Table of Contents
If you’re planning to start a company in Italy, Germany, and France, you must understand how the European Union (EU) influences business operations. You can either conduct operations independently in individual countries or create a European Company with regional branches in each of the three countries and other areas within the EU.
Establishing a European Company allows you to use “a single set of rules” for your branches or subsidiaries instead of location-specific regulations.
If you’re starting, opening a company in one country is best before developing a network of subsidiaries.
Our guide shares the best tips and requirements to start a company in Italy, Germany and France.
Here’s what you need to know:
The Basics: Understanding EU Business Policies
When setting up an EU business, entrepreneurs must consider the corporate rules and regulations they must follow. It’s also better to know the economic condition, market performance, and consumer trends before you start a company.
To do this, you need extensive knowledge of the corporate world, company models, and an effective business strategy that complies with the legal rules.
We created a checklist of questions that nudge you in the right direction.
Location Matters: Why Should You Start a Company in Italy, Germany or France?
Business owners need to familiarise themselves with bureaucratic and trade laws before setting up a company in a European country. Before making a decision, compare market trends, tax implications, and consumer behaviour.
In the case of Germany, Italy and France, you might want to start your venture for the following reasons:
- Why should you start a company in Italy?
Although the registration process can be slightly complex, there aren’t any limitations on foreign shareholders. This makes it easier for non-EU residents to run a business in Italy.
Read more about the benefits of establishing a branch or subsidiary in Italy.
- What are the advantages of opening a company in Germany?
The rapid economic growth and corporate advancements make it a popular choice for entrepreneurs. Entrepreneurs should thoroughly review bureaucratic guidelines to make informed corporate decisions for maximum success rate.
Read more about eight benefits of starting a business in Germany
- What are the benefits of starting a business in France?
The registration process is relatively more straightforward than in other countries. It’s also an economically stable state to begin your enterprise.
Read more about the advantages of starting a company in France
Most people might opt for France because of its streamlined registration process. However, business development in Germany and Italy might draw attention if they align with your organisational operations. It’s best to weigh the pros and cons of each region to choose the more profitable option.
Company Status: What Type of Company Do You Plan to Run?
After choosing a location, narrow down your business model by selecting your company status. Different options are available for entrepreneurs who wish to start a company in Italy, Germany and France.
Here’s a breakdown of their requirements:
The three main types of companies in Italy are as follows:
- Limited Liability Company (or Società a Responsabilità Limitata)
This company type requires a minimum share capital of €10,000 with yearly audits sent to local registrars.
- Joint Stock Company (or Società per Azioni)
These companies have multiple investors that share €120,000 and need to file annual audit reports.
If you plan to expand your business, you can open a branch in Italy under an overseas parent company.
The three main types of companies in Germany are as follows:
- Limited Liability Companies (GmbH or UG)
There are two types of companies in this category. Shareholders for GmBH must have a share capital of €25,000, out of which 50% should be paid up when you start the company. The minimum share capital for UG (or mini-Gmbh) is €1.
- Stock Corporation (AG)
The ideal status for public companies with one or more shareholders. The required shared capital is €50,000, and accounts are heavily regulated.
General partnership (oHG) or Limited partnership (KG), where the organisation must have two partner firms. Most foreign investors choose KG status.
Four types of companies in France are as follows:
- Business Corporation – Société Anonyme (SA)
The minimum share capital is around € 37000, and annual audits are mandatory.
- Limited Company
Shared capital can be €1 or more, but European banks require registered companies to have a minimum € 4000 share capital to create a business account.
- Simplified Stock Corporation (SAS)
The most common business model where shared capital can be €1 through banks may require shareholders to qualify for € 4000 share capital.
- Societe Civile Immobiliere
It is the French equivalent of a private limited company.
Setting SMART Goals: What Is Your Business Strategy?
Business plans are a vital part of the EU business setup process.
Most countries require entrepreneurs and directors to create a result-oriented business plan before starting a company. The business plan covers the following:
- Market analysis and strategy
- Marketing and sales plan
- Detailed analysis of competitors
- Description of management and organisational operations
- Key objectives and specific details about the company product and services
- Financial forecast and tentative needs
These sections help you create a clear-cut strategy to run a successful business in the chosen location. Business plans are also necessary for entrepreneurs looking for shareholders and investors. An effective program allows investors to identify your company’s potential and significant contributions to economic development or consumer needs.
