From the very moment my firm open the doors in 2005, I was regularly asked if Italy allows shelf companies.
If you are not familiar with the term, a ‘shelf company’ or ‘ready made company’ is a company incorporated by a firm without a client. The company is then archived (thus “put on a shelf”) and sold only when a client has an urgent business. This type of companies are quite common in offshore countries, and like every human tool they can be used for a good purpose (i.e. store assets of the company during a merger or acquisition) or for a bad use (mostly evade taxes).
Even The Economist – the prestigious business magazine – has more than a few articles about the good use of the shelf companies (and almost the same number of articles about their bad use). So a few years ago I accepted to set up a group of shelf company for one of my clients, a big company formation agent that had proven many time to be NOT interested in tax fraud.
If you are a lawyer you probably think that company formation is not posh nor sophisticated. You are right. But company formation agent bring many clients to Italy every year and they can be very good clients.
The main reason of my decision wasn’t the articles of The Economist of course – although I am a loyal reader from more than 15 years – but the idea that nobody plan to avoid taxes through an Italian company. Italy is no fiscal heaven, on the contrary the company formation process can be slow and for some projects timing is everything. If a client need to enter the Italian market very fast, why don’t give him a shelf company with a VAT tax number and everything else in place?
I can be wrong, but I believe that I have been the first lawyer in Italy to setup a group of shelf companies in the same day. If you want to do the same, this is what I have learned from my experience:
- Shelf companies are very expensive in Italy. Forget to pay US$50 or £20. Even the incorporation of a small limited company burn around Eur 2,500 between notary and taxes. And you have to pay again when you transfer the shares of the Italian company to the new owner.
- Italy is not a fiscal heaven, so there is no risk that your client want a shelf company to evade taxes (I know, lawyers love to say ‘avoiding taxes’ not ‘evading taxes’ but – if you are a lawyer – you know that sometimes the client doesn’t tell you the whole story).
- But be careful. Each shelf company come with a VAT tax number, and this element is very appealing to any person interested in starting a VAT fraud (the so called ‘VAT carousels’). If you are not familiar with the term, I am not going to school you. You just need to know that it’s a crime and hit multiple European country every time, like a ‘federal crime’ in the United States. If you are a consultant, stay away from it.
- If you are the client, check the provider. They should be a team of lawyers, chartered accountants and chartered secretaries with a strong and very practical experience,. Without such a team, the share transfer can take more time that incorporating a new company. Make no sense to have a company if it’s not fully operational.
Is it worth to use a shelf company in Italy?
As usual, there isn’t universal answer. In my experience, a ready made company can be useful in two cases:
- if you can’t wait to enter in the market;
- if you need an aged company (this can be required to become a contractor).
If you are a consultant, it can be useful to double check your client. Said that, a shelf company is legal in Italy, but it can be very expensive.
Image source: greenmarlin at Flickr.com
14 Responses
Hi Stefano,
First of all thank you for providing such a useful information to all of us. Your posts are indeed helpful to understand the Italian Laws.
We are planning to open a subsidiary in Italy. We are open for any of the options available. Do you provide services to setup a company in Italy. Please go through our website to know more about us.
Waiting for your reply.
Thanks,
Naik
Hi Naik, I checked the website and it looks like that you are expanding. Congratulations! I think I can help. I don’t do company formation anymore (I focus on 2-3 big operations per year, and teach or advise young entrepreneur the rest of the time). But my colleagues still use my procedures. I will pass your contact detail to them. I have also agreed a discount for any client who’s coming from the website. Rgs
Thank you Stefano…
I will wait for colleague’s reply.
Ciao,
Naik
Hi Sir,
I am looking for a company that provide a readymade company service, and unfortunatly I believe you no longer do.
Can you please email me details of a company that may do!
thanks
Hi Liam. I do acquire (real) companies. This is one of my common services. On the contrary, I do not provide shelf companies, if this is what you mean. Anyway, I can publish your comment. So a ready made companies provider can eventually read it and contact you directly. Rgs
Dear Sir,
I would like to purchase share from any ready made company.Is it possbible and start a business in Italy.ple send me details information like costing duration etc.
best regards
monir
Dear Monir, I don’t sell this type companies anymore, but many provider read this blog. Probably someone is going to contact you.
Hi Stefano,
I´m really interested in buying Shelf companies in Italy . Do you have any provider to suggest?
we are a CSP based in Denmark with 10 yeras experience and now we are expanding the business abroad. you can check our website at : http://www.rexkern.com
Best Regards
Hi Daniel,
I can contact a provider for you. Any particular requirement?
Rgs
Michele
Dear Stefano,
we would like to form some italian company. We need an aged trademark used on manufacturing, construction.
As soon as I know you don’t do formation anymore but, perhaps, your colleagues do?
Dear Eldar,
Sorry, no. Just formation of brand new company. If it can interest.
Rgs
Michele
Hi, I would like to know what is the requirements for me as a Malaysian to set up a trading company in Italy and a company account.
Do you have any ready made company for sale?
Do i personally need to go to Italy?
Hello Phang
1. You do NOT need to go to Italy.
2. Malaysian can open a company in Italy. In fact a few years ago we setup the first Malaysian company to ever export organic food to Italy.
3. With the new legislation we can setup a company with just EUR 1 share capital. We don’t work much with ready made companies anymore.
If you need more information you can contact me on Clarity https://clarity.fm/stefanotresca
All the best
Stefano
I want to open a small ready made company in italy