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Buying A Shelf Company In Italy: What You Need To Know
Buying a shelf company in Italy: the ultimate Guide
Looking to start a company in Italy? Good going! Italy has been opening its doors to foreign investment, and a testament to this is how government provisions in recent years work in favor of foreign investors. But be warned: bureaucratic procedures are not your friend, and they’ll be your first big hurdle in getting your business off the ground.
One of the downsides of opening a brand-new company will be the effort and time that you have to be ready to invest.
Don’t want to wait? Not interested in dealing with bureaucracy? There’s also another solution. If you are looking to bypass the time-consuming, complex elements involved in the process of opening an Italian company or prefer to start your business dealings immediately, your best bet is to buy a shelf company.
What is a shelf company and why buy one?
Essentially, a shelf company, or a ready-made company, is a company that has previously been made and registered and has an already-established VAT number. Substantially, it’s a company that has already been set up and is ready to go but is currently in a dormant, inactive state.
Buying a shelf company will allow you to get right down to business, starting your operations as soon as possible and bypassing the complex bureaucracy involved in opening up an Italian company. As an added bonus, a shelf company will have a clean record, which will ease the process of obtaining credit or doing business arrangements.
Foreign corporations can open shelf companies as subsidiaries, which will be subject to Italian law and accounting practices, or as branches of a parent company, which will report to the country where the parent company is based. A subsidiary is its own entity and will be taxed as such by the Italian government, while a branch is more closely tied with its mother company abroad and must also share the same name.
2 types of companies: the differences between Srl and Spa
The two most common types of companies in Italy are Limited Liability Companies (or in Italian SrL, which stands for "Società a Responsabilità Limitata") (small to medium companies) and Joint Stock Companies (or in Italian SpA, which stands for Società per Azioni) (medium to large companies). Which one you choose depends on the size of your business and your future projections of growth.
The costs associated with opening a shelf company
Buying a shelf company will cost you more than going through the registration process of opening up a new company in Italy. It’s difficult to pinpoint a specific number, because it generally depends on the type and age of the company. Additionally, you’ll also have to pay the notary and associated taxes.
Here are some ballpark figures to give you an idea: For a Limited Liability Company (SrL): €10,000 is the minimum share capital for a subsidiary. If you are instead looking to acquire an Italian branch for your company, there is no minimum capital. You can also set up a SrL with 1€ paid-up capital.
For a Joint Stock Company (SpA): €50,000 is the minimum share capital. Even though the minimum capital is a statutory requirement, a shareholder is required to transfer a minimum of 25% of the paid-up capital.
The process for opening a shelf company
The shareholders of your company must present themselves, in person, before a Notary.
You’ll deposit the necessary amount with the Notary, who will also be in charge of completing the process. In front of him or her, you’ll have to nominate the board of directors or a single director (Amministratore Unico), as well as a legal representative for the company (who may also be a director). Directors may be of any nationality and reside anywhere. However, any directors who are not residents must get a personal tax code (Codice Fiscale).
The process can also be carried by a local accountant with a foreign proxy, and in this case you would not need to be physically present before the notary. This accountant can work on your behalf and aid you in further easing the process of officially becoming the owner of the shelf company, helping avoid the hassle of presenting yourself in person.
After the board of directors is appointed and the transfer of ownership completed, you may make modifications to the company and start engaging in commercial activity.
The company, which may be renamed if you see fit, is required to have a registered office in Italy. With the correct business licenses, a shelf company can carry on its business in any industry.
It’s difficult to encompass the entire process of opening up a shelf company in one brief article. Even though it’s much simpler than opening up a brand-new company, we’ve only just scratched the surface!
If you need any help or have further questions, please feel free to contact us!