According to 2024 data from InfoCamere, Italy has approximately 5.9 million companies registered in the Business Register. Of those, about 50% are sole proprietorships, chosen for their simplified regulations. Limited liability businesses represent about 33% of the total, with a 3.25% growth rate in 2024. Partnerships make up around 14% of companies but show a slight downward trend (-1.59%) due to the partners’ unlimited liability. The remaining legal business structures make up about 3%.

Starting a business in Italy is an important decision that requires awareness, planning, and knowledge of legal regulations. This is true whether you want to start a new business or turn an existing business into a formal company. Either way, it is important to know what company types exist, decide which one best suits your needs, and understand the steps involved in setting up a company.

In this article, we examine the different business structures—particularly partnerships and corporations. We also explain the necessary steps to set up a company in Italy, including costs and applicable taxes.

What’s in this article?

• What is a company, and what types exist in Italy?
  
• What are the different types of limited liability business (S.r.l.)?
  
• The necessary steps to set up a company
  
• How long does it take to set up a company in Italy?
  
• How much does it cost to set up a company in Italy?
  
• How much does a company pay in taxes?
  
• How Stripe can help you manage value-added tax (VAT) and other taxes for transactions
  
• How Stripe Atlas can help
  

What is a company, and what types exist in Italy?

In Italy, a company is a legal entity formed by one or more individuals who decide to carry out an organized economic activity for profit. When starting a company, the choice of business structure is important. It depends on various factors, such as available capital, number of partners, financial liability, and type of business activity.

Companies are primarily divided into two main categories:

• Partnerships: Partners have unlimited and joint liability.
  
• Corporations: Liability is limited to the capital contributed.
  

Types of partnerships

Partnerships are simple to establish and manage. However, they involve greater financial exposure for the partners who are personally liable for the company’s debts and obligations with their private assets. The main partnership types are:

• Simple partnership (S.s.)
  These are used for noncommercial activities, such as agriculture or professional services.

• General partnership (S.n.c.)
  Each partner is personally and jointly liable for the company. It is used for small-scale commercial activities.

• Limited partnership (S.a.s.)
  This structure has two types of partners: general (i.e., with unlimited personal liability) and limited (i.e., liability is restricted to their capital contribution).

Types of corporations

If you want to set up a corporation, you should keep in mind that these companies offer greater asset protection than partnerships and are suitable for more structured projects. Here are the types of corporations:

• Limited liability business (S.r.l.)
  This is the most common type, suitable for a two-person company or sole entrepreneurs. Liability is limited to the capital contributed.

• Joint-stock businesses (S.p.A.)
  These are often chosen by large enterprises, with a minimum capital requirement of €50,000. The capital is divided into shares.

• Partnership limited by shares (S.a.p.a.)
  This is a hybrid form between a partnership and a corporation that is rarely used.

Why is the S.r.l. the most widely used corporate form in Italy?

The S.r.l. is the most common corporate form for those looking to start a business in Italy because it offers the following features:

• Limited liability: Shareholders are not personally liable with their private assets.
  
• Management flexibility: Bylaws are customized for specific needs.
  
• Minimal startup capital: An S.r.l. can be established with just €1 (simplified S.r.l.).
  
• Tax advantages: Compared to a sole proprietorship, an S.r.l. allows for more efficient tax planning.
  

What are the different types of limited liability business (S.r.l.)?

There are several types of S.r.l., each with specific features designed to suit different business profiles:

• Standard S.r.l.
  This form requires minimum capital of €10,000, with at least €2,500 to be paid when establishing the company. This is the most flexible form, customizable in the company bylaws and suitable for medium to large-scale projects.

• Simplified limited liability business (S.r.l.s.)
  This form requires minimum capital between €1–€9,999. It is suited for private individuals and uses a standard statutory template provided by law. It also does not require notarial fees and is a promising solution for those looking to start a business with a minimal up-front investment.

• Innovative startup S.r.l.
  This company type is best for those looking to launch a business with a technological or innovative focus. It offers access to tax incentives, crowdfunding, and simplified management processes. In addition, it carries specific technical and organizational requirements.

