Setting up an S.r.l. in Italy: A 2026 practical guide

What are the main options to incorporate a limited liability company (S.r.l.) in Italy?

The two main limited liability options in Italy are the traditional S.r.l. (Società a responsabilità limitata) and the simplified S.r.l. (S.r.l.s - Società a responsabilità limitata semplificata). Both give shareholders limited liability, but they differ in capital requirements, flexibility and setup cost, which makes the traditional S.r.l. the default choice for serious foreign investments.

In Italian corporate practice, an S.r.l. is the workhorse company for SMEs and subsidiaries, roughly equivalent to a private limited company or LLC in other jurisdictions. It is governed by the Italian Civil Code (Codice Civile), mainly articles 2462 to 2483, and must be incorporated by notarial deed and registered with the Companies Register (Registro delle Imprese) at the local Chamber of Commerce (Camera di Commercio).

Typical scenarios where an S.r.l. is used

• Italian subsidiary of a foreign group (holding 100 percent of the shares or through a local JV partner).
• Local entity for trading, services, tech, real estate SPVs and professional practices with some scale.
• Vehicle for attracting investors while keeping control through tailored governance rules.

Key legal authorities involved

• Notary (Notaio) - drafts and executes the incorporation deed and articles, authenticates signatures.
• Companies Register (Registro delle Imprese) - maintained by the local Chamber of Commerce; where the company is registered and filings are kept.
• Agenzia delle Entrate - issues the tax code (codice fiscale) and VAT number (partita IVA).
• INPS - social security authority, required if you employ staff or if certain directors fall under Italian social security.
• INAIL - accident insurance authority, for activities that involve workplace risk.

How do traditional S.r.l. and simplified S.r.l. (S.r.l.s) compare?

A traditional S.r.l. requires higher share capital and notary costs but offers much more flexibility in governance, financing and investor types. A simplified S.r.l. (S.r.l.s) is cheaper to set up with capital from 1 euro, but it uses a mandatory standard form, allows only individuals as shareholders and is often viewed as less robust by banks and business partners.

For foreign investors planning a meaningful or long-term presence, the traditional S.r.l. is usually the better fit, especially if you may bring in corporate investors, use shareholder agreements, or seek bank finance. An S.r.l.s can be useful only for very small ventures with one or a few individual founders and no need for sophisticated governance.

Core legal differences

Pros and cons for foreign investors

• Traditional S.r.l. - pros:
  • Suitable for corporate groups and professional investors.
  • Broad flexibility to align governance with shareholders' agreements.
  • Better image in banking relationships and B2B contracts.
• Traditional S.r.l. - cons:
  • Higher upfront capital (in practice) and incorporation costs.
  • More legal drafting work with the notary.
• S.r.l.s - pros:
  • Very low capital requirement and lower notary costs.
  • Faster to set up for simple, small ventures with individual shareholders.
• S.r.l.s - cons:
  • No corporate shareholders, so unsuitable for most foreign group structures.
  • Rigid governance and documentation, harder to adapt to investor needs.
  • Risk of banks perceiving it as a "micro" or entry-level structure.

What are the key steps to incorporate an S.r.l. in Italy as a foreign investor?

You incorporate an Italian S.r.l. by obtaining tax codes, drafting the articles with a notary, signing the notarial deed, paying in the share capital and registering the company with the Companies Register. With proper preparation, foreign investors can complete incorporation and initial tax registrations in roughly 2 to 4 weeks, although banking and operational setup may extend this to 6 weeks or more.

Most delays arise where shareholders or directors are not resident in Italy, where documents require legalization/apostille, or where banks and notaries request extra KYC documentation. Early coordination between your notary, accountant and bank significantly speeds things up.

