Good to know
Good to Know
- No local partner, Italian co-founder, or resident director is legally required to set up an SRL in Milan — foreign entrepreneurs can own 100% of the company.
- The whole formation process can typically be completed without ever traveling to Italy, using a Power of Attorney for both the codice fiscale application and the notarial deed.
- The corporate bank account (needed to deposit the share capital before the notary can finalize the deed) is usually the slowest step — budget extra time if using a traditional bank rather than a business-focused fintech.
- Owning an Italian company does not automatically give a non-EU founder the right to live in Italy; a separate residence/work permit (e.g. self-employment visa or the Italy Startup Visa) is needed to personally relocate and run the business day-to-day.
- Milan-based notaries and professional advisors tend to charge somewhat more than the same services in Rome or Florence, so budget toward the higher end of the fee ranges if incorporating specifically in Milan.
- The Regime Forfettario flat-tax rate (5% for the first 5 years, 15% after) is genuinely attractive, but the real cost of freelancing in Italy is the roughly 26% Gestione Separata INPS social security contribution — factor that into any income comparison, not just the headline tax rate.
- Under the flat-rate regime you cannot deduct real business expenses; tax is calculated on a fixed percentage of revenue based on your professional ATECO code, so it suits low-overhead service work (consulting, dev, design) better than expense-heavy businesses.
- Electronic invoicing (FatturaPA via the SdI platform) is mandatory for essentially everyone with a Partita IVA in Italy, including flat-rate freelancers — this is a hard compliance requirement, not optional paperwork.
- Hiring a commercialista (Italian accountant) is close to essential for both freelancers and companies — Italian tax and ATECO-code rules are technical and the choice of regime materially affects your tax bill.
- IRAP (the regional business tax) mostly falls away for individuals working as sole proprietors/freelancers after past reforms, but it still applies to incorporated companies like an SRL — this is a real cost difference between the two structures worth weighing before incorporating.
Corporate Tax Rates
VAT Iva
- Standard Rate Pct
- 22
- E Invoicing
- Electronic invoicing via the Italian SdI (Sistema di Interscambio) platform is mandatory for all VAT-registered entities.
- Registration Threshold
- There is no domestic registration threshold — any taxable business activity requires a Partita IVA (VAT number).
Reduced Rates Pct
- 10
- 5
- 4
Irap Regional Tax
- Standard Rate Pct
- 3.9
- Who Pays
- Incorporated businesses (SRL, SPA) generally still need to factor IRAP into annual compliance. A past reform removed IRAP for many individuals operating personally as freelancers/sole proprietors, so this tax is now mainly a company-level concern.
- Region Note
- IRAP is levied regionally, and regions may adjust the standard rate; Lombardy (which includes Milan) generally applies close to the national standard rate, though higher rates apply to banks and financial institutions (4.65%) and insurance companies (5.90%).
Dividend Withholding
- Budget Law 2026 Change
- Under Italy's 2026 Budget Law, corporate recipients continue to benefit from a 95% participation-exemption (PEX) exclusion under IRES, now mirrored at the IRAP level for qualifying dividends, effective from 1 January 2026, with some withholding-rate adjustments for individual shareholders effective 6 April 2026.
- Individual Shareholders Pct
- 26
- Note
- Dividends paid to individuals are generally subject to 26% withholding tax, while EU corporate recipients may qualify for a reduced 1.2% rate or full exemption under the participation exemption regime.
Ires Corporate Income Tax
- Rate Pct
- 24
- Residency Rule
- Resident companies pay IRES on worldwide income; non-residents pay only on Italian-source income. A company is generally treated as Italian tax resident if its registered seat, effective management, or principal place of business is in Italy for the majority of the tax period.
- Description
- Italian companies pay two main corporate taxes: IRES (Imposta sul Reddito delle Società) at a flat 24% on net taxable profits, and IRAP (Imposta Regionale sulle Attività Produttive) at a standard 3.9% regional rate.