• Single-member private S.r.l.
  Formed with a single shareholder, this form is a practical choice for solo entrepreneurs looking to limit financial liability. All capital must be paid in full upon incorporation.

The necessary steps to set up a company

Setting up a company in Italy involves several formal and administrative steps. While the process can seem complex, there are a few key steps:

Select company type

Carefully evaluate which type of company best suits your needs based on your business type, number of shareholders, level of liability, and preferred tax regime. If you want to start a business with one or more partners, an S.r.l. might be the right choice. However, for family-run or small local operations, a partnership could be sufficient.

Prepare articles of incorporation and bylaws

To establish a company, two separate but complementary documents must be prepared: articles of incorporation and bylaws. Both documents must be drafted by a notary, except for specific cases such as an S.r.l.s. Here is what each document involves:

• Articles of incorporation: These contain important details about the company being established, including company name, registered office address, identities of shareholders, authorized and paid-in share capital, corporate purpose, and company duration.
  
• Bylaws: This document defines internal governance rules, such as administration procedures, profit distribution, scheduling and resolving meetings, powers of corporate bodies, and decision-making criteria.
  

For an S.r.l., the articles of incorporation can be customized according to the shareholders’ needs. For an S.r.l.s., a standard statutory template prescribed by law must be used. Once finalized, the articles of incorporation and the company bylaws are signed before a notary who also handles their registration with the Business Register.

Pay share capital

The minimum capital required to start a business depends on the chosen legal structure. For a standard S.r.l., minimum capital of €10,000 was previously required. However, since 2013, you can now form a standard S.r.l. with €1 in capital, provided the full amount is paid at the time of incorporation. The reduction of the minimum capital from €10,000 to €1 was established under Italian Legislative Decree 76/2013 in Article 9, Paragraph 15-ter. This decree amended Article  2463 of the Italian Civil Code and was converted into Law  99/2013.

Execute the deed before a notary

The company is formally established by executing the public deed in the presence of a notary. During this phase, the notary confirms the company’s bylaws and the shareholders’ personal details. The notary then files the deed with the Business Registry.

Register with the Business Registry

Within 20 days of signing the articles of incorporation, the company must be registered with the local jurisdiction’s Business Registry. Upon registration, the company acquires full legal status, in the case of a corporation.

Obtain a value-added tax (VAT) number and tax code

To register a business, you must file an application with the Italian Revenue Agency to obtain your VAT number and tax code. At this stage, you must also select your accounting method and report the Classification of Economic Activity (ATECO) code corresponding to your business activity.

Register with Italian National Social Security Institute (INPS) and Italian National Institute for Insurance against Accidents at Work (INAIL)

If the company has employees or working partners, it is mandatory to register with INPS for pension contributions and INAIL for workplace injury coverage. Directors might also have to enroll in INPS under the separate management scheme.

Submit Certified Notice of Business Start (SCIA)

SCIA is required for all activities subject to administrative authorization (e.g., trade, food and beverage, handicrafts, utilities). You must submit it to the One-Stop Business Advisory Center (SUAP) of the municipality where your operational headquarters is located. In these cases, without the SCIA, you cannot legally operate the company.

Fulfill other specific compliance requirements

Depending on your field of activity, additional requirements can apply, including registration with professional bodies, health permits (e.g., if you sell food online), certified email (PEC), digital signature, or registration with INPS for specific funds or nonprofit organizations. It’s important to consult an accountant or business advisor to ensure you don’t miss any requirements.

How long does it take to set up a company in Italy?

Typically, setting up a company in Italy takes an average of 7–20 business days, depending on the chosen legal form and the efficiency of the involved entities and professionals (e.g., notary, Italian Revenue Agency, Chamber of Commerce, INPS, INAIL). The process can take longer if there are delays from the authorities, incomplete documentation, or required licenses for regulated activities (e.g., healthcare, food service, transportation).

How much does it cost to set up a company in Italy?

The cost of setting up a company varies depending on the chosen legal structure and the professional services you decide to use. Generally, this can be summarized as follows:

• S.s.
  Startup costs are relatively low and generally range from €600–€1,200, depending on legal complexity and the professional services required. To start an S.s., you do not need to provide minimum capital or execute a public deed. However, you must register the partnership agreement with the Italian Revenue Agency.