Step-by-step incorporation process

1. Structuring decisions
   • Choose between S.r.l. and S.r.l.s, considering shareholders, capital and bank expectations.
   • Decide registered office address (domicilio) and main business activity (ATECO code).
   • Define shareholding percentages, management model (sole director, board) and any special rights.
2. Obtain Italian tax codes (codice fiscale)
   • Each shareholder and director must have a codice fiscale.
   • Foreign individuals can obtain it at the Agenzia delle Entrate or through the Italian consulate abroad, or via a local intermediary with a power of attorney.
   • Foreign companies must obtain an Italian tax code for the shareholder entity.
3. Prepare corporate documents
   • For foreign company shareholders: provide certificate of incorporation, good standing, and corporate resolutions authorizing the investment and appointment of the representative.
   • Have foreign documents legalized or apostilled and translated into Italian, unless exempt under EU rules.
   • Discuss a tailored draft of the articles of association (statuto) with the notary.
4. Appoint the notary and sign the incorporation deed
   • The notary prepares the deed of incorporation and the articles of association.
   • Shareholders (or their attorneys under power of attorney) and the initial directors sign before the notary.
   • For S.r.l.: at least 25 percent of the share capital is usually paid into a temporary bank account or deposited to the notary, unless there is a sole shareholder, in which case full payment is required.
   • For S.r.l.s: 100 percent of the capital must be paid in cash on incorporation.
5. Registration with the Companies Register
   • The notary files the incorporation deed electronically with the Registro delle Imprese.
   • Registration normally occurs within a few business days, depending on the local Chamber of Commerce.
   • Once registered, the company obtains an Italian company identification number that is also its tax code.
6. Tax and social security registrations
   • Your accountant (commercialista) activates the VAT number (partita IVA) with the Agenzia delle Entrate.
   • Where relevant, you register with INPS and INAIL, especially if you will hire employees soon.
   • You also register the company's PEC address with the Companies Register.

Typical incorporation costs and timing

These figures are indicative and vary by region and complexity, but they give a realistic order of magnitude for planning purposes.

How do PEC and digital signature work for an Italian company?

A PEC (posta elettronica certificata) is a certified email address that has full legal value as registered mail in Italy, and every company must have one registered with the Companies Register. A digital signature (firma digitale) is an electronic certificate used to sign filings and contracts; at least one director or authorized representative must hold one for the company to operate smoothly.

Without a functioning PEC and digital signature, your company cannot properly interact with authorities, file annual accounts, manage many tax formalities, or activate and manage e-invoicing. Foreign directors can obtain both, but it usually requires either an Italian ID or an in-person or video identification with a qualified provider.

PEC (Certified Email)

• Purpose: official communication channel with courts, tax authorities, Companies Register, and many private parties.
• Providers: several authorized Italian providers (e.g. Aruba, Legalmail, etc.).
• Setup:
  • Usually managed by your accountant, lawyer or incorporation agent.
  • A PEC address must be included in your initial company filings and kept up to date.
• Cost: typically 20 - 80 EUR per year, depending on provider and storage size.

Digital signature (Firma Digitale)

• Who needs it:
  • At least one director or legal representative, for filings at the Companies Register and tax authorities.
  • Often your local accountant will also use their own digital signature for some operational filings.
• How to obtain it as a foreigner:
  • Through qualified Italian certification authorities, either in person, via video identification or at some Chambers of Commerce.
  • You will need a valid passport or EU ID card and your codice fiscale.
  • Some providers offer remote issuance specifically for non-residents.
• Cost: often 50 - 100 EUR for a 2-3 year certificate, plus any hardware token or smart card reader if used.

In practice, most foreign investors delegate routine filings to a local accountant using their own firma digitale while ensuring at least one company officer also has a digital signature for key decisions and contingencies.

How can a foreign director open a corporate bank account in Italy?

Opening a corporate bank account in Italy as a foreign-controlled S.r.l. is often the most challenging step, due to strict anti-money-laundering (AML) and know-your-customer (KYC) rules. Italian banks typically require full documentation on shareholders and directors, clarity on the business model, and sometimes insist on at least one Italian-resident director or signatory.

Lead times of 2 to 6 weeks are common, and some banks may simply decline higher-risk or complex cross-border structures. Starting early, involving a bank used to foreign clients and preparing detailed documentation makes a significant difference.

Typical bank requirements

• Corporate documents:
  • Notarial deed of incorporation and articles of association.
  • Recent company extract from the Companies Register (visura camerale).
  • Board or shareholders' resolution naming authorized signatories.
• Shareholder and director identification:
  • Passports or EU ID cards of all directors and beneficial owners.
  • Codice fiscale for each individual.
  • For corporate shareholders, full corporate chain up to ultimate beneficial owners, with certificates and organizational charts.
• Business information:
  • Detailed description of activities, main products or services and target markets.
  • Project business plan or financial projections for the first years.
  • Expected volumes of incoming and outgoing transfers, and key counterparties.

