How to Set Up an Entity in Italy

Setting up a legal entity in Italy offers meaningful access to a large and sophisticated economy, a strategic gateway to the European Union, and a business environment rich in manufacturing, design, and tech innovation. Italy’s membership in the EU gives foreign investors the ability to tap into a large consumer market, while benefiting from EU-level regulatory alignment.

Although the process is relatively well-defined, setting up an entity in Italy involves multiple bureaucratic steps—including notary-based incorporation, tax and social-security registration, and regional obligations—which can present challenges. But the benefits are compelling: direct access to Italy’s and the EU’s consumer markets, the ability to form local partnerships, and the flexibility to hire and manage employees under Italian employment law.

Disclaimer: This content is for informational purposes only and does not constitute legal, tax, or financial advice. Always consult official sources before acting.

What does “opening an entity” mean in Italy?

In Italy, “opening an entity” involves creating a new company or registering a branch or representative office, followed by registration with the relevant commercial, tax, and social security authorities. This process allows the business to operate as a recognized organization in Italy, able to hire staff, sign contracts, and meet local tax obligations.

Entity overview in Italy

This table summarises the key features of entity formation in Italy. Foreign investors typically use a private limited liability company (S.r.l.) for foreign-owned operations.

Step-by-step guide: How to open an entity in Italy

Step 1: Choose the right structure

Italian citizens and residents can establish a business as an S.r.l. (private limited company) or an S.p.A. (public limited company). The S.r.l. is the most common choice because it offers limited liability, flexible governance, and lower capital requirements, while the S.p.A. is suited to larger enterprises and companies planning to raise capital publicly.

Foreign investors often form an S.r.l. as well, since it allows full foreign ownership and straightforward management. They may also opt for a branch, which operates as part of the parent company, or a representative office, which can handle liaison and research activities but cannot conduct commercial business.

Step 2: Verify business name availability

You must select a unique company name and check the availability via the local Chamber of Commerce’s business register (Registro delle Imprese). The name should not be misleading, duplicate existing names, and must clearly state the legal form (e.g., “S.r.l”). Registration with the business register is required to reserve the name and formally incorporate.

Step 3: Prepare incorporation documents

You will need to draft and notarise the company’s constitutional deed (Atto Costitutivo) and Articles of Association (Statuto). The required documents typically include:

• The signed deed of incorporation before a notary (Atto Costitutivo)
• Articles of Association (Statuto) defining the company's purpose, share capital, and governance
• Identification documents of shareholders and directors (passport, NIE/Tax-ID if applicable)
• Proof of registered office in Italy
• Declaration of capital deposit (for structures with capital requirements)

Official templates can be requested from the local Chamber of Commerce or your notary. (Note: some service providers offer templates.)

Step 4: Register with the local Chamber of Commerce

Once the notarised documents are ready, you can submit them via the government's online portal operated by the Chamber of Commerce to register the company, obtain the business registration number, and the VAT number. The company becomes legally operational once registration in the Registro delle Imprese is completed.

Step 5: Register for tax and social security

After incorporation, you must register the entity with the Agenzia delle Entrate (Italian Revenue Agency) to obtain the tax identification number (codice fiscale) and VAT (Partita IVA). Employers must also register with the social security authority (INPS) and other employment-related agencies. Registration and declarations must be filed online or through an intermediary.

Step 6: Open a corporate bank account

You’ll need to open a bank account in Italy in the name of the company (or branch) to deposit the share capital and carry out operations. The bank will require the certificate of incorporation, tax ID, identification of directors, and proof of registered address. Local KYC can take some time, and banks may ask for the presence of local representative details. While not always strictly enforced, a local euro account is very useful for operations.

Step 7: Set up payroll and employment compliance

Before hiring employees, you must ensure compliance with Italian employment law: register as an employer with INPS, define employment contracts consistent with national collective bargaining agreements, register employees with social security and withholding mechanisms, and set up payroll systems in accordance with statutory deadlines. You must also manage health insurance, pension contributions, and workplace safety compliance under the Ministry of Labor regime.

Discover how Elemental Enzymes accelerated regulatory approvals and market entry with Deel.

Post-registration obligations

After incorporation, companies in Italy must observe several ongoing compliance obligations:

• Tax and financial reporting: File annual corporate income tax returns (IRES), quarterly or annual VAT returns, IRAP tax returns, and annual financial statements under Italian civil law.
• Corporate registers: Keep up-to-date registers of directors, shareholders, and beneficial owners, and submit changes to the Chamber of Commerce within the prescribed timeframe (typically within 30 days of change).
• Compliance tracking: Use a compliance calendar or service provider to track deadlines for tax payments, VAT filings, employment reporting, and annual general meeting of shareholders.
• Licenses and renewals: Certain sectors require special permits or professional registrations (e.g., manufacturing, financial services, food and beverage)—maintain these licenses and renewals in line with the ministry or local municipality.
• Record-keeping: Retain accounting records, payroll records, HR files, and transaction documents for the minimum legal period (generally 10 years under Italian law).
• Employment law compliance: Adhere to collective bargaining agreements, social security contribution deadlines, data-protection requirements (GDPR), and employment health & safety rules.

