Italy Country Profile business trade issues

Italy

DOING BUSINESS

Local business incentives - Legal forms of companies - Registration and licensing procedures - Legal framework - Foreign exchange control - Regulations concerning equity investment - FDI inflows - Expertise of the political risk

Local business incentives

Italy encourages the development of its areas in difficulty, facilitates the activity of small and medium-sized companies and job creation. Various regional aids are granted to companies, settled in Mezzogiorno (South of Italy, from South of Rome down, Sardinia, Sicily). Their projects should involve modernisation and development of existing companies, integration of new technologies and exploitation of local resources. Furthermore, new businesses set up in this area in order to develop a new industrial activity (only sectors in decline) can be exempt from company tax (composed of two taxes) for 10 years. Profits made in Italy and reinvested in Mezzogiorno are exempt from part of the company tax. Aids for research and development can be granted by the Department of Industry through the Institute of industrial production, the Ministry of Universities and the Scientific and Technological Research.
The Italian Institute for Foreign Trade (ICE) provides exhaustive support regarding investment incentives.

Legal forms of companies

Form	Number of partners/shareholders	Minimum and/or maximum capital	Liability	Registration fee	Release of financial documents
Societa a responsabilita limitata (SRL) is a Private Limited Company.	No minimum nb: 1 partner for a sole proprietorship.	Minimum 10,000 €, totally subscribed and released up to 3/10 at the creation.	Liability is limited to the amount contributed.	About 100 €	No
Societa per azioni (SpA) is a Public Limited Company.	Minimum 2 shareholders.	Minimum 100,000 €, totally subscribed and released up to 3/10 at the creation. Their liability is limited to the amount contributed.	Liability is limited to the amount contributed.	About 1,000 €
Societa in nome Colletivo (SNC) is a general partnership.	Minimum 2 partners	No minimum capital.	Partners' liability is joint and several.	Lower expenses compared with Private Limited Company	No
Societa in Accomanditari Semplice(SAS) is a limited partnership.	Two types of partners: active partners and sleeping partners.	No minimum capital.	Liability of active partners is unlimited	Lower expenses as compared to a Private Limited Company	No
Societa Cooperativa (SC) is a co-operative company	Minimum 9 partners	No minimum capital.	Liability is limited or unlimited depending on the status.	Lower expenses as compared to a Private Limited Company	No

Registration and licensing procedures
The establishment of status must be drawn up in a deed drawn up by a solicitor. They must be introduced within 30 days with the register of companies, then with the Commercial Court of the province where the company will be located. A registration with the local Chamber of Commerce is also required as well as a notice in the official journal of advertisements. These formalities take about 4 weeks.

Legal framework
No specific text of law regulates foreign direct investments. Their procedure is inspired on local investments procedure.

Foreign exchange control
Free conversion of currencies is carried out as well as the right to transfer profits free of tax, capital, surplus and dividends, with no limitation or period of time ; provided that foreign investors are in order with local tax authorities.

Regulations concerning equity investment
A majority holding interest in the capital of a local company is legal in Italy, except in certain sectors ( press, telecommunications, electricity, oil exploitation, airlines and shipping companies).

Foreign Direct Investment inflows in Italy

FDI inflows	2003	2004	2005	World rank (*) 2005
FDI inflows (USD million)	16 415	16 815	19 971	107/141

Source : UNCTAD - World Investment Report
Note : (*) World Rank = UNCTAD Inward FDI Performance Index. It is a measure of the extend to which a host country receives inward FDI relative to its economic size. It is calculated as a ratio of the country's share in global FDI inflows to its share in global GDP.

Last modified in 2006 - ongoing update