Practical hurdles for foreign directors

• Some banks require in-person presence of the legal representative to open the account, although video KYC is slowly expanding.
• Non-EU directors and ultimate beneficial owners may trigger enhanced due diligence and requests for extra documentation (tax residency confirmations, source of funds, etc.).
• Certain banks are reluctant to open accounts for companies with no Italian-resident directors or physical presence (office, staff), especially if activity is mostly cross-border.

Strategies to improve your chances

• Ask your notary or accountant to recommend banks that regularly work with foreign investors.
• Prepare a clear, well-structured package in English and Italian explaining your group, business rationale for Italy and compliance policies.
• Consider appointing an Italian-resident director or co-signatory, at least temporarily, to make KYC easier.
• Start the account opening process as soon as you have the incorporation deed, rather than waiting for full operational readiness.

How do VAT registration and electronic invoicing work for an Italian S.r.l.?

An Italian S.r.l. must obtain a VAT number (partita IVA) from the Agenzia delle Entrate and, in nearly all cases, must issue and receive invoices electronically via the national SdI platform. Your accountant usually handles the filings and e-invoicing setup, but directors should understand the basic obligations and timelines.

VAT registration is usually quick if the structure is straightforward, whereas e-invoicing requires selecting software or an intermediary, activating the PEC and ensuring that your invoices follow the required XML format and coding (including ATECO codes and tax breakdowns).

VAT registration (Partita IVA)

1. Filing the application
   • Your accountant files form AA7/10 (for entities) electronically with the Agenzia delle Entrate.
   • Information includes registered office, ATECO activity code, tax regime and details of directors and shareholders.
2. Processing time
   • Often within a few days for low-risk activities and straightforward structures.
   • For foreign-controlled companies, the tax office may request additional documentation or a meeting to confirm that the business is real and active in Italy.
3. Outcome
   • You receive a VAT number which is used on all invoices and tax communications.
   • The VAT number is typically the same numeric code as the company's tax code.

Electronic invoicing (Fatturazione Elettronica)

• Who must use it:
  • Almost all VAT-registered entities in Italy, including S.r.l. and S.r.l.s, for domestic B2B and B2C invoices.
  • E-invoicing is mandatory for invoices to public administrations and, in practice, for most cross-border flows via specific procedures.
• How it works:
  • Invoices are generated in XML format and sent through the government's Sistema di Interscambio (SdI).
  • You can use dedicated invoicing software, your accountant's platform or an intermediary to generate and transmit invoices.
  • Each customer has either a PEC address or a specific recipient code (codice destinatario) used to route invoices.
• Compliance points:
  • Invoice numbering must be consecutive and continuous per tax year.
  • VAT rates and exemptions must be correctly coded using standard XML codes.
  • Time limits apply: usually you must issue the invoice within 12 days from the transaction date for domestic supplies.

What are the ongoing corporate and compliance obligations for an Italian S.r.l.?

Once incorporated, an Italian S.r.l. must keep proper accounts, file annual financial statements, hold at least one shareholders' meeting per year and comply with tax, social security and corporate filing obligations. These requirements apply regardless of the size of the business, although some simplifications exist for smaller companies.

Foreign investors should budget not only for initial setup but also for steady annual compliance costs and deadlines to avoid penalties and reputational issues.

Corporate governance and filings

• Annual accounts:
  • Prepare financial statements as of 31 December (or other approved year-end).
  • Directors approve draft accounts and call the shareholders' meeting.
  • Shareholders must approve the accounts within 120 days (or 180 days in certain cases) after year-end.
  • File approved accounts with the Companies Register within 30 days of approval.
• Corporate books:
  • Maintain a shareholders' register and minutes books for shareholders' and directors' meetings.
  • Record major decisions as formal resolutions, especially those affecting capital, governance, or strategic transactions.

