The SpA is the most prestigious company in Italy, similar to the PLC in UK and the public corporation in USA. If your business requires trust more than usual, or you need to work with significant letter of credits or loans, you should probably start your Italian venture with a SPA.

Another common reason to setup a SPA is to operate in regulated markets. If you want to open a bank in Italy, an insurance business, intermediate gold, and more, you can operate only if you incorporate an Italian SPA.

Joint Stock Company in Italy – Summary

• Company name: SpA (Società per Azioni)
• Similar companies: Corporation in US, PLC in UK, Ireland, etc, Stock corporation AG in Germany and Austria, SAS in France, SA in Spain, Joint stock company ZAO or OAO in Russia.
• Minimum share capital: Eur 120,000 (only Eur 30,000 should be paid. See below)
• Minimum number of shareholders: One. However 1 shareholder should deposit a bigger share capital. See below.
• Minimum number of directors: One
• Nationality of the shareholders: Any (with some rare exceptions)
• Nationality of the director: Any (with some rare exceptions)
• Limited liability: Yes. Shareholders benefit of a complete limited liability
• Auditing: Required. A Board of Auditors (Collegio Sindacale) of 3 independent auditors should be employed.
• Physical office: Not required (a virtual office is enough to setup the company and to obtain the VAT number)

The minimum capital to be deposited in Italy is Eur 120,000. This expense could be reduced to 25% (Eur 30,000) if your company is incorporated with two or more shareholders. In short:

1. If you incorporate a joint stock company in Italy with one initial shareholder = the total deposit should be Eur 120,000;
2. If you do the same operation with two or more shareholders = the total deposit is only 25% of the sum.

Note: It’s NOT Eur 30,000 for each shareholder, but Eur 30,000 in total. Thus one shareholder should deposit Eur 120,000 while for instance four shareholders deposit Eur 7,500 each. Why? There is no logical explanation other than “it’s the law”, many not completely logical interpretations and my personal view that you can read in my post on Limited Liability Companies in Italy.

The rule is valid for any share capital you pick. Thus – if you decide to setup a joint stock company with Eur 4 millions share capital – you will be required to pay the whole sum if you are alone, and only Eur 250,000 if you are in a group of four equal shareholders.

How to reduce this cost if you are a solely shareholder

The most used solution by solely shareholder to pay only a 25% reduced share capital, is to open the Italian company with two shareholder: you and your foreign company. And if you don’t have a foreign company, you can setup one in a low cost EU jurisdiction such as the UK. You will not find this rule in a law book, and multinational corporations don’t need it, but it’s legal and more common than you think.

When you should probably setup a joint stock company SPA

• When prestige matters more than usual;
• When the business requires significant letters of credit and loans;
• When the law says so (with some exception, you need a SPA to open a bank in Italy, an insurance, a gold trader, an online gambling, and in general manage a regulated business).

When you should NOT setup a joint stock company SPA

• When you don’t have any specific reason to do so.

The SPA is the most expensive of the Italian companies. If there isn’t any specific need, just open a traditional Limited Company (SRL) or a Subsidiary. You can always upgrade the SRL or Subsidiary to a SPA later.

Image source: Library of Congress. Investors wait for news about the South Sea Company, one of the oldest  joint stock company formed in London in 1711.

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