How to start a real estate business in Italy
Italy attracts people from around the world with its varied and scenic landscapes, delectable cuisine, and rich heritage. It is not surprising that it is one of the most desired countries that foreigners not only choose to visit, but to invest in and call their home. The real estate business is one of Italy’s leading industries both for short-rentals and long-term investments. Foreign entrepreneurs considering investing in Italian properties will benefit from learning about the many legal and commercial perks of the market.
The most common way to establish a real estate company in Italy is in the form of a limited liability company, or specifically, either as a società per azioni (S.p.A.), or as a società a responsabilità limitata (S.r.l.), as these are regulated under the Italian law. These forms of commercial organizations are characterized by the company shareholders’ liability being limited only to their participation in the company and hence, they are not held liable with their personal assets for debts of the company, exceeding the limits of their participation (to be determined by their percentage in the company capital). Several key steps are involved in establishing such a company:
- The drafting of the company Articles of Association;
- Collecting the required capital in a provisional bank account;
- Legalizing the Articles of Association by a notary and signing the company Constitutive Act; and
- Registering the company at the Italian Register of Companies.
For types of properties such as those classified as hotels, bed and breakfasts, or farm holiday accommodations, specific certifications and permits may be required. At the conclusion of this process, the company can start its operations.
If a company decides to also register a company trademark, the holder of the trademark (in the case of a company this would be the company representatives) or a duly appointed attorney (acting through a special power of attorney) must submit a formal application for registration to the Italian Patent and Trademark office. The application must include the trademark itself, including the words, drawings, symbols, or sounds, which can distinguish their products and/or services from those of other companies. The trademark must be described in the register in a clear and precise way. The products and/or services relating to the registered trademark will also be indicated. These products and/or services correspond to the classes offered by the Nice Classification of goods and services applied for the registration of marks. Protection is limited to the use of the trademark for the products and/or services as established by the initial application for registration and can not be extended afterwards. The number of products and/or services under which the trademark is protected will determine the costs of registration. The registration of a trademark is valid for 10 years from application filing date, and can be renewed indefinitely every 10 years. A trademark registered at the Italian Patent and Trademark office is only protected in the territory of the Italian Republic. A EU trademark can also be obtained by application at the European Union Intellectual Property Office (EUIPO).
The process of forming a company and registering a trademark requires significant financial investments. When considering starting a company in Italy, a shrewd entrepreneur should consider the distinct innovative SME and startup programmes offered by the Italian Ministry of Financial Development.
Pursuant to the Italian law, an innovative SME is a company that follows the following criteria: a) it has a residence in Italy, or in another country of the European Economic Area but with a production site or branch in Italy; b) its last financial statements and consolidated financial statements have been certified; c) it is not listed on a regulated market; and d) it is not simultaneously registered in the special section of innovative startups.
Conversely, an innovative startup company is a company that: a) has incurred R&D and innovation expenses equal to at least 3% of the higher value between its turnover and its cost of production; b) employs highly qualified personnel (at least 1/5 of the personnel have obtained PhD degrees, are PhD students or researchers, or at least 1/3 have obtained a master’s degrees) and c) the owner, custodian or licensee of the company possesses at least one patent or is the owner of a registered software.
Innovative SMEs and startups can benefit from the following measures: tax incentives for investment in capital; free and simplified access to the Guarantee Fund for SMES; exemption from stamp duties for documents filed at the Chamber of Commerce; raising of capital through equity crowdfunding campaigns; completion of services for international company recognition; derogations from ordinary corporate regulations; extended deadlines for covering losses; and remuneration through equity participation instruments.
In addition to understanding the legal and government requirements of starting a real estate business in Italy, a thorough understanding of the local real estate market and meticulous investigation into each property are necessary to successfully manage the real estate company. Our experts have long-standing experience in the Italian real estate market and are here to provide investors with solid, dependable guidance through each step of the process. We assist foreign clients in familiarizing themselves with the local market, approaching a real estate agency, and finding the right property. We investigate specific properties by conducting exhaustive expert analyses to ascertain the property’s legal status, discover any ownership titles, and determine if there are any third party rights and burdens over it. Moreover, we provide comprehensive technical surveys studying the state, maintenance, urban planning, and land registry status of the unit. Lastly, we draft, prepare and file the required documents (preliminary contract; final deed; notary verification) in compliance with standing Italian legislation, and successfully close sales and purchase agreements on our clients’ behalf.
Once the real estate business is formed and the properties are purchased, our clients can continue to depend on our experts to provide full, trustworthy expertise in the management of their properties whether they be long or short term rentals, student apartments, or luxurious properties. The desired representation and continued support can be offered via a contractual agreement between the parties involved.
An efficient team of judicious accountants, astute real estate agents and resourceful attorneys specialized in commercial, real estate, and tax law will lead prospective investors through the process of creating a company in Italy; and, subsequently, we will assist with the purchase of real estate assets in Italy and provide support in the management of the business.
We are continuously committed to our clients’ success and facilitate all dealings and transactions with perfection. We provide:
- drafting of Power of Attorney acts to allow us to represent our clients where and when needed for the establishment of the company;
- comprehensive advice and assistance during the process of registering a trademark in the Italian Patent and Trademark office;
- consultancy and compilation of the documents needed to apply for the innovative SME and startup programmes offered by the Italian Ministry of Financial Development;
- efficient and accurate accounting and book-keeping services;
- specific advisory and consultancy services in the purchase of property and continued technical assistance and legal reviews related to future property management.