Taxes and financial considerations

• Corporate income tax: Resident companies pay IRES at 24% on worldwide income. They also pay IRAP at about 3.9% on regional production value. For fiscal year 2025, certain investments may qualify for a reduced effective rate of 20% if stringent conditions are met (e.g., profit retention, investments in capital goods, employee growth).
• VAT: Standard rate is 22%; reduced and super-reduced rates apply for certain goods and services. In Italy, all companies must register for VAT once they begin operations. The flat-rate regime (which allows exemption from charging and remitting VAT) applies only to individuals—not to incorporated entities such as S.r.l.s or S.p.A.s.
• Payroll/social contributions: Employers must contribute to pension and social security via INPS and must provide mandatory accident-insurance coverage via Istituto Nazionale Assicurazione Infortuni sul Lavoro (INAIL). Under the standard employee pension scheme (AGO), the combined contribution rate applied to salary is currently around 33%, with the employee’s portion recovered through the payslip. Contribution rates vary by sector, size, and contract type. Self-employed persons may incur higher contribution rates, which under other schemes can approach the low-to-mid 20 percent range.
• Accounting standards: Companies prepare financial statements under Italian GAAP (Codice Civile) or IFRS when required (e.g., publicly-listed parent companies). Auditing thresholds apply depending on the size of the company.

Discover how Climate-KIC navigated complex restructuring with Deel.

Expand internationally with Deel

Whether you’re hiring through an EOR or establishing your own local entity, Deel’s all-in-one platform gives you everything you need to expand into Italy—quickly, compliantly, and with confidence. From market entry to ongoing operations, Deel helps you hire, onboard, and manage teams seamlessly from day one.

With Deel, you can:

• Test new regions using Deel’s local entities through our Employer of Record service—hire employees compliantly, delegate payroll and taxes, and access localized employment contracts.
• Open entities with Deel Entity Setup, where our team manages everything—from incorporation and tax registration to coordination with local experts.
• Centralize your compliance and records with Deel Entity Management, including automated filings, calendar reminders, and visibility across all entities.
• Integrate with Deel Global Payroll and Deel HR for compliant payments, benefits, and workforce oversight—all in one platform.

For companies transitioning from the EOR model to owned entities, Deel ensures a smooth handover and consistent compliance every step of the way. Enter new markets, onboard talent, and manage your global workforce—all through one unified platform.

FAQs

How long does it take to open an entity in Italy?
Typically, 10–20 business days (around 2–4 weeks) if documents are in order and notarisation is completed promptly. Find out how long setup takes with our Entity Setup Calculator.

What is the minimum capital required?
For a standard S.r.l.: €10,000 (≈ $10,500 USD). For a simplified S.r.l.: €1 (≈ $1.05 USD). For an S.p.A.: €50,000 (≈ $52,500 USD).

Can foreign companies own 100% of an entity in Italy?
Yes—foreign ownership of 100% is generally permitted under Italian corporate law for S.r.l. and S.p.A. structures.

Do I need a local director or representative?
There is no mandatory requirement for Italian-resident directors in most cases, but the company must have a registered office in Italy and comply with tax residence criteria (e.g., management and control being in Italy).

How much does it cost to register an entity?
Costs include notary fees, registration with the Chamber of Commerce, legal/advisory fees, and initial capital deposit (where applicable). These can run into several thousand euros. Use our Entity Setup Calculator for an estimate.

Can I hire employees before the entity is fully registered?
Typically, non—legal employment of staff in Italy requires the entity or branch to be fully registered and employer registration completed. However, with Deel’s Employer of Record (EOR) service, you can hire employees quickly while your entity setup is in progress.

Can Deel help me open an entity in Italy?
Yes. Deel Entity Setup manages the end-to-end process—from registration to payroll compliance—in over 100 countries, including Italy. Our local experts handle documentation, filings, and legal requirements on your behalf.

Does Deel offer ongoing compliance and payroll support?
Yes. Deel offers both managed services and self-service tools to help you stay compliant.

If you’re using Deel Entity Management, Maintenance, EOR, or Payroll, our team handles payroll, benefits, filings, and compliance obligations on your behalf.

For teams managing their own entities, Deel Compliance Hub makes staying compliant simple by providing real-time regulatory updates, risk alerts, and workforce insights across 150+ countries. Proactively manage compliance with our Compliance Monitor, Workforce Insights, and an AI-powered Worker Classifier, staying ahead of changing employment laws.

Can I switch from Deel EOR to my own entity later?
Yes. Deel supports seamless transitions when you’re ready.