VAT in Italy | Italian VAT System Explained

Legal and tax support for international entrepreneurs establishing a business presence in Italy.

Legal and Corporate Support for International Businesses in Italy

Company Formation in Italy

Establishing a company in Italy provides access to one of the largest economies in the European Union and a strategic position within the European single market. Italy combines a strong industrial base, a large consumer market and extensive trade connections across Europe and the Mediterranean.

At the same time, the Italian legal and tax environment can be complex for foreign entrepreneurs. Company formation involves notarial procedures, registration with the Registro delle Imprese, tax identification and compliance with corporate governance and accounting requirements.

Our Italian desk assists international entrepreneurs and companies throughout the entire process — from structuring the appropriate legal entity to completing incorporation and ensuring ongoing compliance with Italian regulations.
Corporate Structures Available in Italy
Structure
Description
Typical Use
S.r.l. (Società a responsabilità limitata)
Italian limited liability company with flexible governance
Most common structure for SMEs and foreign subsidiaries
S.p.A. (Società per azioni)
Joint stock company used for larger enterprises
Investment structures and larger corporate groups
Branch (Sede secondaria)
Italian branch of a foreign company
Expansion of an existing international business
Representative Office
Non-commercial presence for market research
Initial market exploration without operational activity

Legal Requirements for Company Formation

Establishing a company in Italy involves several legal and administrative steps governed by Italian corporate law.

Key requirements typically include:

  1. preparation of incorporation documents and articles of association
  2. notarisation of the incorporation deed before an Italian notary
  3. registration of the company with the Registro delle Imprese
  4. obtaining tax identification numbers (codice fiscale and partita IVA)
  5. registration with social security institutions where employees are hired

Proper preparation of the corporate structure and documentation helps ensure a smooth incorporation process and avoids regulatory complications.
Typical Timeline for Company Formation in Italy
Establishing a company in Italy involves several legal, administrative and tax procedures coordinated between the founders, legal advisors, an Italian notary and public authorities. The process usually takes two to four weeks, depending on the corporate structure and banking procedures.
Initial Project Assessment
The process begins with an analysis of the client’s business activity, ownership structure and intended operations in Italy. At this stage we determine whether the appropriate structure should be an S.r.l., S.p.A., branch (sede secondaria) or another corporate form.
Corporate Structure and Jurisdictional Planning
The corporate structure of the future company is defined, including the identity of shareholders, directors and ultimate beneficial owners. Particular attention is given to cross-border tax implications, permanent establishment risks and the relationship with existing group entities.
Obtaining Italian Tax Identification Numbers
Foreign shareholders and directors must obtain an Italian codice fiscale issued by the Agenzia delle Entrate. This tax identification number is required for incorporation, notarial procedures and corporate registration.
Drafting the Articles of Association
The statuto and atto costitutivo (articles of association and incorporation deed) are prepared in accordance with Italian corporate law. These documents define the company’s corporate purpose, share capital, governance structure and shareholder rights.
Coordination with the Italian Notary
Italian company incorporation requires notarisation. A notaio verifies the identity of shareholders, reviews the incorporation documents and ensures compliance with Italian law before executing the incorporation deed.
Notarial Incorporation of the Company
The company is formally incorporated when the atto costitutivo is executed before the notary. At this stage the share capital of the company (for example for an S.r.l.) is formally declared and the legal entity is created.
Registration with the Commercial Register
Following notarisation, the company must be registered with the Registro delle Imprese, the Italian commercial register administered by the local Camera di Commercio.
Tax Registration and VAT Number
After incorporation, the company must obtain its partita IVA (VAT number) and complete tax registration with the Agenzia delle Entrate. This allows the company to issue invoices and conduct commercial activities.
Opening a Corporate Bank Account
Italian banks require extensive KYC and compliance documentation before opening a corporate account. This typically includes corporate documents, shareholder identification and information about the company’s business activities.
Operational Setup and Compliance
Once the company is registered and the bank account is active, the business can begin operations. At this stage companies typically establish accounting systems, appoint accountants (commercialisti) and ensure compliance with Italian tax and corporate reporting requirements.

Costs of Opening a Company in Italy

The total cost of establishing a company in Italy depends on the corporate structure, the share capital and the complexity of the ownership structure. In most standard cases involving a Società a responsabilità limitata (S.r.l.), the initial costs consist of notarial fees, registration charges and professional advisory services.
Typical Timeline and Costs of Opening a Company in Italy
Stage
Description
Typical Timeframe
Estimated Cost
Initial Consultation
Assessment of the client’s business activity, shareholder structure and entry strategy for the Italian market
1–2 days
usually included in advisory
Corporate Structuring
Selection of the appropriate legal form (typically S.r.l.), definition of governance and shareholder arrangements
2–3 days
EUR 500 – 1,500
Obtaining Tax Identification
Obtaining codice fiscale for foreign shareholders and directors through the Agenzia delle Entrate
1–3 days
EUR 100 – 300
Preparation of Incorporation Documents
Drafting the atto costitutivo and statuto, preparation of corporate documentation
2–3 days
included in legal services
Notarial Incorporation
Execution of the incorporation deed before an Italian notaio, verification of shareholders and company formation
1 day
EUR 1,200 – 2,500
Registration with Registro delle Imprese
Registration with the Commercial Register maintained by the Camera di Commercio
2–5 days
EUR 200 – 500
Tax Registration
Issuance of partita IVA and tax registration with the Agenzia delle Entrate
1–3 days
EUR 100 – 300
Bank Account Opening
Opening a corporate bank account and completing banking compliance procedures
3–10 days
varies by bank
Accounting Setup
Appointment of an Italian commercialista and organisation of accounting and tax reporting
1–2 days
EUR 300 – 800
Operational Launch
Company becomes fully operational and can begin commercial activities
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Corporate Taxation in Italy

Companies operating in Italy are subject to several corporate taxes.

IRES (Imposta sul Reddito delle Società)
Corporate income tax applied at a standard rate of 24%.

IRAP (Imposta Regionale sulle Attività Produttive)
Regional tax on productive activities, generally around 3.9%, although rates may vary by region.

VAT (IVA)
The standard VAT rate in Italy is 22%, with reduced rates applicable to certain goods and services.

International companies must also consider issues such as permanent establishment rules, transfer pricing regulations and withholding taxes on cross-border payments.

Our Services

Our firm supports international clients at every stage of establishing and operating a business in Italy.

  • Corporate structuring and legal advisory

  • Incorporation of Italian companies and branches

  • Preparation of corporate and shareholder documentation

  • Coordination with Italian notaries and public authorities

  • Tax advisory and regulatory compliance

  • Ongoing corporate and legal support

Planning to open a company in Italy?
Please provide some basic information about your project. Our team will review your request and contact you to discuss the appropriate corporate structure.