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.
Limited liability in detail: what it actually protects
Limited liability is one of the most misunderstood concepts among first-time entrepreneurs. Understanding precisely what it does — and does not — protect is essential for making informed decisions.
In an SRL, each shareholder’s liability for the company’s obligations is capped at the amount of their capital contribution. If the company accumulates debts with suppliers, banks or the tax authority, creditors can only pursue the company’s assets — not the shareholder’s home, personal bank account or savings. This separation of assets is why so many entrepreneurs choose the SRL structure even when they could legally operate as sole traders.
There are, however, circumstances where this protection falls away. A director who acts contrary to the law or the company’s articles, or who breaches their duty of proper management, may be held personally liable towards creditors. Similarly, Italian banks almost invariably require a personal guarantee (fideiussione) from the shareholder when lending to SMEs, which in practice reduces asset separation on the credit side. Understanding these limits helps entrepreneurs avoid over-relying on the corporate shield and instead manage the SRL with the required administrative and accounting discipline.
One frequently overlooked point concerns relations with strategic suppliers: an SRL with adequate net equity and regularly filed accounts inspires confidence and can obtain better commercial terms than a sole trader. The Companies Register makes balance sheets, share capital and shareholding structures publicly available — maintaining clean accounts is therefore also a competitive advantage.
Tax advantages of an SRL over a sole trader: a concrete comparison
The tax difference between an SRL and a sole trader goes beyond a simple comparison of IRES and IRPEF rates. The full picture must include social security contributions and the ability to plan personal income.
A sole trader taxed under the ordinary regime pays IRPEF on business income at progressive rates: 23% up to €28,000, 35% from €28,001 to €50,000, and 43% above €50,000. On top of this come INPS contributions, calculated on net income, ranging from 24% to 26% depending on the relevant fund. In practice, a sole trader with €80,000 of net income can face a combined tax and contribution burden of over 55–60% on income above €50,000.
An SRL, by contrast, pays IRES at a flat 24% on taxable business income, regardless of amount. The director’s INPS contributions are calculated on the salary actually paid — not on the entire company profit. If the director draws a modest salary and leaves profits within the company, personal social security costs fall significantly. Retained profits are subject to neither IRPEF nor INPS contributions until they are distributed.
This flexibility in income planning is one of the most important advantages of the SRL for entrepreneurs with high or variable earnings. An experienced tax consultant can help find the optimal balance between director’s fees, profits to distribute and profits to reinvest in the business — reducing the overall tax burden within the limits of current regulations.
IRAP also deserves attention: an SRL pays it on the entire production value, which includes employment costs and director’s fees — not just net profit. Planning this tax requires careful thought even at the stage of defining the company structure.
Post-incorporation steps: what to do after signing at the notary
Once the Companies Register assigns a registration number, the work is not over. The first months of an SRL’s life require a series of practical steps that are best planned in advance.
Opening a business bank account. Choosing the right bank for the SRL’s current account deserves careful analysis. Conditions vary considerably: fixed monthly fees, transaction charges, home banking service fees and POS costs. Some banks offer packages specifically designed for new SRLs with reduced costs in the early years. The business account is a daily working tool — it is worth comparing at least three institutions before deciding. The share capital must be deposited into the business account at or immediately after incorporation.
ATECO code and updates. The ATECO code declared at the time of incorporation can be supplemented or changed, but every variation requires notification to both the Chamber of Commerce and the Agenzia delle Entrate. It is important to start with a primary code that accurately reflects the main activity and to add secondary codes for ancillary activities straight away, avoiding the need for amendments at a later stage.
Director-shareholder INPS registration. If the director predominantly and habitually carries out management activities for the company, they must register with the INPS Gestione Commercianti or Gestione Artigiani, depending on the nature of the company’s activity. Registration must be completed within 30 days of starting operations and generates fixed minimum contributions — currently exceeding €4,600 per year — regardless of actual income earned. This cost is often underestimated by first-time SRL founders and must be factored into the financial plan before incorporation.
VAT registration and bookkeeping setup. A VAT number is assigned at the same time as incorporation, but the VAT register, journal and other mandatory accounting records must be set up correctly from day one. Full double-entry bookkeeping is compulsory for all SRLs, regardless of revenue. Engaging a tax consultant from the outset allows the accounting system to be structured properly and avoids irregularities that could emerge during a tax audit.
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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