Tax and social security obligations

• Corporate income tax (IRES) and regional tax (IRAP):
  • Corporate income tax (IRES) is levied at a standard rate (subject to legislative changes).
  • Regional production tax (IRAP) also applies based on value produced in the region.
  • Annual returns and advance payments must be filed and paid according to deadlines set by the Agenzia delle Entrate.
• VAT:
  • Periodic VAT settlements (monthly or quarterly) and an annual VAT return.
  • Timely payment of VAT balances to avoid penalties and interest.
• Employees:
  • Payroll processing and related filings to INPS and INAIL.
  • Correct application of Italian labor law and collective bargaining agreements.

Substance and permanent establishment risks

For foreign groups, it is critical that the Italian S.r.l. has real substance where needed: local decision-making, staff, and presence appropriate to the business. Tax authorities may challenge artificial structures and may consider profits attributable to Italy if key functions are effectively carried out there, even if contracts are signed abroad.

Aligning board composition, decision-making processes and operational presence with tax structuring advice helps manage permanent establishment and transfer pricing risks.

When should you hire a lawyer or local expert in Italy?

You should involve an Italian lawyer and a local accountant as soon as you decide to incorporate an S.r.l. or S.r.l.s, especially if there are foreign shareholders, cross-border flows or financing needs. Local experts reduce the real risk of rejected filings, bank refusals and non-compliance with Italian corporate and tax rules.

Trying to replicate procedures used in other jurisdictions usually does not work in Italy, where notaries play a central role and authorities expect very specific formalities and documents.

Situations where a lawyer adds clear value

• Designing the share structure, governance rules and shareholder agreements for joint ventures or multi-investor setups.
• Adapting group policies to Italian rules on directors' duties, related party transactions and corporate interest.
• Handling corporate approvals, board minutes and filings for capital increases, financing and M&A transactions.
• Advising on permanent establishment, cross-border services and branch vs subsidiary considerations together with tax counsel.

Role of the accountant (Commercialista)

• Preparing and filing VAT, income tax and social security returns.
• Managing e-invoicing, bookkeeping and periodic reports.
• Assisting with VAT registration, choice of tax regimes and interactions with the Agenzia delle Entrate.

Other useful local partners

• Notary for incorporation, capital operations and many extraordinary transactions.
• Payroll provider for hiring employees and handling Italian employment compliance.
• Bank relationship manager at a bank accustomed to international clients.

What are the practical next steps for setting up an Italian S.r.l.?

To move forward efficiently, you should confirm your company structure, appoint advisors, secure tax codes and select a banking partner before launching the notarial incorporation. Working in parallel on PEC, digital signatures, VAT and e-invoicing avoids downtime between legal incorporation and operational readiness.

Actionable roadmap

1. Clarify objectives and structure
   • Confirm whether the investor will be an individual or a foreign company (or both).
   • Choose between S.r.l. and S.r.l.s; in most foreign-investor cases, select a traditional S.r.l.
   • Define initial capital, shareholding and board composition.
2. Engage local experts
   • Retain an Italian lawyer for corporate structuring and documentation.
   • Appoint a commercialista to handle accounting, VAT, and payroll if needed.
   • Ask them to recommend a notary and banks that suit your profile.
3. Obtain codici fiscali and collect corporate documents
   • Have all future shareholders and directors apply for an Italian tax code.
   • Gather and apostille/legalize foreign corporate documents and board resolutions.
4. Draft and sign incorporation documents
   • Agree the articles of association and governance model with your lawyer and notary.
   • Arrange for physical or power-of-attorney attendance at the notary to sign the deed and pay in capital.
5. Handle registrations and banking in parallel
   • Have the notary register the company at the Registro delle Imprese.
   • Apply for VAT registration and activate the PEC.
   • Start the bank account opening process with a fully prepared KYC package.
6. Activate operations and compliance
   • Set up e-invoicing software and link it to your accountant.
   • Implement internal processes for approving expenses, issuing invoices and preserving digital records.
   • Schedule regular check-ins with your accountant and lawyer to review compliance and governance in the first year.

Following this structured roadmap, a foreign investor can usually progress from decision to an operational Italian S.r.l. in roughly one to two months, even in the face of Italian bureaucracy and banking hurdles.