Open an SRL in Milan: Costs, Benefits & Process
Opening an SRL is one of the most important decisions in an entrepreneur’s life. It offers personal asset protection, tax advantages over a sole trader structure and a credible profile in the eyes of clients, banks and partners. This guide explains everything you need to know to do it correctly.
What is an SRL and why choose it
A Società a Responsabilità Limitata (SRL) is the most common corporate form for SMEs. Its key advantage: shareholders are liable for the company’s obligations only up to the amount of their contribution. In practice, if the company has debts, your personal assets — home, bank account, savings — are protected, unless the directors have acted improperly.
SRL vs. sole trader: the tax differences
| Aspect | Sole trader | SRL |
|---|---|---|
| Profit taxation | IRPEF 23%–43% (progressive) | IRES 24% (flat rate) |
| Social security (INPS) | 24%–26% on net income | Only on salaries paid |
| Personal liability | Unlimited | Limited to share capital |
| External credibility | Medium | High (e.g. with banks) |
| Management costs | Low | Higher (accounts, notary) |
| Access to credit | Limited | Broader |
An SRL becomes advantageous when annual income exceeds €50,000–60,000, or when you want to separate personal from business assets, or when there are multiple shareholders.
Standard SRL vs. simplified SRL (SRLS)
- Standard SRL: minimum capital €1, notarial deed, more flexible structure
- SRLS: capital from €1 to €9,999, standard articles, shareholders must be individuals, lower notary costs
For most Milan-based SMEs, a standard SRL with €10,000 capital is the most balanced choice.
Steps to open an SRL in Milan
1. Define the company structure
Before going to the notary, decide:
- Shareholders: who participates and with what percentage stake
- Share capital: minimum €1, recommended at least €10,000 for banking credibility
- Company purpose (oggetto sociale): activities the company will carry out — must be broad enough
- Director: one or more shareholders, or an external director
- Registered office: registered address (can initially be the accountant’s studio)
2. Choose the ATECO code
The ATECO code identifies the economic activity. Choosing it correctly matters because it determines:
- Applicable INPS contributions
- IRAP rate
- Any required licences or authorisations
Your accountant helps you choose the most appropriate code — you can often combine a primary and one or more secondary codes.
3. The notarial deed of incorporation
The deed of incorporation (atto costitutivo) is the document that brings the SRL into existence. It is signed before a notary and contains:
- Company name
- Registered office
- Company purpose
- Share capital and shareholders’ stakes
- Governance rules (appointment of directors, voting rights, etc.)
Typical notary fees in Milan: from €1,500 to €3,000 for a standard SRL, depending on complexity.
4. Registration with the Companies Register
After the notarial deed, the SRL is registered with the Milan Chamber of Commerce Companies Register. The notary typically handles this. Registration takes 5–10 working days.
Registration cost: approximately €200–300 in Chamber fees plus stamp duty.
5. Opening a VAT number (Partita IVA)
At the same time or immediately after incorporation, the company’s VAT number is opened with the Agenzia delle Entrate. The accountant usually handles this within 24 hours of signing.
6. Opening a business bank account
The SRL must have a dedicated bank account. The share capital must be deposited into the company account before or immediately after incorporation.
Practical tip: compare bank offers for business accounts — conditions vary significantly. Your accountant can guide you.
7. Director’s INPS registration
If the director is also a working shareholder, they must register with the INPS Gestione Commercianti or Artigiani (or Gestione Separata, depending on their role). This creates a fixed annual contribution cost to plan for in your budget.
Annual management costs of an SRL in Milan
Opening the SRL has a one-off cost. But it is the ongoing management that matters in the long run:
| Item | Indicative annual cost |
|---|---|
| Accountant (bookkeeping + returns) | From €2,500 to €6,000 |
| Director’s INPS contributions (fixed minimum) | From approx. €4,600/year |
| Annual Chamber of Commerce fee | Approx. €120 |
| Statutory auditor (if required) | From €1,500 |
| Invoicing/management software | €200–600 |
Estimated minimum total costs: approximately €7,500–9,000/year. This explains why an SRL only makes sense above a certain revenue threshold.
SRL taxation: how it works
An SRL pays two taxes on profits:
IRES (Corporate Income Tax): 24% on taxable income.
IRAP (Regional Tax on Productive Activities): standard rate of 3.9% on the production value (calculated on a different base from net income).
Practical example: an SRL with €100,000 of taxable income pays approximately €24,000 in IRES + €3,900 in IRAP = €27,900 total — before considering profit distribution.
Profit distribution (dividends)
When the SRL distributes profits to shareholders, they pay a 26% withholding tax on the amount distributed. This creates partial double taxation that your accountant must plan for.
Alternative: pay director’s fees (deductible from the SRL, subject to IRPEF and INPS for the recipient). The optimal combination of salary and dividends depends on the specific situation.
Common mistakes when opening an SRL
- Too little share capital: starting with €1 can disadvantage you with banks and suppliers
- Excessively narrow company purpose: changing it later requires a new notarial deed
- Not planning for fixed costs: director’s INPS contributions and accountant fees are mandatory even with zero turnover
- Confusing company assets with personal ones: using the business account for personal expenses is a serious accounting and tax error
- Opening without prior analysis: always check with your accountant whether an SRL is genuinely the best option compared to a sole trader, SAS or SNC structure
Studio CITI snc: SRL incorporation in Milan
We have assisted entrepreneurs in setting up and managing SRLs in Milan for over 40 years. Our support covers the preliminary analysis of the most tax-efficient corporate structure, full management of relations with the notary, Chamber of Commerce and Revenue Agency, and tax planning from day one.
Tel. 02.450 774 39 — Contact us
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