How to establish a company with foreign partners in Italy? A comprehensive legal guide for Turkish investors on SRL, SPA, foreign legal entity partners, reciprocity requirements, notary, tax number, Commercial Registry, VAT, bank account, and residence permit processes.

Entrance

Establishing a company with foreign partners in Italy is a significant legal option for investors seeking to access the European Union market, create a commercial presence in Italy, conduct export and import activities based in Europe, operate under an Italian brand, or build stronger corporate relationships with customers and suppliers in Europe. For Turkish investors in particular, Italy holds strategic importance due to its geographical proximity, access to the EU internal market, strong industrial infrastructure, and commercial potential in sectors such as fashion, design, food, machinery, automotive, logistics, tourism, software, and real estate.

It is possible to establish a company with foreign partners in Italy. According to the Italian Trade Agency's investment information, commercial activity in Italy can be carried out as a sole proprietorship, by establishing a new company, or by acquiring shares in an existing company; these possibilities apply to both EU citizens and citizens of non-EU countries. However, for non-EU investors, additional issues such as valid residence permits, reciprocity requirements, notarial procedures, tax identification numbers, apostille-translation of foreign documents, declaration of ultimate beneficiary, and bank compliance processes should be carefully considered.

Therefore, establishing a company with foreign partners in Italy is not a simple process of choosing a company name or registering with the commercial register. Factors such as whether the partners are individuals or legal entities, their nationality, the representation rights of foreign companies, capital ratios, company type, articles of association, directors' powers, tax and VAT status, bank accounts, operating licenses, and immigration law requirements must all be considered together.

Is it possible to establish a company with foreign partners in Italy?

In Italy, it is possible to establish companies with foreign partners. Foreign individuals or companies can become partners in a company to be established in Italy or acquire shares in an existing Italian company, provided they meet the necessary conditions. In practice, the most preferred company type by foreign investors the Società a Responsabilità Limitata, or SRL, limited liability company structure. For larger-scale, multi-shareholder investments or those aiming for a public offering, the Società per Azioni, or SPA, joint-stock company structure may be preferred. The Italian Trade Agency lists SRL and SPA as the main types of capital companies in Italy; it states that in SRL, the capital consists of "quotas," while in SPA, the capital consists of shares.

The first distinction to consider when establishing a company with foreign partners is whether the partner an EU/EEA citizen or company . Individuals from European Union and European Economic Area countries can, as a rule, operate in a similar manner to Italian citizens. For individual or corporate investors from non-EU countries, issues such as reciprocity or valid Italian residence permits come into play. The Italian Ministry of Foreign Affairs states that, as a rule, the enjoyment of civil rights by foreigners that are granted to Italian citizens is subject to the condition of reciprocity, and this rule also applies to foreign legal entities.

What is the Reciprocity Clause?

The reciprocity requirement means that for non-EU citizens and foreign legal entities to be able to carry out certain civil and commercial transactions in Italy, Italian citizens must also be able to exercise similar rights in the relevant foreign country. This requirement may be important for establishing a company, becoming a partner in an existing company, acquiring real estate, or certain transactions to be conducted before a notary public.

According to the Italian Notaries Association, non-EU citizens are generally subject to the reciprocity requirement to conduct legal transactions valid in Italy; in transactions requiring notary intervention, such as company formation, the notary assesses the existence of this requirement on a case-by-case basis and, if necessary, utilizes information from the Italian Ministry of Foreign Affairs.

However, the reciprocity requirement is not sought in every case. According to the Italian Ministry of Foreign Affairs, non-EU citizens holding valid residence permits and legally residing in Italy under certain statuses may be exempt from reciprocity checks. Similarly, different assessments may be made for EU and EEA citizens, certain long-term legal residents, refugees, and citizens of countries with which certain investment agreements exist.

While company formation is generally possible for Turkish investors in practice, a notary must conduct an assessment regarding reciprocity, residency status, and documents before the actual transaction. Therefore, although the general answer to the question "Can a Turkish citizen establish a company in Italy?" is yes, it should be checked before the establishment process whether the partner is an individual or a company, whether they have residency in Italy, and whether the documents have been prepared in accordance with the procedures.

Which type of company should be chosen for a company with foreign partners?

In Italy, the most preferred structure for establishing a company with foreign partners is the SRL (Small and Medium-sized Enterprise). SRLs are a practical option due to their limited liability, the ability to be established with a single or multiple partners, flexibility in capital and management structure, and suitability for models involving foreign individuals or legal entities. According to the Italian Trade Agency, the minimum capital for an SRL can be as low as €1; if the capital is between €1 and €10,000, contributions can only be in cash and must be fully paid at the time of incorporation. Management in an SRL can be structured through a single director, a board of directors, or jointly or separately authorized directors.

