅ Yes	✅ Yes (IRES)
SNC	General Partnership	❌ No	❌ No	❌ (partners taxed)
SAS	Limited Partnership	Mixed	❌ No	❌ (taxed at partner level)
Ditta Individuale	Sole Proprietorship	❌ No	❌ No	❌ (personal tax)
Cooperativa	Cooperative	✅ Yes (mostly)	✅ Yes	✅ Yes (with benefits)
ETS / APS / ONLUS / Foundation	Non-Profit	✅ Yes	✅ Yes (with public act)	✅ (often exempt)

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1. SRL – Società a Responsabilità Limitata

Best for: Small to medium-sized businesses, freelancers, startups

Comparable to: U.S. LLC, S- Corp or Private C-Corp (depending on elections)

The SRL is the most popular type of limited liability company in Italy. It has a flexible structure, low minimum capital (as little as €1), and limited liability protection. Owners (called soci) are only liable up to the amount of capital contributed.

Key features:

• Pays corporate tax (IRES) at 24% + IRAP (~3.9%)
• Dividends taxed at 26% (with treaty reduction possible)
• Can have one or more shareholders
• Can be managed by shareholders or external directors

 U.S. Note: If you own >50%, the SRL will be a Controlled Foreign Corporation (CFC) for U.S. tax purposes.

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2. SPA – Società per Azioni

Best for: Large companies, raising capital, foreign subsidiaries

Comparable to: Public U.S. C-Corporation

The SPA is a joint-stock company typically used by larger businesses. It requires a minimum capital of €50,000 and is heavily regulated. Shares are more freely transferable than in an SRL.

Key features:

• Suitable for stock exchange listing or major funding
• Strong governance structure with a board of directors
• Subject to statutory auditing

Generally overkill for small businesses or startups.

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3. 

SNC – Società in Nome Collettivo

Best for: Small family businesses or partners with strong trust

Comparable to: U.S. General Partnership

All partners in an SNC are personally and jointly liable for the company’s debts. There’s no corporate tax: income passes through to the partners’ individual returns.

❌ Not recommended for foreigners or anyone wanting asset protection.

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4. 

SAS – Società in Accomandita Semplice

Best for: Silent investor + active manager setup

Comparable to: U.S. Limited Partnership

An SAS has two kinds of partners:

• General partner (accomandatario): has full liability
• Limited partner (accomandante): liability is limited to their capital

Often used when investors want to fund a venture without being actively involved.

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5. 

Ditta Individuale – Sole Proprietorship

Best for: Solo entrepreneurs or freelancers

Comparable to: U.S. Sole Proprietorship

Easy to set up, low cost, but offers no legal separation between the business and personal assets. The owner is personally liable for all debts.

⚠️ Taxed as personal income, and cannot bring in partners.

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6. 

Cooperativa – Cooperative Society

Best for: Collective businesses, agriculture, social ventures

Comparable to: No clear US equivalent

Owned by its members, often workers or producers. Profits are partly reinvested and partly distributed. Offers tax incentives, especially for agricultural or social cooperatives.

🔎 Some forms benefit from indivisible reserves, making them interesting for long-term land or capital projects.

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7. 

ETS / ONLUS / Foundation – Non-Profit Entities

Best for: Charities, cultural associations, religious or educational missions

Comparable to: U.S. 501(c)(3) Non-Profit

Italy has several non-profit categories:

• ETS (Ente del Terzo Settore): newly regulated third-sector entities
• APS, ONLUS: older system, being phased out
• Fondazione: a foundation with assets dedicated to a purpose

🎯 These may be exempt from IRES, can receive donations, and may access public funding, especially in the south of Italy.

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🔍 What Should a U.S. Citizen Consider?

1. Limited Liability Is Key: SRL is your safest and most versatile option.
2. Watch Out for U.S. Reporting: If you own a foreign entity, you may have to file Form 5471, FBAR, or Form 8938.
3. Plan for Withholding Taxes: Dividends paid to you are subject to 26% tax unless reduced by treaty.
4. Choose an Accountant Who Knows Both Systems: Mistakes in classification or filings can lead to penalties in both countries.