- Foreign Owned Company Note
- A company incorporated in Milan (e.g. an SRL) with foreign shareholders is taxed exactly like any other Italian resident company — ownership nationality does not change the IRES/IRAP treatment. A foreign parent company operating only through an Italian branch or permanent establishment is taxed only on the income attributable to that Italian branch.
Freelancer Vs Company Structures
- Practical Decision Guide
- For a solo foreign remote worker or consultant under the ~€85,000 revenue threshold, the Regime Forfettario as a freelancer is generally simpler and lighter on tax and admin. Once revenue consistently exceeds that threshold, the business needs employees, outside investment, or stronger liability protection, forming an SRL becomes the more common next step — many nomads/consultants in Milan start as forfettario freelancers and convert to an SRL later as the business grows.
Forming A Company SRL
- Liability
- Limits personal liability to the capital contributed, unlike sole-proprietor status where the individual is personally liable for business debts.
- Who Its For
- Foreigners planning to hire staff, take on outside investors, limit personal liability, scale beyond the forfettario revenue cap, or who need a more 'corporate' entity to contract with larger clients.
- Admin Burden
- Materially heavier than freelancing: statutory accounts, annual financial statements, notary involvement at incorporation, ongoing bookkeeping suited to IRES/IRAP calculation, and generally the need for an ongoing relationship with a commercialista or accounting firm.
- Tax Treatment
- An SRL is a full IRES + IRAP taxpayer (24% + 3.9% as above) regardless of whether its shareholders are Italian or foreign — there is no separate 'foreign-owned company' tax regime.
- VAT And Invoicing
- Must charge standard VAT (22%) on invoices where applicable and comply with the same mandatory e-invoicing (SdI) rules as any Italian company.
Sole Proprietor Freelancer Partita Iva
- Who Its For
- A foreigner who is an Italian tax resident and wants to invoice clients directly without forming a separate legal entity — the most common route for solo consultants, developers, and remote-work freelancers basing themselves in Milan.
- Admin Burden
- Lighter than a company: no separate corporate bookkeeping, but mandatory electronic invoicing (FatturaPA via SdI) still applies, and a commercialista (accountant) is strongly recommended given ATECO code selection and regime eligibility rules.
- Ordinary Regime Alternative
- Freelancers who don't qualify for or opt out of the flat-rate scheme fall into Italy's ordinary progressive personal income tax (IRPEF) system, plus regional/municipal surcharges, and must charge the standard 22% VAT on invoices.
Social Security
- Rate Pct Fy2025
- 26.07
- Regime
- Gestione Separata INPS
- Surcharge Option
- Freelancers can add a 4% INPS surcharge line to invoices sent to Italian clients as a contribution toward this cost, though this is harder to apply to foreign clients.
- Description
- Self-employed VAT-number holders not covered by another mandatory pension fund and enrolled exclusively in Gestione Separata INPS were charged 26.07% for FY2025 — this is on top of income tax and is often the biggest hidden cost of the freelance route.
Regime Forfettario Flat Tax
- Startup Flat Rate Pct
- 5
- Standard Flat Rate Pct
- 15
- Status
- Fully legal and regulated
- Revenue Threshold
- €85,000
- Eligibility Caveats
- Access requires being an Italian tax resident, and non-EU citizens must define their business structure before registering. There are also restrictions if the freelancer controls an SRL doing the same type of business, or has significant prior employment income.
- Startup Period Years
- 5
- Immediate Exit Threshold
- €100,000
- No VAT No Expense Deduction
- Under this regime you generally don't charge VAT on invoices, but in exchange you also can't deduct real business expenses — tax is instead calculated on a fixed percentage of gross revenue (a 'coefficiente di redditività') that varies by professional activity code (ATECO).
- Description
- Freelancers can benefit from the Regime Forfettario, a simplified tax system that applies a flat tax rate of 15%, reduced to 5% for the first 5 years if certain conditions are met. The headline revenue threshold is €85,000, and if a freelancer exceeds €100,000 in a year the exit from the regime can apply immediately rather than from the following year.
