Italy has long been a desirable destination for foreign entrepreneurs, thanks to its strategic location, strong manufacturing sector, rich culture, and access to the wider EU market. Whether you’re an expat looking to start a small boutique or an international investor planning to scale operations in Europe, Italy offers several legal forms for opening a business.
In this guide, we’ll break down the main types of businesses you can open in Italy as a foreigner, the pros and cons of each, and the steps to get started.
Sole Proprietorship (Ditta Individuale)
For individuals looking to offer services or sell goods on a small scale, the sole proprietorship (ditta individuale) is often the most straightforward option. It’s fast to set up and doesn’t require a minimum capital investment, making it ideal for freelancers, tradespeople, or solo consultants.
However, a sole proprietorship is tied directly to your personal finances. That means you’re fully liable for any debts or legal issues your business incurs. While this may be a manageable risk for a copywriter or a local tour guide, it becomes more problematic in sectors where larger investments or risks are involved.
Setting one up requires a tax code (codice fiscale), an Italian address, and (for non-EU nationals) a residence permit that allows for self-employment.
Key Features:
- Owned and run by one person
- Unlimited liability (personal assets are at risk)
- Low setup and maintenance costs
- Suitable for local services or freelance work
Requirements:
- Italian tax code (codice fiscale)
- Residence permit (if non-EU)
- Registration with the Chamber of Commerce and INPS (social security)
Partnerships (Società di Persone)
If you’re going into business with one or more partners, a partnership can be a natural step up. Italian law recognizes two main forms: the Società in Nome Collettivo (SNC), where all partners are jointly and personally liable, and the Società in Accomandita Semplice (SAS), which distinguishes between general partners (with full liability) and limited partners (whose risk is capped at their investment).
Partnerships are popular in sectors like food and hospitality or small-scale manufacturing, where collaboration is key and personal trust is strong. Just be aware that unlike in some other jurisdictions, limited liability isn’t automatic in Italian partnerships. If protecting personal assets is important to you, you may want to consider a limited company instead.
Types of partnerships:
- SNC (Società in Nome Collettivo): General partnership
- SAS (Società in Accomandita Semplice): Limited partnership
These forms offer flexibility and lower compliance costs but come with unlimited liability for at least one of the partners.
Key Features:
- No minimum capital
- Informal governance
- At least one partner is fully liable (especially in SAS)
Requirements:
- Italian tax ID and address
- Partnership agreement
- Registration with the Business Register (Registro delle Imprese)
Limited Liability Company (SRL – Società a Responsabilità Limitata)
The Società a Responsabilità Limitata (SRL) is Italy’s equivalent of a limited liability company and the most common structure used by both local and foreign-owned SMEs.
An SRL can be owned by one or more individuals or legal entities. It offers a crucial benefit: your liability is limited to the capital you invest. This makes it a smart choice for anyone launching a product, hiring staff, or investing in infrastructure.
The setup process includes drafting formal bylaws, opening a dedicated bank account, and working with a notary to register the company. The minimum share capital is €10,000, although only 25% needs to be deposited upfront. There’s also a simplified version called the SRLS (Società a Responsabilità Limitata Semplificata), which requires less capital and has lower incorporation costs, but comes with some restrictions.
Most foreign entrepreneurs who want to operate in Italy long-term choose this structure because it balances credibility, protection, and flexibility.
This is the most popular form for foreign investors because it limits liability to the amount of capital invested.
Key Features:
- Liability is limited to the company’s assets
- Can have one or more shareholders
- Flexible structure and easier to manage than a corporation
- Minimum share capital: €10,000 (only 25% needed upfront)
Requirements:
- Italian tax code for directors/shareholders
- Company bylaws and articles of incorporation
- Local bank account and registered office
Joint-Stock Company (SpA – Società per Azioni)
For businesses planning large-scale operations, public investment, or a future listing, the Società per Azioni (SpA) is Italy’s corporate heavyweight. It’s more complex and expensive to set up, requiring a minimum capital of €50,000 and a formal governance structure, including a board of directors and statutory auditors.
This structure is typically chosen by large companies or international groups, especially those looking to raise external capital or issue bonds. It’s overkill for most small businesses, but it’s the gold standard when high-volume operations or formal investor relations are part of the plan.
An SpA is a more formal and regulated structure, often used by larger corporations or foreign multinationals operating in Italy.
Key Features:
- Shareholders have limited liability
- Can issue shares and bonds
- Suitable for international or capital-intensive ventures
- Minimum share capital: €50,000
Requirements:
- Complex incorporation and governance
- Annual audits and reporting obligations
- Notarial deed and Board of Directors setup
Branch Office (Sede Secondaria)
If your company is already established abroad and you want to operate in Italy without forming a new entity, opening a branch office (sede secondaria) may be the right route. A branch is legally part of the foreign company but operates locally with its own address, tax obligations, and appointed representative.
The advantage is that you don’t need to go through full incorporation. However, you are still subject to Italian tax and reporting obligations, and the foreign parent company is fully liable for the branch’s operations.
It’s often a practical solution for foreign tech companies, agencies, or service firms that want a presence in Italy without creating a new corporate structure.
Key Features:
- Not a separate legal entity
Must appoint a local representative - Subject to Italian tax and reporting laws
Requirements:
- Registration with the Business Register
- Articles of association of the parent company
- Legal representative with an Italian tax code
Representative Office (Ufficio di Rappresentanza)
Not ready to trade yet? A representative office (ufficio di rappresentanza) allows you to establish a local presence for research, promotion, or liaison purposes without triggering tax obligations or requiring incorporation.
It’s an option used by companies that are exploring the Italian market, engaging in feasibility studies, or establishing early relationships before committing to full operations. However, a representative office cannot engage in any commercial activity, sign contracts, or issue invoices.
This is a non-trading entity that cannot issue invoices or sign contracts but can help foreign companies explore the Italian market.
Key Features:
- No legal personality or commercial activity
- No corporate tax obligations
- Used for pre-market entry activities
Requirements:
- Local office address
- Appointment of a local representative
- Notification to the Chamber of Commerce
Can a Foreigner Open a Business in Italy?
Yes, both EU and non-EU citizens can open a business in Italy. However, non-EU citizens must hold a valid residency permit that allows for self-employment or company management.
Documents generally required:
- Passport and visa/residency permit
- Codice Fiscale (tax identification number)
- Italian business address
- Bank account in Italy
- Notarized articles of incorporation (for companies)
Italy offers a variety of business structures for foreigners, from freelancers and partnerships to limited liability companies and branch offices. The best structure depends on your goals, investment level, and whether you want to trade locally, hire employees, or expand a foreign brand.
With the right planning and support, opening a business in Italy as a foreigner can be a smart step toward long-term growth in the EU.
At Peoitaly, we specialize in helping foreign entrepreneurs navigate Italian bureaucracy, choose the right business structure, and launch smoothly, so you can focus on building your vision, not fighting red tape.
Contact us and let’s talk about your business goals and how we can bring them to life.
