When Chinese entrepreneurs and businesses contact ISY about establishing a company in Italy, their questions often go beyond the choice of company structure. Can a Chinese citizen become a shareholder or director? Is an Italian residence permit required? Can incorporation be completed remotely, and what checks will an Italian bank carry out?
This article draws on questions we receive from clients and prospective clients. It brings together the main legal considerations and practical steps, with reference to the guidance published by the Italian Ministry of Foreign Affairs and International Cooperation (MAECI) and the applicable legal framework.
In general, Chinese citizens and qualifying Chinese companies can establish or acquire an Italian company, including an S.r.l. with wholly foreign ownership. An Italian shareholder is not ordinarily required. The proposed investor, activity, governance and documents must still be assessed, and company ownership does not itself confer a right to live or work in Italy.
1. Chinese investors and the Italian reciprocity rule
Article 16 of the preliminary provisions to the Italian Civil Code makes reciprocity relevant to certain civil rights exercised by foreign persons, subject to special legislation and international agreements. It should not be approached as a blanket prohibition on non-EU investment. MAECI explains, among other exceptions, how bilateral investment treaties can displace the ordinary reciprocity assessment for matters they cover. [1]
China is an express example in MAECI’s country guidance. The China sheet states that a separate reciprocity check is not required for citizens of countries with which Italy has concluded a bilateral investment protection agreement, within the matters regulated by that agreement. It identifies the Italy–China agreement signed on 28 January 1985 and in force from 28 August 1987. [2]
The treaty’s definition of investment includes participation in companies. One useful detail concerns investors living abroad: Article 2(4) uses the label “resident” but defines the individual by reference to citizenship under the relevant country’s law. Article 2(5) separately defines a company by incorporation and its seat in the contracting state. Consequently, a Chinese national’s residence in another country and a company’s jurisdiction of incorporation must be examined as different facts. [3]
The practical conclusion is that Chinese nationality is generally compatible with investment in an Italian S.r.l. The notary must establish the legal basis for the specific deed. MAECI’s sheets are explanatory guidance, rather than a substitute for the governing law or that assessment.
An individual Chinese citizen, a mainland Chinese company, a Hong Kong company and an EU company controlled by Chinese shareholders are different legal situations. MAECI addresses Hong Kong and Macao separately. The file should identify the investor’s citizenship or incorporation jurisdiction, its seat and the actual ownership chain.
2. Shareholders, directors and the right to work
An Italian S.r.l. may have a sole shareholder or several shareholders, including foreign individuals and legal entities. Foreign ownership can extend to the entire capital. For an ordinary private S.r.l., there is no general rule requiring an Italian co-owner or a director resident in Italy. A Chinese citizen can generally be appointed as director, subject to eligibility, the articles of association and any rules applying to the particular business. [4]
Shareholding, directorship and the company’s legal representation are separate roles. The articles and appointment documents should establish who manages the business, who can sign contracts and bank instructions, and whether powers are exercised individually or jointly. Directors remain responsible for their duties even when an accountant, lawyer or local service provider handles particular tasks.
| Proposed role | What needs to be assessed |
|---|---|
| Owning shares | Capacity to invest, shareholder documentation and the source of investment funds. |
| Acting as director | Eligibility, appointment, representative powers, responsibilities and the actual duties performed. |
| Living or working in Italy | The appropriate immigration status and authorisation for the intended activity. |
Do not treat incorporation as an immigration permission. A founder who remains abroad presents a different situation from one who moves to Italy to manage the company or deliver services there. The latter requires a separate immigration assessment before work begins. Appointment as director also does not, by itself, establish that every activity undertaken in Italy is permitted.
3. What if the founders already have an EU residence permit?
A residence permit issued by Portugal or another EU country does not make its holder an EU citizen. It also does not automatically authorise that person to settle or carry on work in Italy. Short travel within Schengen and residence for business operations are different questions.
The exact permit matters. EU long-term resident status can provide a route to residence in a second participating Member State, but conditions and an application in that state still apply. An ordinary national residence permit should not be assumed to confer the same rights. The European Commission distinguishes these situations in its guidance for non-EU citizens already living in the EU. [7]
For the Italian incorporation file, provide the founders’ passports, actual residential addresses and copies of existing permits. For any planned relocation, describe the work they will perform and the time they expect to spend in Italy.
4. An S.r.l., an S.r.l.s. or a Chinese company’s branch?
The appropriate vehicle depends on who invests and how the Italian business will operate. Our general company formation guide explains the wider process; the comparison below highlights points relevant to Chinese investors.