Steps
Obtain a Codice Fiscale (Italian Tax ID)
- Step
- 1
- Description
- Every director and shareholder — Italian or foreign — needs a codice fiscale from the Agenzia delle Entrate before the notarial deed can be executed. EU citizens can obtain it at any Italian consulate abroad or same-day at the tax office in Italy; non-EU citizens should allow roughly 4–10 weeks via consulate.
Choose a Company Name and Secure a Registered Office (Sede Legale) in Milan
- Step
- 2
- Description
- Every Italian company must have exactly one registered office, recorded in the Registro delle Imprese; foreign founders commonly use a Milan business-center domiciliation service rather than renting physical premises, with the address then supplied to the notary and accountant for registration.
Draft the Articles of Association (Atto Costitutivo E Statuto)
- Step
- 3
- Description
- Prepared with a commercialista (accountant) and/or lawyer, then finalized with the notary who will execute the deed.
Deposit Share Capital
- Step
- 4
- Description
- For a standard S.r.l., the legal minimum share capital is €10,000, of which at least 25% (€2,500) must be deposited in a corporate bank account before the deed is signed; the remainder can typically be paid in within 12 months. The bank issues a deposit certificate that must be shown to the notary.
Execute the Incorporation Deed Before an Italian Notary
- Step
- 5
- Description
- The notary verifies the statutes, shareholders, and legal compliance, then finalizes and files the notarial deed (atto costitutivo). This can be done via video/virtual notary or via a Power of Attorney if the founder is not physically in Italy.
File the Comunicazione Unica (ComUnica) with the Chamber of Commerce
- Step
- 6
- Description
- This single filing registers the company with the Registro delle Imprese (Business Register), the tax agency, INPS (social security) and INAIL (insurance) simultaneously. The company legally exists only upon this registration.
Receive VAT Number, PEC Address, and Visura Camerale
- Step
- 7
- Description
- The VAT number (Partita IVA) is usually issued the same day ComUnica is filed; within a few business days the Chamber of Commerce issues the Visura Camerale (certificate of incorporation) confirming the company's registration. A certified PEC email address is mandatory for all Italian companies.
Additional Municipal/sector Permits If Applicable
- Step
- 8
- Description
- Many business activities (retail, food service, etc.) also require a SCIA (Segnalazione Certificata di Inizio Attività) filed through the municipal one-stop desk (SUAP) before actually opening to the public.
Separate Step for non-EU Founders Who Want to Personally Live in Italy
- Step
- 9
- Description
- Owning shares in an Italian company does not itself grant residency. A non-EU founder who wants to relocate to Milan to run the business personally generally needs a separate residence/work permit route (e.g., a self-employment visa or the Italy Startup Visa for qualifying innovative startups); this is distinct from, and additional to, the corporate registration process.
Timeline
- Primary Bottleneck
- Corporate bank account opening is the most commonly cited cause of delay, especially at traditional banks, due to stricter KYC/AML scrutiny for foreign-owned companies.
- Total Realistic Range
- 4–10 weeks end-to-end for a foreign founder, assuming documents and funds are ready
Breakdown
- Document preparation and codice fiscale: 1–2 weeks (EU citizens can be same-day at an Italian tax office; non-EU citizens via consulate should allow 4–10 weeks)
- Notary deed drafting and execution: 1–2 weeks
- Chamber of Commerce (Registro delle Imprese) filing via ComUnica: 5–10 business days
- Corporate bank account opening and share-capital deposit: 2–6 weeks at traditional Italian banks (Intesa Sanpaolo, UniCredit, BNL) due to enhanced anti-money-laundering checks on foreign-owned companies, versus roughly 1–5 business days at fintech providers such as Qonto, which are increasingly accepted for the capital deposit requirement
Costs EUR Local And USD
Notary Fees (Atto Costitutivo)
- Notary Fees (Atto Costitutivo)
- €2,500
Reported range roughly €1,500–€3,500 depending on notary and share capital complexity; figure shown is the midpoint.
EUR
Accountant / Legal / Professional Fees
- Accountant / Legal / Professional Fees
- €3,250
Reported range roughly €1,500–€5,000 for bylaw drafting and formation coordination; Milan-based professionals reportedly charge a 15–25% premium over Rome or Florence.
