Foreign Director of SRL (LTD) and SpA (JSC)
not resident in Italy

There are few cases in which for the incorporation of companies in Italy by foreign investors it is possible to appoint a foreign citizen not resident in Italy or in the European Union as director and get the company operational, in most cases it is not possible.

 

The questions to be answered are the following:

 

- when foreign investors set up a SRL or SRLS or SPA in Italy, who can be appointed as director?

- Can he also be a non-Italian citizen?

- Can he also be a non-EU citizen?

- In addition to the director's nationality, is his residency also relevant?

- Must the director of a company incorporated in Italy also be resident in Italy? Or in another EU country? Or can he even be a resident of a non-EU country?

 

Rules for the appointment of director of a company in Italy

 

The rules are as follows:

 

- the citizen of any EU country (even if not resident in an EU country) can be appointed director of a company incorporated in Italy; citizens of other EEA (Economic European Area) countries that are not members of the EU, such as: Iceland, Liechtenstein and Norway;

 

- a citizen of a non-EU country who is resident in an EU country can also assume the position of director of a company in Italy.

 

Furthermore, based on the indications of the Ministry of Foreign Affairs there is also the following criterion:

 

- citizens of foreign countries can assume the position of director of a company incorporated in Italy, even if they are not resident in Italy, provided that they are citizens of countries with which the "condition of reciprocity" applies.

 

The "condition of reciprocity" exists with those countries that have signed an Agreement with Italy on the Promotion and Protection of Investments (Bilateral Investment Treaty, BIT), the countries that have signed BIT agreements with Italy are the following:

Albania, Algeria, Angola, Saudi Arabia, Argentina, Armenia, Azerbaijan, Bangladesh, Barbados, Bahrain, Belarus, Bolivia, Bosnia and Herzegovina, Bulgaria, Cameroon, Chad, Chile, China, Congo, South Korea, Croatia, Cuba, Ecuador , Egypt, United Arab Emirates, Eritrea, Estonia, Ethiopia, Philippines, Gabon, Georgia, Jamaica, Jordan, Guatemala, Guinea, Hong Kong, India, Indonesia, Iran, Kazakhstan, Kenya, Kuwait, Latvia, Lebanon, Libya, Lithuania, Macedonia, Malawi, Malaysia, Mauritania, Morocco, Mexico, Moldova, Mongolia, Mozambique, Namibia, Nicaragua, Nigeria, Oman, Pakistan, Panama, Paraguay, Peru, Poland, Qatar, Dominican Republic, South Africa, Romania, Russia, Senegal, Syria, Slovakia, Slovenia, Sri Lanka, Tanzania, Tunisia, Turkey, Turkmenistan, Ukraine, Uganda, Hungary, Uruguay, Uzbekistan, Vietnam, Yemen, Zambia.

 

The same rule also applies to international agreements signed between the European Union and a third country regarding the promotion and protection of investments, an important agreement of this type is the one between Great Britain and the European Union which also has as its object mutual protection of investments https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:22021A0430(01)

 

The art. 131 of the aforementioned agreement between United Kingdom and the European Union entitled <<Senior management and boards of directors> states that <<A Party shall not require a covered enterprise to appoint individuals of any particular nationality as executives, managers or members of boards of directors. >>, therefore, from this provision it appears possible that a company incorporated in Great Britain, which establishes a company in Italy, can appoint as director of the company in Italy the same director of the company incorporated in Great Britain, regardless of his nationality.

 

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However, in practice, the citizens residents in extra EU countries - with which Italy signed BIT agreements – can be appointed as director of company in Italy, but for the company to become operative it is necessary to appoint a director resident in Italy or in another EU country.

Since the presence of the condition of reciprocity is a necessary requirement only for the verification carried out by the notary, therefore, it happens that:

- the company can be regularly incorporated by the notary;

- the company is existing;

- the notary, on request of the non-EU investor(s), shall indicate in the statute and in the articles of association as director a non-EU citizen, not resident in Italy;

but, after that, the Italian Business Register (which is managed by the chambers of commerce) will not authorize the newly incorporated company to become operational if the appointed director is a non-EU citizen, not resident in Italy or in another EU country.

If so, the new company in Italy will be existing, but only as dormant company and can't be operative, so it can't: cash money, issue invoices. open a bank account too.

 

As an alternative the extra EU investor can appoint a nominee director resident in Italy who can render operative and effective the newco in Italy.

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