Scroll the table to compare all columns →
| Structure | Key characteristics | Planning point |
|---|---|---|
| Ordinary S.r.l. | A separate Italian limited liability company. Shareholders may be individuals or companies; its articles can be tailored. | Often suitable for a Chinese parent’s subsidiary, joint ownership or more detailed governance arrangements. |
| Simplified S.r.l.s. | Available to individual shareholders, with statutory standard provisions and cash capital from €1 to below €10,000. | A Chinese corporate parent cannot use it as the shareholder vehicle; reduced formation costs do not remove ongoing compliance. |
| Italian branch | A registered Italian presence of the foreign parent, with stable representation. It is not a separate Italian legal entity. | The parent retains exposure to the branch’s obligations; foreign corporate documents and Italian tax arrangements are needed. |
An ordinary S.r.l. can also be formed with capital below €10,000, starting from €1. In that case, the contributions must be in cash and paid in full, and special reserve requirements apply. The statutory minimum is not a realistic measure of the funding needed to operate the business. [5] [6]
If the investor is an existing Chinese company, compare an Italian subsidiary with a branch before preparing documents. See our branch versus subsidiary guide and steps for opening an Italian branch. Where an existing EU company will invest instead, identify that legal entity and its Chinese beneficial owners separately; an intermediary company does not eliminate ownership checks.
5. The documents to prepare before incorporation
Agree the document list with the Italian notary before commissioning certifications or translations. Requirements depend on the shareholder, signatory and signing method. A useful starting file includes:
Valid passports, residential and contact details, relevant residence permits, Italian tax codes and information needed to assess legal capacity or any relevant matrimonial property regime.
Current registration evidence, constitutional documents, proof of the signatory’s authority and any corporate decision authorising the investment and appointment of a representative.
An ownership chart through to the natural persons who ultimately own or control the investor, supporting corporate records and an explanation of the investment funds.
Company name, registered office, activities, capital, ownership percentages, directors, representative powers and any sector-specific authorisations.
The Italian codice fiscale is an identification number; obtaining one does not itself grant residence rights or make the person Italian tax resident. Foreign individuals can request it through the Revenue Agency using the applicable procedure. [15]
A corporate investor should also check its home-country approvals and the procedures for sending investment funds abroad. These should be coordinated with the Italian document and payment requirements before a signing date is fixed.
6. Chinese documents: Apostille and Italian translation
Since 7 November 2023, the Apostille Convention has applied to mainland China. For Chinese public documents within its scope and intended for use in Italy, the Apostille replaces the previous consular legalisation route. The Italian Consulate General in Chongqing explains this change and directs applicants to the competent Chinese authorities. [9]
This concerns authentication. It does not remove the need for an acceptable Italian translation, prove the truth of every statement in a document, or guarantee that the document establishes all the powers needed for an Italian deed. Its form, content and currency still matter.
For a power of attorney or corporate document, send a draft or specimen to the Italian notary first. Confirm whether a public or notarised document is required, which authentication route applies, and how the Italian translation must be prepared. This can avoid paying for an Apostille or translation on a document that needs to be issued again.
7. Can the company be incorporated without travelling to Italy?
Remote formation can be possible, but the signing route must be agreed with the notary. There are two main approaches:
- Notarial incorporation by videoconference. Italian law permits eligible S.r.l. and S.r.l.s. incorporations through a notarial electronic procedure. The company must have its seat in Italy, with cash contributions transferred to the notary’s dedicated account. Identity, electronic signatures, capacity and legal requirements must be verified. This is a formal notarial process, not an ordinary video call. [8]
- Incorporation through a representative. A properly drafted and authenticated power of attorney can enable a representative to sign the Italian deed. The notary must approve the powers and the foreign document’s form and translation.
Language arrangements must also be addressed: the parties need to understand the deed, and an interpreter or other appropriate formalities may be required. The notary can require attendance where the electronic procedure’s safeguards cannot be satisfied. Bank onboarding has its own requirements and should be assessed separately even if the incorporation can be completed remotely.
8. The bank account: allow time for beneficial ownership checks
Account opening can take longer than the incorporation process. An Italian bank must identify the company, the authorised signatories and the beneficial owners, verify relevant information and assess the intended relationship under anti-money-laundering rules. With a foreign ownership chain, additional records or clarifications may be needed. Banca d’Italia’s provisions require checks proportionate to the risk and reconstruction of ownership and control. [10]
The bank will typically need a coherent account of the business: customers and suppliers, expected countries and payments, the Italian operation and the origin of funds. A signed beneficial ownership declaration may need supporting evidence from reliable sources.