Once you have a basic idea of your business operation and requirements, you can prepare the relevant paperwork,
Getting Started: How to Start a Company in Italy, Germany, and France
Some critical conditions remain the same whether you plan to conduct business in France, Italy or Germany. We list those requirements below:
Mandatory Documents to Register Your Business
Every business owner must register their company at the local registrar’s office, Chambers of Commerce, public notary office, tax office, and other relevant organisations. You may need a memorandum and articles of association to qualify for registration.
Other compulsory documents include:
- An official business name (and domain name for online platforms)
- An authorised business address
- Personally identifiable information about the company owner(s) through verifiable documents (such as passport, local address, and contact information)
- A signed contract for joint ventures
Once your registration application gets approved, you shall receive unique identification numbers. These include an authorised identification number, tax identification and VAT numbers. Local governments track financial transactions and tax records through these special codes. Therefore, owners must remember these numbers and use them when filing paperwork.
Please note: Some countries require non-EU residents to apply for a work visa/permit and long-term business licences before they become eligible to start a company in Europe.
Opening a Business Account
The government in Italy, Germany, and France require company owners to create separate corporate accounts to conduct business transactions. It allows you to keep your business funds separate from personal savings.
Consequently, having a business account optimises cash flow management to pay organisational expenses, handle payrolls and track revenue generation. You can use this information to implement cost-effective strategies, pay taxes, and ensure maximum return-of-investments for new ventures.
Do you need to be present to open a business account?
The rules vary from country to country and depend on the bank itself. Some banks will allow you to open a corporate account remotely through secure online channels or by using a power of attorney.
Moreover, some banks require a minimum deposit to qualify to open a business account. Ensure you are aware of the rules and regulations to minimise costly risks.
Protecting Your Intellectual Property
Intellectual property refers to non-tangible assets owned by an individual or a company. Intellectual property laws safeguard user rights and prevent competitors or third parties from taking credit or gaining profit from the unique idea.
These properties depend on your niche industry and the services/products you offer to target audiences.
Common intellectual property types include:
It’s a distinctive “symbol, phrase, or insignia” owned by a company as part of its brand name or persona. It typically takes four months for companies to complete the trademark process.
It’s the inventor’s right to develop, reproduce, sell and modify patented products. These are innovative products or parts of machinery designed by an individual or company. Intellectual property rights prevent other people from taking credit or earning money from your patent products.
Applying for patents can take almost five years. It’s an extensive process that requires legally compliant paperwork and evidence to verify that you’re the original creator.
You can receive copyrights for any original software, web content, written work (such as lyrics, scripts, and published work), file and sound recordings. The original content creator can modify and repurpose the work or use it commercially.
Anyone who intends to use the software or media files can do so after signing a licence agreement with the copyright owner.
Intellectual property rights can vary. Company owners should review policies beforehand to take the necessary steps.
Are You Ready to Start a Company in Europe?
In the end, anyone planning to start a company in Italy, Germany and France must conduct an in-depth market analysis to know how organisations work in these European countries. Choose a location that aligns with your business plan and register for the business name, company status and other necessary certificates to start a legally compliant business.
Licensed firms must have a corporate account, a valid work permit for non-EU owners/employees and relevant intellectual property rights.
Once you cover the basics, running a successful business won’t be challenging. Ask for professional assistance if you’re doubtful about the initial registration process.
Read more about:
- How to Register Multiple Subsidiaries in Europe
- Benefits of Expanding a Recruitment Agency in Multiple Countries
- How to register a company in multiple countries
- 8 Advantages of Setting Up Multiple International Entities
- Setting up several businesses at once throughout Europe
How Can OpenAEuropeanCompany Help?
OpenAEuropeanCompany assists foreign entrepreneurs and enterprises interested in starting a company within the EU or the UK. Our services include business consultancy, banking support, reputation management, and other corporate-centric assistance from experienced agents. Our turnkey solutions help you launch a new company successfully with minimum setbacks. Contact us today for further information.