Legal forms of business in Italy 2026: the right structure for your work

Last reviewed: November 2026 · Reviewed by Stéphane Gombauld, tax expert, technologist and digital nomad

You want to invoice clients from Italy, or set up an Italian company for a business you run from anywhere. After this guide you will know the main legal forms, what each costs in tax and admin, and which one fits your activity.

Italy legal forms of business in 2026: the key figures

Is this guide for you?

Read on if you…

• are a freelancer or consultant deciding between a VAT number and a company in Italy;
• are a founder looking at an SRL for a small team or a holding;
• plan to run an Italian company while spending much of the year abroad.

Probably not your case if you…

• work only as an employee on Italian payroll. No business structure is needed;
• are setting up a large group with outside investors. You need tailored corporate and legal advice.

Which legal forms exist in Italy?

Sole professional or sole trader

You register a VAT number (partita IVA) with the Agenzia delle Entrate. It is free and takes a day. Professionals (consultants, designers, developers) produce lavoro autonomo income. Traders and craftspeople run an impresa individuale, also registered with the Business Register (Registro delle imprese).

You are personally liable for all debts. Profit is taxed at IRPEF rates of 23% to 43% plus local surcharges.

The forfettario regime

This is not a legal form but a tax regime for individuals. You pay 15% on a notional profit: revenue times a coefficient (78% for most professionals). New activities pay 5% for five years. You charge no VAT.

Conditions: revenue up to EUR 85,000, no employee income over EUR 35,000 the year before, and no invoicing mainly to a former employer. If revenue exceeds EUR 100,000 during the year, you leave the regime immediately.

Partnerships: SNC and SAS

In an SNC (società in nome collettivo) all partners have unlimited liability. In an SAS (società in accomandita semplice) silent partners are liable only up to their contribution. Both are tax-transparent: profit is split and taxed in each partner's IRPEF return, whether distributed or not. IRAP still applies at partnership level.

SRL and SRLS

The SRL is Italy's standard limited company. Liability is limited to the capital. The minimum capital is EUR 1, but under EUR 10,000 it must be paid in cash and part of profits goes to a legal reserve. The SRLS uses standard articles of association, with no notary fee, though notary stamp and registration costs remain.

SPA

The SPA is the joint-stock company for larger projects. Minimum capital is EUR 50,000. It needs a board of statutory auditors (collegio sindacale) and can list on a stock exchange.

How do the entity types compare?

How much tax does each structure cost?

Here's the catch with companies. The 24% IRES and 3.9% IRAP look low, but taking money out costs another 26% on dividends. EUR 100 of profit becomes about EUR 72 after company taxes, then about EUR 53 after dividend tax.

Compare a freelancer in the forfettario regime with EUR 80,000 of revenue. Notional profit is EUR 62,400. At 15%, tax is EUR 9,360; at 5% for a new activity, EUR 3,120. INPS contributions come on top for both.

Honestly? Under EUR 85,000 of revenue, the forfettario usually wins. Above that, the choice is between ordinary IRPEF on your full profit and an SRL that keeps profit in the company at 27.9%. An SRL also gives limited liability and is easier to sell or share with partners.

Deductible costs differ too. Forfettario freelancers deduct nothing beyond INPS. Ordinary freelancers and companies deduct actual costs. See business expenses in Italy and corporate income taxes in Italy.

How do you set up an SRL in Italy?

1. Get an Italian tax code (codice fiscale) for every shareholder and director. Non-residents can request it through an Italian consulate.
2. Choose name, activity code and registered office. The office must be a real Italian address.
3. Sign the deed before a notary. Since December 2021, SRLs with cash contributions can be incorporated by video conference on the notaries' platform. You need a qualified digital signature.
4. Pay in the capital and the registration costs: registration tax, stamp duty and the annual Chamber of Commerce fee.
5. Register with the Business Register. The notary files the deed; the company gets its VAT number and a certified email (PEC) address.
6. Notify the start of activity (ComUnica and, if needed, SCIA with the municipal one-stop shop) and register with INPS and INAIL.

Non-EU nationals not resident in Italy can be shareholders only if Italy's reciprocity condition is met with their country. Check it before signing.

For hands-on support, Heavnn helps with business setup.

Can you run an Italian company from abroad?

