Geography, Population, Languages
Italy is a Southern European country, situated on the western side of the European continent. It comprises the Italian peninsula, the Po River valley, and two large islands in the Mediterranean Sea, Sicily and Sardinia. Its highest point is Mont Blanc, but Italy is more typically associated with two famous volcanoes: Vesuvius and Etna.
Italy shares its northern alpine boundary with France, Switzerland, Austria, and Slovenia, and a sea border with Croatia, and France. The independent countries of San Marino and the Vatican City are enclaves within Italian territory. Total area is around 300 km2 and the population numbers up to 59 mln. The capital and largest city is Rome.
Italy is largely homogeneous in language and religion. Official language is Italian.
History, Political Structure and Law
Although Italy remained politically fragmented for centuries, it became the cultural center of the Western world from the 13th to the 16th century.
Modern Italy became a nation-state on March 17, 1861, when most of the states of the peninsula, along with Sardinia and Sicily, were united under king Victor Emmanuel II. The annexation of Venetia in 1866 and of papal Rome in 1870 marked the complete unification of peninsular Italy into one nation under a constitutional monarchy.
Currently Italy is a republic. The Italian Republic was created by popular referendum in 1946 after World War II and the fall of Mussolini’s fascist regime. The 1948 Constitution of Italian Republic established a bicameral parliament. The President of the Republic is elected; he nominates the prime minister, who proposes the other ministers.
The Italian judicial system is based on Roman law modified by the Napoleonic code and later statutes. A constitutional court passes on the constitutionality of laws, and is a post-World War II innovation.
Economy and Infrastructure
After the monarchy was replaced by democratic republic, economic revival followed. Italy became an integral member of NATO and the European Economic Community (later the EU) having signed the Treaty of Rome in 1957. Italy joined the Euro from its conception in 1999.
Today, Italy is a highly developed country with one of the highest GDP and a member of the Group of Eight (G8). The country is one of the largest exporters of manufactured goods in the world. This capitalistic economy remains divided into a developed industrial north, dominated by private companies, and a less developed agricultural south.
Over the past decade, Italy has pursued a tight fiscal policy in order to meet the requirements of the Economic and Monetary Union and has benefited from lower interest and inflation rates.
The company law in Italy is governed by Art. 2472 ff. and Art. 2325 ff. of Codice Civile. In general terms Italian Law prescribes two forms of companies having limited liability: Limited Liability Company or S.r.l. (societa responsabilita limitata) and Joint Stock Company or S.p.A. (societa per azioni).
Both S.p.A. and S.r.l. are limited liability companies, but only in the case of Joint Stock Company the share capital is divided into shares, which are embodied in stock certificates. In case of S.r.l. the capital is divided into “quotas”, which are only recorded in the “quotaholders” book. Although there are certain regulations, which apply specifically to S.r.l., broadly speaking, an S.p.A or an S.r.l can be both used to serve as a company having limited liability in Italy.
The minimum capital requirement for a S.r.l. is 10,000 EUR. Italian law requires that at least 25% of the subscribed capital be deposited with a Bank in Italy before the Deed of Incorporation is executed. However, in the case of a sole shareholder the entire capital must be fully paid-in at the time of the incorporation. In order to avoid possible problems, in case of non-resident shareholders, capital should be remitted from abroad and negotiated approximately one week before the date of incorporation.
The minimum number of shareholder for a S.r.l. is one. The shareholder does not need to be of Italian nationality or resident. For incorporating a new S.r.l., all shareholders must be present in person in front of a Notary in Italy to sign all company documents. Alternatively, Company Express can arrange for the shareholder(s) to issue a Power of Attorney to a lawyer (provided by Company Express) to enable the lawyer to sign all documents on behalf of all shareholders. In this way, the shareholders do not have to be present in person before a Notary in Italy.
S.r.l’s are managed by one or more directors. There are no requirements for directors to be of Italian national or resident. However, it is advisable that at least one director is an Italian resident, particularly if the company is to perform a commercial activity. A secretary is not required by Italian law.
All the companies with a capital equal or exceeding 120,000 EUR (and thus all S.p.A.) must have a board of statutory auditors, comprised of 3 statutory members and 2 alternate members. Even if the company has a capital of only 10,000 EUR a founder, in view of the importance of the company, may wish to appoint such board upon incorporation. The Auditors’ fees according to applicable law are proportional to the company’s capital.
After incorporation, the new company must apply for a VAT number and adhere to certain fiscal requirements. Company Express can arrange for the VAT registration and the accounting matters are usually handled by an accountant to be appointed by the new company. Company Express can provide these services also.
Annual Taxation and Fees
S.r.l’s are required to prepare annual accounts, including a Balance Sheet, a Profit and Loss Statement and an Integrative Note, which must be approved by a shareholders’ meeting within 4 months from the end of its financial year. Thereafter the company’s balance sheet needs to be filed with the Registrar of Companies.