Corporate Formation

Because most Americans in Italy will want to form a Srl or Srls let’s go through the steps:

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Step 1: Decide on Key Company Details

Before anything is filed, you need to define:

• Company name (unique and approved by the local chamber of commerce)
• Corporate purpose (oggetto sociale) – what the company does
• Registered office address (sede legale)
• Shareholders – who owns the company, and their percentages
• Director(s) – who will manage the company
• Initial share capital (minimum €1, but usually €10,000+ is recommended)

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📑 Step 2: Draft the Statuto and Atto Costitutivo

You’ll need two documents:

• Atto Costitutivo (Deed of Incorporation, US Articles of Incorporation)
• Statuto (Equiv. to US Operating Agreement or Bylaws)

These define how the SRL will operate. They must include capital structure, governance rules, profit distribution, and powers of directors.

✅ If you’re opening with a standard structure (e.g., two owners, 50/50), many notaries can offer model templates.

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Step 3: Sign the Deed with an Italian Notary

This is the formal incorporation. It must be done in front of an Italian notary (notaio), either in person or via a Power of Attorney (Procura Speciale) if you’re abroad.

Required documents:

• Valid ID/passport
• Codice fiscale (Italian tax code) for each shareholder and director
• PEC (certified email address) for the company
• Anti-money laundering declarations
• Proof of capital payment (either a bank statement or declaration)
• If you do not understand Italian you will need to have either an interpreter or have the documents legally translated.

 If you’re not in Italy, you can give power of attorney to someone else to sign on your behalf. This is done with a procura speciale.We can arrange this for you.

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Step 4: Deposit Share Capital

Capital can be:

• €1–9,999: paid upon formation, but liability is not limited until paid in full
• €10,000 or more: at least 25% must be paid in, unless it’s a single-member SRL, in which case 100% must be deposited

The capital is deposited into a dedicated bank account, usually opened provisionally at a bank and finalized after registration.

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Step 5: Register the Company

The notary submits everything electronically to:

• Registro delle Imprese (Companies Register at the local Chamber of Commerce)
• Agenzia delle Entrate (Tax Agency) for your SRL’s VAT number (Partita IVA)
• INPS/INAIL if you’re hiring employees

📆 Processing time: typically 7–15 days after the notary appointment

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🧾 Step 6: Activate VAT and Accounting Setup

You must:

• Register for VAT (Partita IVA) and choose your tax regime
• Appoint a commercialista (accountant) for ongoing bookkeeping and tax compliance
• Set up electronic invoicing and PEC email

Italy has strict e-invoicing and digital bookkeeping rules—it’s essential to have a professional accountant handle this from day one. This can’t be understated. We’re not aware of any other company that is as strict with invoicing.

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🧳 What if You’re a Foreign Shareholder?

As a U.S. citizen, you can own and operate an SRL in Italy without residency. However:

• You’ll need a Codice Fiscale
• You must appoint a legal representative
• If you’re not a resident or an Italian citizen, some banks may restrict or delay opening business accounts—so plan ahead

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🏦 What About Banking?

After incorporation:

• You can finalize your bank account
• The provisional account becomes fully operational
• You’ll gain access to Italian online banking, card issuance, and payroll systems
• US Persons should be aware that not all banks will accept Americans due to FATCA reporting.

💡 Tip: Work with a business-friendly bank branch or ask your notary/accountant to introduce you.

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📌 Timeline Overview

Task	Approx. Duration
Gather documents	1–2 days
Drafting statuto	2–5 days
Notary appointment	3–7 days
Registration & VAT	7–15 days
Banking & accounting setup	5–10 days

Total: 2 to 4 weeks, but can be faster with good planning

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💡 Pro Tips for U.S. Entrepreneurs

• Consider a Holding Structure: If you plan to own multiple businesses or receive dividends, a holding company(Italian or Irish, for example) may offer tax advantages. We work with both countries.
• Avoid becoming Italian tax resident by accident if you’re only here short-term. Tax residency comes with high costs if you’re not prepared.
• Use a commercialista familiar with U.S. tax law, especially for reporting SRL ownership on IRS Forms 5471 and FBARs.
• Evaluate tax regimes, such as the regime forfettario (if applicable) or reduced IRES rates for reinvested profits.

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Final Thoughts

Opening an SRL in Italy is very doable for U.S. citizens, especially with the right legal and accounting support. Whether you’re launching a local venture or managing international operations, the SRL offers a strong balance of protection, flexibility, and tax efficiency.

Just remember: Italy’s process is formal and legalistic. English language professionals and materials are uncommon, so don’t go it alone—a trusted notary and commercialista will make the difference between frustration and a smooth launch.