Legal and Tax Planning for Business Transactions

Foreign clients who intend to start a business in Italy can do it by opening a manufacturing or selling branch, or by setting up a partnership, limited liability company or corporation.

Under current law, under certain circumstances corporations and limited liability companies can elect to be treated as fiscally transparent entities, thereby providing the benefit of limited liability while avoiding double taxation of corporate profits.

Depending on the legal form chosen to conduct the business, different tax rules would apply. Different lines of business can be conducted through separate entities and corporate entities belonging to the same group can be consolidated, for tax purposes, with the result of offsetting profits and losses and reducing the overall tax burden within the group.

Italian holding companies can also benefit from the participation exemption regime which exempts 95 percent of the dividends received and gains realized through the sale of stock held in other companies.

In this area of law, we assist our foreign clients in the following:

• choosing, forming and setting up the Italian entity;
• setting up the Italian entity's banks account;
• opening an office in Italy;
• employing staff and personnel;
• obtaining visa for foreign employees assigned to the Italian subsidiary;
• setting up the intra group transactions between the Italian subsidiary and its foreign parent or affiliates;
• dealing with Italian transfer pricing issues;
• handling withholding tax issues on outbound transfers of moneys (dividends, interest and royalties);
• obtaining relief from tax on outbound dividends, interest and royalties under the EU directives;
• qualifying for the participation exemption for dividends and gains from the sale of stock. 
• reducing Italian taxes on the profits of the Italian subsidiary through proper planning.
• managing the liquidation of the Italian entity and repatriation of profits in a tax efficient way;
• carrying out mergers, acquisitions or other corporate reorganizations;
• entering into joint venture, agency, distribution, franchising or other collaboration agreements with Italian counterparts for the expansion of the business in Italy;
• registering trademarks, patents or other intellectual property in Italy.