SPAs, on the other hand, are suitable for larger investments. They may be preferred if the goal is a large number of partners, significant capital, investment funds, corporate finance, an advanced IPO, or a more complex share structure. According to the Italian Trade Agency, the minimum capital for an SPA is €50,000, making this company type more suitable for large investments and structures with numerous shareholders.

If a foreign investor is planning a small to medium-sized business, especially if the goal is for a Turkey-based company to establish a subsidiary in Italy or for a company to be formed with Turkish individuals as partners, an SRL (Small and Medium-sized Enterprise) is often a more balanced solution. However, the type of company should not be chosen without considering the size of the investment, sector permits, financing needs, ownership structure, and future share transfer plans.

Required Documents for Individual Foreign Partners

If a company is to be established in Italy with foreign natural persons as partners, the partners' identity and tax information must first be prepared. Generally, this includes a passport, address, contact information, marital status, Italian tax identification number ( codice fiscale), share percentage, capital commitment, and a special power of attorney if the partner will not be present at the company's incorporation.

The Codice fiscale is the basic identification number for official transactions in Italy. According to the Italian Revenue Administration, foreigners not residing in Italy can apply for a tax identification number at the Italian consular authorities in their country of residence. Italian consular statements also indicate that foreign citizens can request the Codice fiscale through the Italian consulate responsible for their place of residence.

If the individual partner is going to Italy to sign the documents before a notary, they can do so with their passport and codice fiscale. If the partner is not going to Italy, the power of attorney, whether drawn up in Türkiye or another country, must be in a format acceptable to the Italian notary. The power of attorney must clearly state the powers granted, such as establishing a company, signing the articles of association, committing capital, acquiring shares, appointing managers, handling tax and registration procedures, and opening a bank account.

Required Documents for Foreign Legal Entity Partners

When establishing a company with foreign partners, the list of required documents is more comprehensive if the partner is a Turkish company or another foreign legal entity. The Italian notary wants to verify whether the foreign company actually exists, whether the person signing on behalf of the company has the authority to represent it, and whether the decision to establish a partnership in Italy was made in accordance with proper procedures.

Therefore, for a foreign legal entity partner, the following documents are generally required: a current trade registry certificate, a business license, the company's articles of association, documents demonstrating representation authority, signature authorizations, a decision from the competent authority regarding the establishment of a company in Italy or becoming a partner in a company to be established, the passport of the authorized representative, and information from the Codice Fiscale. If the documents are in a foreign language, Italian translation and, depending on the type of document, apostille or consular authentication may be required. The Italian Trade Agency's business establishment guide states that foreign company documents must be translated into Italian by a sworn translator.

In structures with foreign legal entity partnerships, the ultimate beneficiary, or titolare effettivo, must also be determined. In Italy, the declaration of the ultimate beneficiary is important within the anti-money laundering system for companies and legal entities. The official titolare effettivo page of the Registro Imprese shows that ultimate beneficiary procedures are linked to companies, declaration, antiriciclaggio (anti-money laundering), and digital signature processes.

Preparation of the Articles of Association and Partnership Structure

In companies with foreign partners, the articles of association should not be viewed as a mere incorporation document. The articles of association define the company's future operations, the rights of shareholders, the management style, share transfers, profit distribution, and the basic framework for resolving disputes.

The articles of association should clearly regulate the following matters: company name, legal address, field of activity, amount of capital, share percentages of partners, method of capital payment, identity of directors, whether representation authority is exercised individually or jointly, restrictions on share transfer, pre-emption rights, special rights of partners, non-compete clauses, profit distribution, financing obligations, and exit procedures.

Regarding SRLs, the Italian Trade Agency states that special attention should be paid to the preparation of the articles of association in order to make the best use of the company's flexible structure, and that the company comes into existence after the notary submits the document to the Commercial Register.

In structures involving foreign partners, the articles of association alone may not be sufficient. It can be beneficial to also a shareholders'agreement between the partners. This agreement can detail investment obligations, management control, share sale conditions, deadlock mechanisms, confidentiality, non-compete clauses, financing, penalty clauses, and dispute resolution. Especially in structures established between a Turkish company and an Italian partner, or partners from other countries, this agreement reduces potential partnership disputes in the future.