Yes, but where you take decisions matters more than where the company is registered.

Management and control. A company is tax resident where its effective management (sede di direzione effettiva) sits, meaning where strategic decisions are made continuously. Since 2024, article 73 of the TUIR also looks at day-to-day management. If you sit in Portugal and run your SRL from there, Portugal may claim the profits.

The reverse risk. A foreign company run by you from your Italian home can be treated as Italian resident. The Agenzia calls this esterovestizione. The result: 24% IRES and 3.9% IRAP on all profits, plus penalties.

Permanent establishment (PE). A PE is a fixed place of business that creates a taxable presence. Working regularly from Italy for a foreign company can create one under article 162 TUIR and the relevant treaty. Check international tax treaties of Italy for your country pair.

Your personal status matters as much as the company's. Before you move, read tax residency in Italy. For comparison, see legal forms of business in Portugal and legal forms of business in Spain.

Common mistakes (and what they cost)

• Crossing EUR 100,000 of revenue under forfettario. You exit mid-year, and VAT applies from that invoice. The VAT you did not charge comes out of your margin.
• Running a foreign company from your Italian home. It is deemed Italian resident, so all profits face 27.9% plus penalties of up to 120% of the unpaid tax.
• Holding control of an SRL linked to your freelance work. This bars the forfettario, so the Agenzia reassesses your income at full IRPEF rates.
• Paying yourself only in dividends. IRES, IRAP and 26% stack up. A mix of salary and dividends is often cheaper.
• Using a virtual office without real activity. The registered office is questioned, and banks or the Agenzia may refuse or suspend your VAT number.

Frequently asked questions

What is the best business structure for a freelancer in Italy?

For revenue up to EUR 85,000, a sole professional VAT number under the forfettario regime is usually best: 15% tax on a notional profit, 5% for new activities, and no VAT. Above that, compare ordinary IRPEF with an SRL. The SRL suits those who reinvest profit, hire or need limited liability.

What is the minimum capital for an SRL in Italy?

EUR 1. Since 2013, an SRL can be formed with any capital from EUR 1. Below EUR 10,000, contributions must be in cash and a share of profits must be set aside as a legal reserve. The SRLS uses standard articles and caps capital at EUR 9,999.99. An SPA requires EUR 50,000.

Can a foreigner open a company in Italy?

Yes. EU citizens and legally resident non-EU nationals have the same rights as Italians. Non-resident non-EU nationals can own shares if their country grants reciprocity to Italians. Every shareholder and director needs an Italian tax code. Since 2021, an SRL can be formed by video conference with a notary, using a digital signature.

How is an Italian SRL taxed?

The SRL pays IRES at 24% on profits and IRAP, a regional production tax, at 3.9% in most regions. When profits are distributed, resident individuals pay a 26% final tax on dividends. Salaries and director fees paid to you are deductible for the company but taxed in your IRPEF return, with INPS contributions.

Can I run an Italian SRL while living abroad?

Yes, but the company's tax residence follows its effective management. If strategic and day-to-day decisions are made from another country, that country can tax the profits. Keep board meetings, key decisions and management staff in Italy, or choose a structure in your country of residence. A treaty tie-breaker may apply.

What is the difference between SRL and SRLS?

The SRLS is a simplified SRL. It must use the standard articles fixed by decree, and its capital must be between EUR 1 and EUR 9,999.99. The notary charges no fee for the deed, so setup is cheaper. Tax treatment is identical. You can convert an SRLS into an ordinary SRL later.

Related guides

• Corporate income taxes in Italy: IRES, IRAP and dividends
• Business expenses in Italy: what you can deduct
• International tax treaties of Italy
• Tax incentives for expats and digital nomads in Italy
• Legal forms of business in Portugal
• Legal forms of business in Spain
• Tax landscape overview of Italy
• All country tax guides

Sources

• Agenzia delle Entrate – VAT number and business taxes
• Normattiva – Civil Code (book V) and TUIR articles 73 and 162
• Registro Imprese – Italian Business Register
• Impresa in un giorno – government one-stop shop for businesses
• INPS – contributions for self-employed and company directors
• PwC Worldwide Tax Summaries – Italy

This guide is general information, not personalised tax advice. See how we research and review.