Expanding Your Business to Italy: A Guide to S.r.l. and Branch Offices
JUDr. Jakub Dohnal, Ph.D., LL.M.
31.1.2026 |
ARROWS law firm
Italy ranks among the top five most significant trading partners for the Czech Republic, making it a natural destination for business expansion. In this article, our Prague-based law firm provides a clear overview of the differences between establishing an Italian S.r.l. and a branch office, describes the registration process with the Italian Chamber of Commerce, and highlights key tax obligations. You will find specific answers on how to securely enter this Southern European market. For Czech and Slovak clients, our Czech legal team provides regular assistance through ARROWS international.
Quick summary for entrepreneurs from ARROWS
- Choice of form: The decision between a subsidiary (S.r.l.) and a branch (Sede Secondaria) affects liability and the scope of administration.
- Italian bureaucracy: Obtaining a tax code (Codice Fiscale) and registration with the Chamber of Commerce (Registro delle Imprese) is essential.
- Digital tools: Italy requires specific tools for communication with authorities, such as certified e-mail (PEC) and a digital signature.
- Professional guidance: Given the complexity of the Italian Commercial Code, cooperation with experts guarantees the elimination of risks and fines. In this area, ARROWS provides comprehensive international law services.
Legal forms of business: S.r.l. versus a branch office
When entering the Italian market, a business must primarily resolve the issue of legal personality. The most common choice for medium and large companies is the Società a responsabilità limitata (S.r.l.), which is the equivalent of a Czech limited liability company. This form provides full legal autonomy and protects the assets of the parent company in the Czech Republic, which is crucial especially in sectors with a higher level of risk. You can learn more about the liability of statutory bodies in the article practical duties of directors and experiences of corporate lawyers.
An alternative is the establishment of a branch office, referred to in Italy as a Sede Secondaria. This does not have its own legal personality and is a direct part of the foreign company. Although establishing a branch is slightly cheaper administratively, the parent company bears full responsibility for all obligations and debts incurred in Italy. The choice of form should always reflect long-term strategy and the level of planned investments. Our experts on corporate law, holdings, and structures can assist you with this.
ARROWS law firm in Prague regularly handles these matters, and thanks to the ARROWS International network, which we have been building for ten years, we ensure the smooth progress of registrations with an international element. Our experience with Italian law allows us to eliminate risks at the very beginning. Do you need advice on this matter? Contact our Prague-based attorneys at office@arws.cz.
Deciding on the structure in Italy
- What is an S.r.l.s? It is a simplified form of S.r.l. (semplificata) with a minimum capital starting from 1 EUR, which is, however, limited by fixed articles of association without the possibility of modification.
- Must an S.r.l. have an Italian director? Italian law does not require the director to be a resident of Italy, but for practical functioning (banks, authorities), it is a significant advantage.
- What is the minimum share capital for a classic S.r.l.? Standardly, 10,000 EUR is required, while 25% of this amount must be paid upon incorporation if the company has multiple shareholders.
Administrative steps: Notary, Commercial Register, and Codice Fiscale
The actual formation of a company in Italy begins with a notary, who draws up the deed of association and the bylaws. Before that, however, all future shareholders and directors must obtain a Codice Fiscale – an Italian tax identification number. Without this code, it is not possible to sign any official document or open a bank account in Italy. We solve similar challenges in other regions, as described in the article on how companies can establish a company or branch in Romania. The process of obtaining the code for foreign entities can be lengthy without professional help.
After signing the notarial deed, registration in the commercial register, Registro delle Imprese, follows, which is maintained by the local Chamber of Commerce. Italian administration is notorious for its rigidity, and even the smallest formal error in documentation can lead to the rejection of the registration or the need to repeat the notarial act. Attorneys from our Prague-based law firm ARROWS will ensure the preparation and review of all contracts so that the process proceeds without complications.
The legal agenda in Italy is much more complex in practice than it seems at first glance. Steps that look simple have hidden procedural details and links to local regulatory authorities in the real world that a layman often does not see. At ARROWS law firm, we handle this agenda daily, allowing us to significantly shorten the time for our clients. If you are looking for specialists in this field, write to office@arws.cz.