Notary Procedure and Registration of the Company in the Commercial Registry

In Italy, a notary plays a crucial role in the establishment of capital companies such as SRLs or SPAs. The company incorporation document is drawn up in the presence of a notary and submitted by the notary to the competent Commercial Register. The Italian Trade Agency states that the incorporation document of companies such as SRLs and SPAs must be signed in the presence of a public notary, and that the company does not officially come into existence until it is registered with the Commercial Register.

The Commercial Register is the system that discloses essential information about a company to third parties, such as its name, articles of association, registered office, directors, capital, and any subsequent changes. According to Registro Imprese's (Comunicazione Unica) statement, this electronic application brings together notifications to the Commercial Register, the Italian Tax Administration, INPS, INAIL, and, where applicable, SUAP, under a single procedure.

Therefore, company registration is not considered complete simply by a notary's signature. The notary process, registration in the Commercial Registry, codice fiscale, partita IVA, social security, and commencement of business notifications are all complementary stages.

Comunicazione Unica, Partita IVA and Administrative Notices

After the establishment of a company with foreign partners, the Comunicazione Unica d'Impresa process is carried out to enable the company to begin its official economic life in Italy. This system is an electronic notification mechanism that simplifies the relationship between companies and public administrations.

According to Registro Imprese, Comunicazione Unica may consist of files including the Trade Registry model, Agenzia delle Entrate model, INPS model, INAIL model, and, if necessary, the SCIA notification for SUAP. Transactions such as Trade Registry registration, requesting tax and VAT numbers, INPS registration, INAIL position registration, and commencement of business notification can be carried out through this system.

The company may need to open a partita IVA (Individual Tax Return) for VAT purposes . For companies with foreign partners engaged in e-commerce, services, import-export, consulting, manufacturing, or commercial sales, VAT and invoicing procedures should be planned from the outset. Incorrect VAT registration, wrong activity codes, or incomplete activity reporting can cause the company to encounter tax and accounting problems from the very beginning.

PEC, Digital Signature and Official Notification Risks

In Italy, companies are required to use PEC — posta elettronica certificata — as their official electronic communication address . PEC is a legally valid registered electronic mail system. Tax authorities, chambers of commerce, courts, municipalities, and other public institutions can send notifications to a company's PEC address.

One of the most common mistakes in companies with foreign partners is opening the PEC (Personal Electronic Mail) address only for the purpose of incorporation and then not regularly monitoring it. This poses a serious risk because official notifications in Italy can be made via the PEC, and company officials may have difficulty claiming they missed deadlines on the grounds that they did not read this notification.

Therefore, in companies with foreign partners, access to the PEC (Process Electronic Communications Center), who will monitor it, how incoming notifications will be archived, and under what circumstances they will be reported to the Turkish partners or the foreign head company should be determined from the outset.

Bank Account Opening and Compliance Review

In Italy, opening a bank account is a crucial step in establishing a company with foreign partners. Banks may conduct detailed checks, particularly for companies with foreign individuals or legal entities as partners, in accordance with anti-money laundering and know-your-customer regulations.

The bank typically requests to see the company's incorporation documents, trade registry records, articles of association, directors' identification documents, ownership structure, ultimate beneficiary information, tax identification number, VAT identification number, business activity statement, source of funds, and expected transaction volume. For companies with Turkish partners, the source of capital or working funds sent from Türkiye may also be inquired about. Therefore, the bank file should be prepared as part of the incorporation strategy, not hastily after the notarization process.

If there is a foreign legal entity as a partner, the bank may wish to see the chain of ownership and the ultimate beneficiaries. For companies within the chain, the bank may request trade registry documents, ownership percentages, management documents, and signature authorizations. If there are inconsistencies in the documents or if the source of funds cannot be explained, the bank account opening may be delayed or rejected.

Does Establishing a Company with Foreign Partners Grant a Residence Permit?

Establishing a company with foreign partners in Italy, or becoming a partner in an Italian company, does not, by itself, grant a residence permit. This is particularly critical for Turkish investors. Being a company partner does not automatically grant the right to live, work, or actively manage a company in Italy.

If the foreign partner will only be a passive investor in Italy and will monitor the company from afar, a separate residence permit may not be required for the company partnership; however, if a long-term stay, work, or management activity is planned to be carried out in Italy, the appropriate visa and residence permit type should be evaluated separately.