Chinese nationality alone should not be presented as an automatic legal classification of the customer as high risk. The assessment considers the actual ownership, activities, geographic connections, funding and other relevant factors. Where required checks cannot be completed, the anti-money-laundering framework can prevent the relationship from being established. [11]
As a planning measure, approach the intended bank early and prepare an ownership chart supported by current documents. Ask about non-resident signatories and remote identification before relying on a launch date. See our guide to opening a bank account for an Italian company. No incorporation service can guarantee a bank’s acceptance or completion date.
9. Registered office, premises and permitted activities
The company needs a registered office in Italy. Professional domiciliation may be appropriate where the arrangement is valid and suitable for the business. The registered office, the place where services are performed and any premises subject to local requirements should be identified separately.
There is no universal rule requiring every newly incorporated S.r.l. to hire Italian employees or lease a staffed office. Its activity may nevertheless require suitable premises, licences, registrations or other permissions. The bank may also ask how the company will operate and why it is established in Italy.
For example, a business described as “immigration consultancy” should specify the services it will actually deliver. Administrative assistance, commercial support and legal representation are not interchangeable. Reserved professional activities require the relevant qualifications and a compliant service model; court representation is reserved under the Italian legal profession framework. [12] Our legal support services can help assess the proposed activities and contracts.
Investments involving strategic assets or activities can also engage Italy’s Golden Power screening rules. Notification and other requirements depend on the transaction and sector and should be checked where relevant. [13]
10. Costs and timing: build the budget around the actual project
A useful budget distinguishes share capital from formation expenses and recurring operating costs. Capital belongs to the company; it is not a professional fee. Notarial work, registration charges, assistance, foreign document preparation, authentication and translation can vary with the structure and signing route.
Recurring items may include the registered office, accounting, annual accounts, tax filings, statutory charges and banking. Payroll, regulated activity, substantial transaction volumes and cross-border reporting can add work. Our guide to company formation costs in Italy explains the main categories.
Confirm investors, activities, governance and the appropriate structure.
Obtain accepted documents, translations, tax codes and signing arrangements.
Execute the deed and coordinate company registration and activity filings.
Complete banking, tax processes, licences and any employer setup.
Some stages can run in parallel. Document corrections, identification, transfers and bank reviews can extend the overall timetable. An estimate should be prepared once the ownership and activity are clear; the incorporation date and the date the business can operate need not coincide.
11. Ongoing compliance and management from abroad
An Italian S.r.l. needs an accounting and compliance process from the outset. Depending on its activity, this includes bookkeeping, annual accounts and filing, corporate tax returns, VAT obligations and electronic invoicing. Having no employees or limited initial turnover does not remove every company obligation. ISY provides accounting services, Italian tax compliance and VAT management; our electronic invoicing guide explains the operational workflow.
If personnel are hired, plan contracts, employer registrations and payroll before the first working day. Directors’ remuneration and working shareholders’ activities can also raise tax and social security questions. These depend on the actual role, payments, work location and any applicable coordination rules; foreign shareholding alone should not be equated with a single automatic contribution charge. See our payroll services for employment-related support.
Management from abroad requires cross-border tax planning. Under Article 73 of the Italian Income Tax Code, an Italian legal seat for most of the tax period is one of the alternative criteria for corporate residence. Having directors abroad does not, by itself, remove Italian tax residence. Conversely, decisions or operations abroad can raise residence, permanent establishment or other obligations in that country. The Revenue Agency discusses the Italian criteria in Circular 20/E of 4 November 2024. [14]
Plan where decisions are made, how authority is exercised, and where contracts and services are performed. Group funding, intercompany services and transfers of profit may require further analysis, including withholding taxes and treaty relief. Our transfer pricing and intercompany agreements guide is relevant when an Italian subsidiary trades with its foreign parent.
12. Three illustrative situations
The following are hypothetical examples, not descriptions of individual client matters.
A Chinese founder remains abroad
The founder wishes to own an Italian trading company and be its director. The initial file should cover investment eligibility, governance, signing, funding and banking. If management takes place abroad, the tax position in both countries needs to be considered. Any later move to Italy adds an immigration assessment.
Chinese citizens resident in another EU country start a services business
The founders’ existing permits should be checked against any work they plan to perform in Italy. The service list must distinguish ordinary commercial assistance from regulated professional work. Their residence documents support identification but do not replace either the Italian activity assessment or immigration requirements.