| Risks and Sanctions | How ARROWS Assists (office@arws.cz) |
| Absence of PEC and Digital Signature: Inability to communicate with authorities and risk of fines for failure to comply with archiving obligations. | Legal and Business Consultations: Provision of all digital tools and management of electronic communication with authorities. |
| Incorrect VAT Reporting (IVA): High penalties from Agenzia delle Entrate for incorrect application of the reverse charge mechanism. | Legal and Tax Advisory: Setting up tax compliance and representation in communication with tax authorities in Italy. |
| Non-compliance with Occupational Safety: Liquidating fines during workplace inspections in case of failure to meet Italian standards (L. 81/08). | Preparation and Review of Directives: Review of internal documents and ensuring compliance with strict Italian occupational safety legislation. |
| Delay in Registry Entry: Administrative blocking of the company and inability to legally invoice Italian business partners. | Representation at Registries: Complete management of the registration process and supervision of the entry into the Registro delle Imprese. |
Tax and Operational Aspects: PEC, Digital Signatures, and VAT
Italy is a pioneer in the digitalization of public administration, which brings specific obligations. Every company must have a PEC (Posta Elettronica Certificata) address established. This is a certified e-mail that has the same legal weight in Italy as a registered letter. All communication from authorities takes place exclusively through this channel. If you overlook a message in the PEC mailbox, deadlines continue to run regardless of whether you have read it.
Another specific requirement is the obligation of electronic invoicing through the SdI (Sistema di Interscambio) system. For Czech companies accustomed to sending invoices in PDF, this means the necessity of adjusting accounting software or using external providers. Our Prague-based law firm regularly provides expert legal opinions and advisory even on these technical aspects of Italian business.
Our clients value our speed and high quality. Our portfolio includes more than 150 joint-stock companies and 250 S.R.O.s, whom we also assist with negotiations with business partners. Furthermore, ARROWS law firm is insured for damages up to CZK 400,000,000, which provides essential security for large corporations when entering a new market. To resolve your situation, write to us at office@arws.cz.
Italian Legal Abbreviations - Q&A
- What are INAIL and INPS? INAIL is the authority for insurance against workplace accidents and INPS is the national social security institute. Registration with both is mandatory for companies with employees.
- How does Italian VAT work? Value Added Tax is called IVA (Imposta sul Valore Aggiunto) and the standard rate is 22%. Registration for it takes place simultaneously with the company formation.
- Is it necessary to have an Italian bank account? For paying up the share capital and for most payments to the state administration, an Italian account with an IBAN starting with IT is practically essential.
In Italy Without Legal Issues Thanks to ARROWS Attorneys
The Italian market offers huge opportunities but requires respect for local legal and administrative standards. Decisions on the appropriate form of business, obtaining a Codice Fiscale, and setting up digital communication via PEC are steps that must not be underestimated. Our Czech legal team has extensive experience accompanying Czech companies to the Italian market, and thanks to the ARROWS International network, they can resolve even the most complex cases with an international element. Given the complexity of Italian bureaucracy and the risk of high fines, it is safer to entrust the entire matter to professionals. If you want to ensure your expansion starts on solid foundations, contact our Prague-based law firm at office@arws.cz.
FAQ – Most Frequent Legal Questions on How to Establish a Company or Branch in Italy
- How long does it take to establish an S.r.l. in Italy? With correctly prepared documents, a company can be established within 2 to 3 weeks. Obtaining the Codice Fiscale for foreign shareholders usually takes the longest.
- Can a Czech legal entity be the executive of an Italian company? Italian law allows a legal entity to be the statutory body, but in practice, this brings a number of complications when verifying digital signatures. We recommend appointing a natural person.
- What are the annual costs of maintaining an Italian branch? In addition to rent, it is necessary to account for bookkeeping costs, Chamber of Commerce fees, and PEC mailbox management. Our Prague-based attorneys can prepare a precise estimate for your specific sector. Write to us at office@arws.cz.
- Is it possible to buy a ready-made company in Italy? This practice is not as common in Italy as in the Czech Republic, mainly due to the necessity of a notarial deed for the transfer of shares, which is as costly as establishing a new company.
- Must the articles of association of an Italian company be in Italian? Yes, the official language is Italian. If the shareholders do not speak Italian, an interpreter must be present at the notarial signing and the documentation must be bilingual. Our Czech legal team will arrange all necessary translations.
- How does the liquidation of a company in Italy work if I decide to leave? Liquidation is a formal process requiring the appointment of a liquidator and a notarial deed. It is a process lasting several months, which is why it is important to have the company correctly set up from the beginning.
Disclaimer: The information contained in this article is for general informational purposes only and serves as a basic guide to the subject matter. While we strive for maximum accuracy, Czech legislation and its interpretation evolve over time. To verify the current wording of regulations and their application to your specific situation, it is essential to contact ARROWS law firm in Prague directly (office@arws.cz). We accept no liability for any damages or complications arising from the independent use of information from this article without our prior individual legal consultation and professional assessment. Every case requires a tailored solution under the Czech legal system; therefore, please do not hesitate to contact our Prague-based attorneys.
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