Frequently asked questions – Incorporation of a Limited [LTD]
This section contains the answers to the most frequently asked questions concerning the incorporation of a Limited.
Q. Where does a LTD pay its corporation tax?
A. Generally speaking, a LTD pays its taxes in the place in which it has its own fiscal residence. The fiscal residence is determined on the basis of the place of effective management, which shall be identified with the place where the directors are fiscally resident or the place where the main corporate object is located. In addition, a LTD may be required to pay income tax in the place in which it has a ‘permanent establishment’, i.e. a fixed place of business. In any event, international double taxation is excluded. Therefore, if a certain income has already been taxed in one Country, the same income shall not be subjected to taxation in another [Country].
Q. Where does a LTD pay the VAT?
A. A LTD that is fiscally resident in Italy (see previous answer) shall pay VAT in a similar way to any other Italian S.r.l.. Should the LTD, however, be fiscally resident, depending on the case, in Great Britain, Ireland or Cyprus, it might request a VAT number from the English, Irish or Cypriot tax authorities, respectively. Italian Limited may assist its clients in requesting a VAT number from the English, Irish or Cypriot tax authorities.
Q. May the Italian tax authorities object to the use of a LTD?
A. The incorporation of a foreign company and the use of a LTD are perfectly lawful per se and the Italian tax authorities cannot object to them, insofar as – obviously – the company fully operates in compliance with the law. Italian Limited may assist its clients in relation to the procedures to follow to ensure compliance with Italian and international tax laws applicable to the case at issue
Q. Is it possible to incorporate a LTD to only operate in Italy?
A. Yes, the fact that a company is incorporated under English or Irish law and has its registered office in England or Ireland does not prevent it from operating even just in Italy, like any other Italian company. The LTD shall, generally speaking, be subjected to the more advantageous English rules, as far as its operations are concerned.
Q. Is it legal to incorporate an anonymous LTD?
A. Yes. The LTD shall remain subject, depending on the case, to English, Irish or Cypriot laws, which expressly allow and protect the anonymity of companies, their members or directors. As such, the anonymity of a LTD shall be recognised by the Italian State.
Q. How does the anonymity service for members (nominee shareholder) work?
A. The identity of the members may also be hidden using the anonymity service (nominee shareholder). In this case, the client shall sign a trust agreement with a partner company of ItalianLimited, which provides fiduciary services and which shall hold the shares of the company on behalf of the client (beneficial owner). The client shall be able revoke the fiduciary holding at any time.
Q. How does the anonymity service for directors (nominee director) work?
A. The identity of directors may be protected using the nominee director service. In this case, the client shall sign a trust agreement with a local professional selected by ItalianLimited, who shall assume the directorship on behalf of the client (beneficial owner). The client shall be able revoke the nominee director at any time.
Q. Shall I be able to access loan services with a company that has a share capital of €100?
A. Yes. Banks do not consider the minimum share capital required by Italian law as a parameter to determine the credit standing of the company and, therefore, its eligibility for a loan. Nor does the share capital and its related rules represent an effective guarantee for those who come into contact with the company (creditors, employees, etc.). Indeed, several countries (e.g., United Kingdom, United States, France, Japan, Ireland), do not envisage any minimum share capital for companies. If required, Italian Limited may assist clients in establishing relations with banks open to foreign relations.
Q. Is it possible to open a bank account for a LTD both abroad and in Italy?
A. Yes. A LTD can open a bank account both in Italy and abroad. ItalianLimited is able to assist its clients in opening a bank account.
Q. May I express the share capital in Euros instead of British pounds sterling?
A. Yes, the share capital may be expressed in any currency you wish.
Q. How do I sell the shares of a LTD?
A. For the sale of shares of a LTD, English, Irish and Cypriot laws do not require the intervention of a notary public. Italian Limited is able to manage the operation at a significantly lower rate than that required for the sale of shares in an Italian S.r.l.
Q. Do I have to speak English to incorporate a LTD and undertake operations through it?
A. No. Italian Limited provides its clients with the Italian translation of the articles of association, the articles of incorporation and all other documents relating to the company.
Q. Do need to travel to the United Kingdom, Ireland or Cyprus to operate via a LTD?
A. Italian Limited is able to manage the incorporation of the company on behalf of its clients and to assist them with the formalities relating to its life
Q. Is it legal to incorporate a LTD?
A. Absolutely yes. In England, Ireland and Cyprus
Q. Is it possible to incorporate an anonymous LTD to undertake unlawful activities?
A. Absolutely not. The United Kingdom, Ireland and Cyprus do not safeguard the anonymity in the case that this is a tool to hide the conduct of illegal activities. In addition, Italian Limited is subject to the obligations laid down in the EU legislation against money laundering, which applies in all EU Member States.
Q. Can I use the LTD to hold real estate assets or cars and boats?
A. Yes. The LTD possesses the same rights and may perform the same tasks as an Italian S.r.l.