Offshore Company in Italy

1. Why Italy?

Founding member of European Union, Italy is the seventh economic system in the World (GDP 2009: 2.313.893 millions of US$) and one of the most important exporters. Two-thirds of Italy's Gross Domestic Product (approximately 69%) is represented by the services sector, whose strong point is tourism. Approximately 29%of the national income is owing to industry (including the construction sector) and the remaining approximate 2% derives from agriculture. The strongest industrial sectors are machinery and apparel/textiles. One of the Italian system's peculiarities lies in an "industrial cluster" model, well-established in a clearly defined are and consisting of a dense fabric of small and medium sized enterprises, each specialized in a specific phase of production. There are a lot of specific entrepreneurial expertise with a great potentiality but limited by the small size of their organization. Due to long lasting history of friendly contact Italy is fully open to foreign investors.

2. Legal Framework

It is based on the constitution stating that private economic initiatives are free and shouldn't interfere and be against social utility. The legal system is integrated in the EU system and agreements and companies are basically regulated by the Civil Code. Italian law places no restrictions on foreign investments: this general principle can be limited on reciprocity basis.

3. Banking

Central Bank is Banca d'Italia that is part of European System of Central Banks and is in charge of the control of the finance system. In the banking sector after a concentration process a few large Italian Banks together with international banks have very large market shares. Credit services are at the top worldwide level.

4. Financial Regulatory Authority

Listed companies are under the control of CONSOB, banking system of banica d'Italia and insurance companies of ISVAP. Large M&A operations are under the control of Antitrust Authority. Economic sectors like energy and communication are under the control of specific authorities.

5. Taxation

5. a. Corporate Tax 

Corporate Tax (IRES) rate is 27.5% with a limited deduction of interest and a participation exemption system. Regional Tax (IRAP) rate is 3.9% with a limited deduction of labor cost and no deduction of interest allowed.

5. b. Personal Tax Rates 

Italian residents are taxed on their worldwide income and a tax credit is granted for foreign incomes. Personal Income Tax (IRPEF) rate is gradual from 3% up to 43% and there are also limited regional and local taxes. No Wealth Tax is provided in Italy.

5. c. Social Security

Social security system (INPS) is mandatory for all workers and the National Health System (SSN) basically takes care of all citizens and of other residents on demand.

5. d. Customs & Excise Duties

Since Italy is member of European Union customs and Excise duties are harmonized according to EU law.

5. e. V.A.T.

VAT system is based on EU 2006/112/CE Directive. Ordinary rate is 20% and reduced 10% and 4% rates are provided for the law. Exemption is related to financial services, health care and education.

5. f. Tax Incentives

Flat 12.5% rate is provided with reference to personal income tax related mainly to dividends, interests and cappital gaions. Inheritancs Tax rate is stated from 4/%  to 8% accordding to degree of kinship. Inheritance Tax is levied for spouse and direct line heirs only on any value exceeding euro 1.000.000 for each heir. Inheritance Tax is not applicable also with reference to company's shares if heirs work in the company or hold the control of the company for more than 5 years.

Notes: A strict monitoring of assets abroad belonging to residents of Italy is provided for the law.

6. Main Types of Corporate Forms

Companies can be distinguished into the following types:

1.  Partnerships

  - informal partnerships (Societa semplice)

  - general partnerships (Societa in nome collettivo)

  - limited partnerships (Societa in accomandita semplice)

2.  Companies

  - limited liability company (Societa a responsabilita limitata), minimum comp[any capital Euro 10.000

  - company limited by shares (Societa per Azioni), minimum company capital Euro 120.000

  - limited partnership with share capital (Societa in accomandita per azioni), minimum company capital Euro 120.000

3.  Cooperatives based on the principle of mutuality

  - cooperatives (Societa cooperative)

  - mutual issuance companies (Mutual assicuratrice)

7. Company Incorporation

The articles of association need a notary act the basic elements of the company and the by-laws. new enterprises must register with the Register of Companies (through the chamber of commerce), notify the tax authorities and register employees with the relevant social security authorities. The registration process can be carried out in  a few days after the notary deed. It is possible for companies to have only one shareholders if correctly registered with the register of companies . Foreign companies can register with Italian Register of companies as branches on the basis of a deed translated into Italian and legalized in Italy. Special laws also apply to banks, insurance companies , investment and trust firms.

8. Reporting & Auditing

With in 120 days from the end of the financial year the financial statements together with their reports of directors and statutory auditors must be approved by the shareholders and filed with the Register of Companies. S.P.A and large S.R.L must appoint a board of statutory auditors in charge of the compliance with law and company's by-laws and the auditing of account. Complete auditing is mandatory for listed companies.

9. Special Notes / Country Update

There is a full disclosure referring to articles of association by-laws, directors, shareholders, financial statements with annual reports of management and auditors and minutes of ordinary meetings of shareholders approving the financial statement  and all extraordinary meetings of shareholders. For S.P.A by-laws may provide that the management and control be carried out alternative by system based on a board of directors and a board of statutory auditors, by a system based on a management board and on a supervisory board and a system based on the board of directors and on committee formed with in the board of directors. relationships with tax Authority and Chamber of commerce are web based. The Stock Exchange was merged with LSE. It encouraged the listing of Italian Companies especially the small/medium ones. Now Italian companies have an easy and direct access to LSE AIM market: "the most successful growth market in the world.


Double Taxation Agreement


Italy has Double taxation treaty with different countries:

• Argentina
• Austria
• Brazil
• Bulgaria
• China
• Cyprus
• Czech Rep.
• France
• Germany
• Hungry
• India
• Indonesia
• Israel
• Japan
• Kuwait
• Malaysia
• Malta
• Mauritius
• Mexico
• Morocco
• Netherlands
• Poland
• Portugal
• Romania
• Russia
• Singapore
• Slovenia
• Spain
• Switzerland
• Tunisia
• Turkey
• UAE
• USA
• Venezuela