Minimum Share Capital, Standard S.r.l.
- Minimum Share Capital, Standard S.R.L.
- €10,000
Legal minimum for a standard S.r.l.; only 25% (€2,500) must be deposited before registration, the rest payable within 12 months.
Minimum Share Capital, Simplified S.r.l.s.
- Minimum Share Capital, Simplified S.R.L.S.
- €1.00
S.r.l.s. can technically be formed with €1 of capital, though this is generally not recommended for serious operating businesses.
Minimum Share Capital, S.p.A.
- Minimum Share Capital, S.P.A.
- €50,000
Required for the joint-stock company form, typically used for larger ventures.
Realistic All-in First-year Total for a Foreign Founder's S.r.l.
- Realistic All In First Year Total For A Foreign Founder'S S.R.L.
- €10,000
Reported range roughly €5,000–€15,000 combining notary, government fees, professional fees, plus the share capital itself; some other sources quote a lower €2,500–€3,000 all-in formation cost excluding the share capital deposit.
Legal Structures Commonly Used
S.r.l. (standard limited liability company)
- Notes
- Most common form for foreign founders; combines liability protection with flexible bylaws.
S.r.l.s. (simplified S.r.l.)
- Notes
- Lower-cost entry option with capital as low as €1, but with standardized, less flexible bylaws — generally not recommended for founders with more complex shareholder structures.
S.p.A. (joint-stock company)
- Notes
- Used for larger ventures or those planning outside investment; requires €50,000 minimum share capital.
Branch or representative office of a foreign parent company
- Notes
- A branch can speed market entry by linking directly to the foreign parent; a representative office is limited to non-commercial liaison activity.
Scope Note
Covers local business/corporate tax implications for a foreign-owned company operating in Milan, and the practical freelancer vs. company decision.
Filing Obligations
- Tax Year
- Follows the calendar year for most companies.
- Bookkeeping
- Full statutory accounting records and financial statements are required for incorporated entities — Italian tax law expects a rigorous, well-documented approach from the outset rather than informal bookkeeping.
- Return Form
- IRES and IRAP returns must be filed electronically via the Agenzia delle Entrate (Italian Revenue Agency) portal using form Redditi SC.
- Key Deadlines
- The IRES/IRAP return is generally due by 31 October of the year following the tax year (e.g. 31 October 2026 for FY2025). The balance payment (saldo) is due by the end of the 6th month following year-end (30 June for calendar-year entities), with a first advance payment (acconto) also due around 30 June.
- Payment Mechanism
- Corporate taxes and IRAP are paid via the F24 payment form, typically in two installments during the year.
Milan-based company formation follows standard Italian national procedure (there is no separate Milan-specific company law), executed through the Milan Monza Brianza Lodi Chamber of Commerce (CCIAA Milano Monza Brianza Lodi) and its Registro delle Imprese (Business Register). The most common vehicle for foreign founders is the S.r.l. (Società a Responsabilità Limitata, a private limited company); a simplified low-capital variant (S.r.l.s.) and the joint-stock S.p.A. are also available for larger ventures.
Official Links
Remote Incorporation Note
Non-resident foreign entrepreneurs can incorporate via Power of Attorney granted to an Italian-based lawyer — avoiding any travel, and a local representative can similarly apply for the codice fiscale on the founder's behalf using a notarized and apostilled Power of Attorney. Italy also permits virtual notary signings via secure video platforms for the incorporation deed itself, though some banks still require an in-person KYC step for the corporate bank account.
Local Partner Or Sponsor Requirement
No local partner, Italian co-shareholder, or resident sponsor is legally required to incorporate an SRL — full foreign ownership is permitted under Italian company law. Non-resident founders can complete the entire process without traveling to Italy at all.
AI-generated estimateData refreshed July 2026
Sources cited for this category
These are the sources cited in this business permits & incorporation for foreigners research for this city. Individual figures may not each trace to one of them.
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Data last updated July 2026 · Verify anything important.