[ESTABLISHING A BUSINESS ENTITY IN ITALY] 283
Therefore, all the requirements generally provided for both Italian and foreign investments are applicable to offshore parties, such as compliance with the company’s purpose with Italian law provisions, compliance with regulations provided for specific activities such as, for example, banking, insurance, gold trading, military and defense activities and the preliminary issuance of any necessary clearance and administrative authorization. Some limitations may derive from the application of the state-to-state reciprocity principle. 6.2 Any capital obligations The minimum capital requirement has been described above under the incorporation proceedings paragraph. Specific rules are provided by law with regard to the compulsory actions to be taken in case the financial statement reports losses that absorb the company’s equity over a fixed debt/equity ratio. If, as a result of losses, the company’s capital has diminished by more than one-third, the shareholders’ meeting must be convened to take the right actions. If the company is not recapitalized, or the loss is not reduced to less than one-third in the following fiscal year, the company’s capital must be reduced in proportion to the losses that have been ascertained. If, as a result of losses accruing, the capital is reduced below the minimum required, the shareholders’ meeting must be immediately convened in order to resolve either the reduction of the capital for losses, and the immediate increase of the capital to an amount not lower than the minimum required, or the conversion of the company into a structure that is consistent with the
existing capital, or the winding up of the company. 6.3 Any special business or investment visa issues Art. 26 of Law July 25, 1998, nr. 286 provides that an individual who either establishes a commercial, industrial, professional or artisan business in Italy, or is a shareholder of a commercial company or partnership or is appointed as member of the administrative body of a commercial company, is entitled to a VISA for independent work. The visa is issued by the consular authorities competent for the residence of the applicant, provided that; (i) the business activity or the company is duly registered with the competent Corporate Register, is active and in good standing; (ii) the individual has a yearly income higher than the income that qualifies for exemption to the social security contribution (as of today Euro 8.400,00); (iii) the individual has a suitable and long term residential accommodation in Italy; (iv) a police clearance is granted. 6.4 Any restrictions on remitting funds out of the jurisdictions (withholdings, etc.) Fiscal earnings treatment on outgoing capital: Art 27 of the Presidential Decree nr. 600 of 1973 provides that, except for any different provision contained inapplicable international conventions to avoid double taxation, profits distributed by companies having their offices in Italy, to nonresident shareholders are subject to a withholding tax equal to 20%. Italy has signed double taxation conventions with eighty-four countries, pursuant to which the payment of dividends to a receiver resident in one of those countries (and subject to the receiver of the dividends is the actual beneficial owner) is subject to the
ILN Corporate Group – Establishing a Business Entity Series
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