Turkish and Italian businesses’ interaction and mutual operations are on the increase, thanks to the development of the economic and commercial relations between the two countries and the Turkish business actors’ increased presence in the international commercial world. In the context of these operations, company establishment procedures play an extremely important role, so much so that, as lawyers who are specialized in company formation in Italy, we frequently receive questions regarding these issues. It is particularly common for Turkish companies planning to engage in long term operations in Italy and Italian companies planning to do business in Turkey to set up overseas companies in both countries. In this note, to provide guidance to investors, we outline the general procedures regarding the establishment of types of companies in Italy and highlight the important points relating to this process.
- Company types regarding Italian Law
As in most other legal systems, there are different types of Italian companies and partnerships that can be chosen depending on the purposes and priorities of the underlying business in Italy. It is therefore important to primarily analyze the needs of the business or the entrepreneur in the company establishment phase, to be able to determine the correct company or partnership type.
The types of companies and partnerships regulated in Italian law are the following;
Limited company (Srl – Societa a responsabilita limitata), joint-stock company (SpA – Societa per azioni), partnership divided into shares (SapA – Societa in accomandita per azioni), collective company (SNC – Societa in nome collettivo), commandite company (SAS – Societa in accomandita semplice), cooperative and sole proprietorship.
The most preferred company types by foreign investors in Italy are:
Limited company (Societa a Responsibilita Limitata – Srl)
Limited company is the most preferred type of company in Italy by foreign investors because it provides more flexibility compared to other company types in both the establishment and management processes. The responsibilities of the partners are limited to their shares in the company in this company type.
Joint-stock company (SpA – Societa per azioni) in Italy,
In Italy, the joint-stock company is preferred for conducting large-scale economic and commercial activities with large numbers of investors who wish to do business in Italy.
Branch offices and representations in Italy,
It is also possible for companies that are established in Turkey to set up a branch or representative office. Doing business in Italy through branches and representative offices is a frequently preferred way by foreign and Turkish investors.
- Company Formation Procedures in Italy
The Company Formation Procedure
Company establishment in Italy consists of the steps listed below and it can be stated that a company can be established on an average of 5-7 business days. The steps listed below can be carried out personally in Italy, or it can also be carried out via Turkish lawyers who speak Italian without having to go to Italy, or through law offices working in cooperation with Italy. ONGUR & Partners Law Firm has been providing legal services relating to company establishment procedures in Italy for more than 15 years in the most effective and reliable way. We deliver fast and effective legal services to both our Turkish and Italian clients thanks to our lawyers based in Milan and Rome in collaboration with our lawyers located in Turkey. Most importantly, we provide the fastest and the most reliable outcomes in preparing the required documents, as our lawyers are also sworn interpreters, especially in Italian and Turkish languages.
- Preparation of Company Articles of Association and Company Bylaws
Within the scope of company establishment procedures in Italy, the bylaws and the articles of association of the Italian company that will be established must be prepared. As in many legal systems, the articles of association of an Italian company contain the issues regarding representation, management, the shares of partners, share types, and transfers.
However, unlike the Turkish legal system, in the Italian system, the articles of association must be prepared by notaries, and together with the bylaws, signed by the partners before a notary public. With the power of attorney issued by our clients to our Italian or Italian speaking Turkish lawyers, we carry out the company formation procedures without the need for our clients to travel to Italy. Following this process, the company established in Italy must be registered in the company registration units at the chamber of commerce located in the region where the company will operate within 30 days. The said registration is also carried out by our lawyers.
- Registration and payment of the company capital
In order for the company’s articles of association to be approved by the notary public, the amount of the subscribed capital must be included in the articles, and the required portion of the said amount must be deposited in the bank account of the Italian company before the approval.
- Obtaining a Tax Number
Similar to the system in Turkey, it is mandatory for real and legal persons who have business operations in Italy to have a tax number given by the Italian government. Tax numbers can be obtained from the Finance Offices or Italian Embassies outside of Italy.