• S.n.c.
  The costs range between €1,000–€2,000. It does not require mandatory minimum capital and can be established without a notary. However, costs will vary depending on the complexity of the legal process.

• S.a.s.
  The formation costs for an S.a.s. typically range from €1,200–€2,500, depending on the complexity of the legal process and whether notarial services are required.

• Standard S.r.l.
  The costs to form this type of company typically range from €3,000–€5,000. These include notary fees, registration taxes, stamp duties, Chamber of Commerce fees, and payment of the minimum required share capital.

• S.r.l.s.
  This company type can be formed with an initial investment of a few hundred euros. It is exempt from notary fees if you use the standard legal template and requires minimum capital between €1–€9,999.

• S.p.A.
  Forming an S.p.A. is the most expensive option. It requires a minimum capital of €50,000 and typically involves startup costs exceeding €7,000–€10,000, including notary fees, taxes, and administrative costs.

To these amounts, you must add any additional costs for tax and legal fees, setting up a PEC and digital signature, and compliance requirements with INPS, INAIL, and SCIA.

Which company is the cheapest to set up?

The cheapest type of company to set up is the S.r.l.s. It does not require notary fees and is particularly suitable for individual entrepreneurs.

How much does a company pay in taxes?

After incorporation, companies are subject to various mandatory taxes and contributions. These vary depending on the legal structure, tax system, and revenue. Here are the main types of taxes and contributions:

• Italian corporate income tax (IRES): 24% or 20%
  
• Italian regional tax on productive activities (IRAP): 3.9%
  
• VAT: 22%, 10%, 5%, or 4%
  
• Dividend withholding tax: 26%
  
• INPS contributions: 24% minimum
  

Here is a detailed look at the main taxes and contributions for companies operating in Italy:

IRES

IRES applies to corporations at a fixed rate of 24% on profits generated during the fiscal year. However, Italy’s 2025 Budget Law introduced a reduced IRES corporate income tax rate of 20% for companies that meet specific requirements. This incentive—called the “IRES incentive”—applies to the entire taxable income for fiscal year 2025, if the company:

• Allocates at least 80% of its 2024 profits to a designated reserve fund
  
• Invests a portion of the allocated profits (at least 30% of the dedicated reserve or 24% of 2023 profits, with a minimum of €20,000) in new capital assets that fall under Transition Plan 4.0 and Transition Plan 5.0
  
• Maintains or increases its employment levels by hiring new permanent staff
  
• Did not use its wage supplementation fund in 2024 or 2025, barring certain exceptions
  

Keep in mind that this tax benefit is only valid for fiscal year 2025, and companies operating at a loss in 2025 are not eligible. The tax benefit can also be revoked if the company fails to comply with the requirements regarding profits and capital assets.

IRAP

IRAP is calculated based on the net value of production. IRAP was established by Italian Legislative Decree 446/1997, with two key objectives: to provide regions with an independent source of funding and promote local economic and social growth. The standard tax rate is 3.9%, but it can vary by region and industry sector.

VAT

VAT is a tax applied to most goods and services in Italy. If you set up a company, you need to add VAT to your sales (i.e., output VAT) and deduct the VAT paid on company purchases (i.e., input VAT). Every month or quarter, you will pay the state the difference between VAT collected and VAT paid. It is a common mechanism in many European countries and represents an important part of Italian taxation.

The standard VAT rate in Italy is 22%, with reduced rates of 10%, 5%, or 4% for certain goods and services.

INPS contributions

For a company, INPS contributions are not a fixed amount but depend on the role partners or directors hold within the company and their income. The most common cases for corporations in 2025 are as follows:

• Administrative partner (with remuneration)
  The administrative partner must enroll in the INPS Separate Social Security Scheme (Gestione Separata). The contribution rate is 26.07% or 24% if another mandatory pension plan is in place. Contributions are calculated based on compensation, with an annual minimum of approximately €18,555 and a maximum cap of €120,607 for 2025.