For foreign investors establishing a company in Italy, various options may arise, including self-employment visas, investor visas, startup visas, work permits, or family/long-term residence permits. However, each is subject to different conditions. Therefore, company formation and immigration law strategy should be planned together; one should not automatically expect to obtain a residence permit simply because they have established a company.

Tax and Transfer Pricing in Companies with Foreign Partnerships

Tax planning is of particular importance in companies with foreign partners. Transactions such as the sale of goods, invoicing for services, management services, licensing fees, brand usage, software services, consulting, or debt relationships may be established between the parent company in Türkiye and the SRL in Italy. These transactions must be conducted in accordance with arm's length and transfer pricing rules.

In Italy, the company may face IRES, IRAP, VAT, withholding tax, social security, and local tax obligations. If the Turkish company is a partner, the Turkey-Italy double taxation agreement, dividend distribution, service fees, withholding tax, intragroup financing, and permanent establishment risk should also be analyzed.

In particular, companies established in Italy must have a genuine business activity. Structures created solely for tax advantages or invoicing purposes, lacking personnel, offices, operations, or management centers, may be questioned by tax authorities. Therefore, the economic essence, commercial justification, and record-keeping systems of a company with foreign partners must be firmly established.

Risks of Disputes Between Partners

One of the biggest risks in companies with foreign partners is disagreements between them. Partners from different countries may have different business cultures, different expectations, and different legal systems. Therefore, relying solely on the Italian articles of association is often insufficient.

The following issues should be regulated in detail in the partners' agreement: who will have control of the management, which decisions will require unanimous consent and which will be taken by majority vote, how capital increases will be carried out, how losses will be financed, what rights will the other partners have if one partner wants to sell their shares, how the rights to jointly sell or participate in the sale will operate in case of a company sale, how the company will be managed in case of a deadlock, will confidentiality and non-compete clauses apply, and will the dispute be resolved in an Italian court or through arbitration?

If these matters are not resolved from the outset, even if the company is successful, serious disputes may arise among the partners regarding control, profit distribution, share transfer, or management authority.

Most Common Mistakes

The most common mistake in establishing a company with foreign partners in Italy is viewing the company formation process as merely a notarization procedure. However, the notarization process is only one part of the process; tax, banking, registry, PEC (Process Electronics Certificate), operating license, and ownership structure are equally important.

The second mistake is the incomplete preparation of foreign company documents. In cases where a Turkish company is to become a partner, the notarization process may not be completed if the trade registry documents, power of attorney, decision text, apostille, and Italian translation are missing.

The third mistake is the standard preparation of the articles of association. In structures with foreign partners, provisions regarding share transfer, management, profit distribution, representation, and deadlock should be carefully regulated.

The fourth misconception is the belief that establishing a company will secure a residence permit. Company partnership and the right to live and work in Italy are separate legal processes.

The fifth mistake is underestimating the bank account and end-beneficiary process. Opening a bank account can be severely delayed for companies with unexplained funding sources, unclear ownership structures, or inconsistent UBO (Ultimate Beneficiary Information) details.

Conclusion

Establishing a company with foreign partners in Italy is a powerful legal and commercial tool for Turkish investors and other foreign capital owners in terms of accessing the European Union market. Foreign individuals or companies can become partners in companies such as SRLs or SPAs in Italy, establish new companies, or acquire shares in existing companies, provided they meet the necessary conditions. However, for non-EU partners, the reciprocity requirement, valid residence permit, notary audit, document authentication, tax identification number, and translation-apostillation processes must be carefully managed.

The most common and practical structure in most cases is the SRL (Small and Medium-sized Enterprise). Due to its limited liability, flexible management, and suitability for structures with foreign partners, the SRL is a strong option for small and medium-sized investments. For large-capital, multi-shareholder, or publicly traded companies, a SPA (Small and Medium-sized Enterprise) can be considered. The company formation process includes notarization, articles of association, registration with the Commercial Registry, Comunicazione Unica (Unique Company Form), partita IVA (Individual Tax Return), PEC (Processing Endowment), declaration of ultimate beneficiary, bank account, and operating permits – all of which are interconnected steps.

A properly prepared company structure with foreign partners can provide an investor with a corporate presence in Italy, access to the European market, commercial reliability, and long-term growth opportunities. Conversely, incomplete documentation, incorrect company type, standard articles of association, unclear ownership structure, banking compliance issues, or confusing company formation with residence permit applications can create serious legal and financial risks. Therefore, investors wishing to establish a company with foreign partners in Italy should evaluate the process comprehensively, considering company law, tax law, immigration law, notarial procedures, and international trade planning.