How to Establish a Limited Liability Company (SRL) in Italy

Establishing a Limited Liability Company (SRL) in Italy is not just a path to entrepreneurship — it is increasingly used as a strategic solution in Italian estate planning, particularly by foreign nationals and families with transnational ties. For those managing cross-border wealth or navigating probate in Italy, an SRL can serve as a legal and tax-efficient vehicle for asset protection, succession planning, and the sale of inherited property in Italy.

Many individuals — including US citizens inheriting property in Italy — choose to form an SRL to help manage or restructure inherited assets, organize donations in Italy, or reduce exposure to inheritance tax in Italy and Italian estate tax. When used correctly, an SRL can simplify the often complex legal and fiscal landscape of Italian inheritance law.

SRL vs. SRLS: Choosing the Right Company Type

Italy offers two types of limited liability companies:

Ordinary SRL (Società a Responsabilità Limitata)

The ordinary SRL, governed by Article 2463 of the Italian Civil Code, is the most flexible company structure. It allows shareholders to customize the company bylaws, governance, and capital contributions — including contributions in kind, such as real estate or business shares. This makes it particularly useful for:

• Inheriting property in Italy and placing it under a formal, protective structure.
• Managing family-owned businesses passed down under Italian succession law.
• Facilitating gradual asset transfers through lifetime donations in Italy.

Requirements include:

• A notarial public deed of incorporation, which includes the company bylaws.
• A minimum share capital of €10,000 (although only 25% must be paid in at the time of incorporation unless there is a sole shareholder, in which case the full amount must be paid upfront).
• Registration in the Italian Business Register (Registro delle Imprese).
• At least one director and shareholder (can be foreign, including non-EU nationals).
• The option to contribute assets like property or business equity, which is particularly relevant when incorporating inherited property in Italy into the company.

This flexibility makes the ordinary SRL ideal for complex or high-value estates, or where multiple heirs — potentially from different countries — are involved.

Simplified SRL (SRLS)

Introduced in 2012, the SRLS offers a more accessible entry point for forming a company in Italy. It is designed for individuals (not legal entities) and imposes more limitations in exchange for a faster, more affordable setup process.

Key features include:

• Share capital from €1 to €9,999.99, fully paid in incorporation.
• Use of a standardized incorporation template (no customization).
• Only cash contributions are allowed — not in-kind assets such as inherited real estate.
• Notarial fees are waived, although registration and administrative costs still apply.

While not as flexible as an ordinary SRL, the SRLS may still be useful in basic estate structures — for example, when planning to sell inherited property in Italy and hold the proceeds within a company until reinvestment or distribution.

SRLs and Estate Planning: Practical Applications

Incorporating an SRL into your estate strategy offers several benefits under Italian inheritance law:

1. Simplifying Probate in Italy
   The Italian probate process can be lengthy and complicated — especially for non-residents. By transferring ownership of inherited real estate or shares into an SRL, families can avoid fragmented co-ownership among heirs. Shares in the SRL can then be more easily passed down, sold, or reorganized according to a will or cross-border succession plan.
2. Cross-Border Succession for Foreign Nationals
   For a US citizen inheriting property in Italy, forming an SRL provides a clear legal framework that aligns with both U.S. and Italian inheritance structures. SRLs also help navigate potential conflicts between Italian forced heirship rules and foreign wills — offering more control over asset distribution.
3. Managing Inherited Property
   Instead of holding inherited real estate directly (which can create joint liability or management issues among heirs), the property can be placed under an SRL. This structure:
   ● Facilitates shared ownership through company shares.
   ● Simplifies decisions related to renting or selling inherited property in Italy.
   ● Reduces disputes between heirs by formalizing governance rules.
4. Donations in Italy
   An SRL can also be used to structure donations during lifetime — a common estate planning tool in Italy. Instead of donating real estate directly to heirs (which could trigger taxes or public deed formalities), shares in an SRL holding the property can be donated instead, sometimes with tax and legal benefits.

Tax Considerations: Inheritance Tax and Estate Tax in Italy

While Italy’s inheritance tax and estate tax are generally low (compared to other European countries), non-residents and foreign heirs should pay close attention to tax exposure, especially for high-value estates.

• Inheritance tax in Italy ranges from 4% to 8%, depending on the relationship to the deceased and the value of assets.
• Using an SRL does not exempt assets from taxation, but it can provide strategic flexibility in distributing shares over time, thereby deferring or reducing tax exposure.
• For non-residents, placing Italian property into an SRL can also simplify tax reporting obligations in both Italy and the heir’s home country.

Consulting a tax advisor is essential when foreign heirs or international structures are involved, as Italian estate tax rules must be coordinated with any bilateral tax treaties (e.g., between Italy and the United States).

Final Thoughts

Forming an SRL in Italy is more than just setting up a company — it’s a flexible, protective tool for handling inherited property, executing succession planning, and reducing the legal and tax complexities of cross-border estates. Whether you are planning a donation in Italy, preparing for probate, or managing inherited assets as a US citizen, the SRL structure can help you achieve clarity and efficiency.

Need guidance on structuring an SRL for estate or inheritance purposes? Legal and tax professionals experienced in Italian succession law can help ensure your SRL meets all compliance and planning needs — while protecting your family’s future.
VGS Family Lawyers is a law firm that offers assistance to English-speaking clients with interests in Italy.
In case you need assistance, please write to: info@vgslawyers.com.