• Working partner (active in the business)
  The working partner must register with the Artisans and Traders Fund System (Gestione Artigiani o Commercianti), a specific program within INPS. There is a fixed annual contribution of approximately €4,460.64 for artisans and €4,549.70 for traders. This is based on the minimum threshold of €18,555.00, plus a percentage on income exceeding this amount (24% for artisans and 24.48% for traders).

• Administrative and working partner
  In this case, contributions must be paid to both fund systems.

• Partner contributing “capital only”
  No INPS contributions are required.

Those in partnerships are typically considered self-employed. They must enroll in the INPS Artisan and Traders Fund System, depending on their primary business activity.

Government concession tax

The government concession tax applies only to certain companies. For example, companies that maintain corporate records in paper form with a fixed annual cost must pay this tax.

Annual Chamber of Commerce fees

If your company is registered with the Business Registry, you must pay a fixed fee to the local Chamber of Commerce. The amount varies based on the legal structure and location of the company.

Taxation of dividends

If you distribute profits to shareholders, they must pay tax on the dividends received in accordance with current regulations.

It is important to note that partnerships do not pay IRES. Instead, profits are allocated directly to the partners and taxed under personal income tax (IRPEF) at progressive rates.

How Stripe can help you manage value-added tax (VAT) and other taxes for transactions

If you sell goods or services online—including internationally—managing VAT can quickly become complex, especially if you operate in multiple countries or apply varying tax rates. Stripe Tax helps you automate VAT, sales tax, and goods and services tax (GST) calculations while ensuring simple and accurate compliance with local tax regulations. Integrated directly with Stripe solutions such as Payments, Checkout, and Billing, this tool enables your company to calculate, collect, and remit the correct tax in each market, greatly reducing the risk of errors and penalties.

How Stripe Atlas can help

Stripe Atlas sets up your company’s legal foundations so you can fundraise, open a bank account, and accept payments within two business days from anywhere in the world.

More than 75K companies have incorporated using Atlas, including startups backed by top investors like Y Combinator, a16z, and General Catalyst.

Applying to Atlas

Applying to form a company with Atlas takes less than 10 minutes. You’ll choose your company structure, instantly confirm whether your company name is available, and add up to four cofounders. You’ll also decide how to split equity, reserve a pool of equity for future investors and employees, appoint officers, and then e-sign all your documents. Any cofounders will receive emails inviting them to e-sign their documents, too.

Accepting payments and banking before your employer identification number (EIN) arrives

After forming your company, Atlas files for your EIN. Founders with a US Social Security number, address, and cell phone number are eligible for IRS expedited processing, while others will receive standard processing, which can take a little longer. Additionally, Atlas enables pre-EIN payments and banking, so you can start accepting payments and making transactions before your EIN arrives.

Cashless founder stock purchase

Founders can purchase initial shares using their intellectual property (e.g., copyrights or patents) instead of cash, with proof of purchase stored in your Atlas Dashboard. Your IP must be valued at $100 or less to use this feature; if you own IP above that value, consult a lawyer before proceeding.

Automatic 83(b) tax election filing

Founders can file an 83(b) tax election to reduce personal income taxes. Atlas will file it for you—whether you are a US or non-US founder—with USPS Certified Mail and tracking. You’ll receive a signed 83(b) election and proof of filing directly in your Stripe Dashboard.

World-class company legal documents

Atlas provides all the legal documents you need to start running your company. Atlas C corp documents are built in collaboration with Cooley, one of the world’s leading venture capital law firms. These documents are designed to help you fundraise immediately and ensure your company is legally protected, covering aspects like ownership structure, equity distribution, and tax compliance.

A free year of Stripe Payments, plus $50K in partner credits and discounts

Atlas collaborates with top-tier partners to give founders exclusive discounts and credits. These include discounts on essential tools for engineering, tax, finance, compliance, and operations from industry leaders like AWS, Carta, and Perplexity. We also provide you with your required Delaware registered agent for free in your first year. Plus, as an Atlas user, you’ll access additional Stripe benefits, including up to a year of free payment processing for up to $100K in payments volume.

Learn more about how Atlas can help you set up your new business quickly and easily, and get started today.