- Obtaining Mandatory books
The Italian legal system requires both S.P.A. and S.R.L.’s books and financial records to be kept. The acquisition and maintenance of these books following the registration process is important in order not to be subject to any sanctions.
- Social security Transactions
After the company establishment procedures in Italy, if personnel needs to be employed, the company’s establishment should also be registered with the Social Security Unit and the Occupational Accidents Insurance Unit.
Branch Establishment Procedure in Italy (Filiale)
Similar to the establishment of a company in Italy, the establishment of branch offices of foreign companies in Italy is also carried out by way of relevant documentation prepared before the notaries.
In order for the branch office to be registered in Italy, it is necessary to submit the resolution of the main company’s board of directors to set up the branch office, the identity of the authorized branch manager, the shareholders’ resolution authorizing the branch manager, the articles of association of the company, as well the certificate of good standing, to the relevant trade registry’s regional directorate.
Following the signing of the declaration of establishment with the documents listed above before the Italian notary public, the establishment of the branch is registered at the relevant chamber of commerce, and that the branch office has commenced its activities is notified to the Revenue Administration. As with all stages of company establishment in Italy, during this phase as well, our Italian-speaking lawyers ensure that these transactions’ are completed quickly and safely.
There is no minimum capital requirement to open a branch office in Italy. It must however be reminded that branches are also subject to the same bookkeeping rules of limited companies in terms of their financial records and keeping their books. It is therefore recommended that Turkish companies wishing to set up branches in Italy obtain financial consultancy services.
Liaison Office Establishment Procedure in Italy (Ufficio di Rappresentanza)
Liaison offices are created by an easier method than companies and branch offices in Italy, and are generally for market research and marketing purposes. For this reason, liaison offices may not engage in income-generating commercial activities.
In order for a Liaison office established in Italy to commence its activities, it must be registered in the Trade Registry. For this registration, the company’s certificate of good standing must be submitted together with the relevant resolution of the company relating to the establishment of the liaison office.
Liaison offices are not subject to bookkeeping or tax obligations to the aforementioned organizations.
- Other Important Issues
Minimum Required Capital Amounts
The amount of the minimum required capital for different company types are as follows:
- Limited companies established in Italy (s.r.l.) have a minimum capital requirement of EUR1. The capital can be paid in cash or in-kind or subscribed. If the subscribed capital in cash is between 1,00-10.000,00 EUR, all of this amount, if it is above EUR 10,000, a minimum of 25% of this amount must be paid during establishment. In addition, if the company is established by a single founder, the entire amount of the capital must be paid during the establishment. Therefore, Turkish companies wishing to establish a company in Italy must clearly determine their founding capital at the outset, and, in case they intend to establish a single-partner limited company, they must deposit the company capital in the company’s bank account during the establishment process.
- The minimum amount of capital for joint-stock companies (S.P.A.) is EUR 50.000,00. At least 25% of the capital in cash, or the entirety of the capital in-kind must be paid during the establishment of the joint-stock company in Italy. In addition, if the company has a single founder, all of the capital must be paid in during the establishment.
There are no nationality, residence, or number limitations for the founders of S.R.L. ‘s and S.P.A.’s established in Italy. That being said, only real persons can hold the title of shareholder in S.R.L.s with capitals between EUR1-10.000,00. As a result, it is not possible under Italian Commercial Law for legal entities to have the titles of founder or partner if the company’s capital does not exceed EUR 10.000,00.
The matters relating to the management of companies in Italy are very flexible and can be determined by the founders of the company in the articles of association. Thus, it is possible to appoint one or more managers, to authorize these managers with respect to certain operations or departments, or to authorize them to exercise their powers individually or jointly.
In addition to the above, there are no conditions such as being a company partner; being a citizen of Italy, or being a resident in Italy for the persons to be appointed as company managers in the companies established in Italy, 
 In this respect, only the condition of reciprocity is sought for the citizens of non-EU states.