A Chinese parent establishes an Italian subsidiary
An ordinary S.r.l. can accommodate corporate ownership. The file needs evidence of the parent’s existence, signing powers, investment approval and ultimate ownership. A branch comparison, a banking assessment and the proposed commercial and intercompany arrangements should be addressed before implementation.
Frequently asked questions
Can Chinese citizens own 100% of an Italian company?
Generally yes. An Italian S.r.l. can have wholly foreign ownership, and an Italian shareholder is not ordinarily required. The investor, proposed activity and incorporation documents must be assessed for the particular case.
Is an Italian residence permit required just to hold shares?
Share ownership does not, in itself, require the shareholder to live in Italy. It must be distinguished from entering Italy, taking up residence and performing work, which have separate immigration requirements.
Can a Chinese citizen be the director?
Generally yes, subject to eligibility, the articles of association and any sector-specific rules. An ordinary private S.r.l. has no general requirement for an Italian-resident director. Duties performed in Italy still require a separate immigration assessment.
Does a Portuguese residence permit allow me to work in Italy?
Not automatically. The permit’s category and the planned activity must be checked. EU long-term resident status has specific mobility rules, while a national residence permit should not be treated as an unrestricted right to work in another Member State.
Can the Italian company be incorporated remotely?
It may be possible through an eligible notarial videoconference procedure or an accepted power of attorney. The Italian notary must approve the route, identification, powers and document formalities. The bank may apply separate attendance or identification requirements.
Do Chinese documents still need consular legalisation?
For Chinese public documents covered by the Apostille Convention and intended for use in Italy, the Apostille has replaced consular legalisation since 7 November 2023. Translation and the receiving authority’s requirements still need to be satisfied.
How long does opening the bank account take?
There is no reliable universal deadline. Identification, beneficial ownership, funding and business checks can extend onboarding beyond incorporation. Prepare the supporting file early and obtain the intended bank’s requirements before fixing the operational launch date.
How ISY can help with your Italian project
ISY brings together legal, accounting and tax support for international businesses establishing and operating in Italy. Our Business in Italy services cover the assessment of the structure, coordination of incorporation and the ongoing compliance setup.
Start with the facts that determine the route
Tell us who will invest, their citizenship or incorporation jurisdiction, where the founders live, the proposed activities, who will manage the company and whether anyone will work in Italy. Include the expected funding, ownership structure and target launch date. These details allow us to identify the steps and prepare a project-specific scope and cost estimate.
Attorney at Law · Legal and corporate matters
Chartered Accountant and Tax Advisor · Accounting and tax matters
Related ISY guides
Official sources and legal references
Sources checked on . Some official materials are available in Italian or as downloadable documents. The references below identify the basis for the principal legal points; practical planning suggestions are ISY’s synthesis of those requirements.
- MAECI — the reciprocity condition and its exceptions.
- MAECI — China country sheet (DOCX); listed in the official country directory.
- Italy–China investment promotion and protection agreement, signed 28 January 1985 (PDF), especially Articles 1–3 and the investor definitions in Article 2.
- Italian Civil Code, preliminary provisions Article 16 and Articles 2462, 2463, 2463-bis, 2475 and 2475-bis.
- Consiglio Nazionale del Notariato — ordinary S.r.l., including capital and governance.
- Consiglio Nazionale del Notariato — simplified S.r.l.s..
- European Commission — non-EU citizens already in the EU, long-term residence and moving between countries.
- Consiglio Nazionale del Notariato — online S.r.l. incorporation; Legislative Decree 183/2021, Article 2.
- Italian Consulate General in Chongqing — translation, legalisation and the Apostille from 7 November 2023.
- Banca d’Italia — customer due diligence provisions (consolidated PDF), especially Parts One and Two; provisions and updates directory.
- Legislative Decree 231/2007, particularly Articles 18–20 and 42, identification, beneficial ownership and inability to complete due diligence.
- Law 247/2012, Article 2 — the Italian legal profession and reserved activities.
- MAECI — investment governance and Golden Power screening.
- Italian Revenue Agency — Circular 20/E of 4 November 2024 on tax residence, corporate residence section and Article 73 of the Income Tax Code.
- Italian Revenue Agency — tax identification code guidance.
Scope: This guide concerns company investment and establishment in Italy. The result depends on the investor, documents, activity and actual operations. Immigration, regulated services, banking and cross-border taxation require assessment for the proposed project. Later legal or administrative changes may affect the steps described.