Introduction – Denis Philippe – Interleges President
Welcome to this webinar. I am delighted to see participants from every continent except Oceania represented here. The presentations show many similarities in how countries approach company formation, but also significant differences.
In certain countries it is possible to create a company online, which warrants further exploration. For investors from Asia, foreign direct investment rules may differ across jurisdictions. Bank accounts remain a consistent practical challenge: the bank account is frequently the biggest obstacle when establishing a company.
Stefano De Bosio is unable to join us in person today due to a court hearing, so Annalisa will present his slides.
Stefano De Bosio is a leading Italian lawyer who always brings something original to these discussions.
Formation of a company by foreign shareholders in Italy
Stefano De Bosio – de Bosio and Vecchione
Good afternoon, colleagues. I apologise for not being present in person: the court of first instance of Florence scheduled an urgent hearing at the same time as this webinar.
A foreign shareholder wishing to form an Italian subsidiary must avail themselves of three professionals.
The Three Required Professionals
An advocate, to assist through the process and draft any special clauses in the bylaws the client may require.
A notary public, who drives the process: company formation must be executed before a notary, who certifies the validity of the bylaws and their compliance with civil and tax law.
The business consultant and tax consultant, as tax compliance obligations apply from day one, beginning with the tax registration of the founding shareholder.
You may already be familiar with the notary public system. In Italy, notaries are particularly distinctive: they are in effect representatives of the government, yet operate as fully independent professionals. Their qualifying examination is considerably more rigorous than that for advocates, with a thorough grounding in civil law required. Their role is to certify the deeds executed before them.
However, notaries do not advise clients, though they sometimes wish they could. The lawyer’s role is therefore essential: an advocate’s perspective differs fundamentally from a notary’s, and it can be dangerous for clients to rely on the notary alone without recognising that the notary’s duty is not to pursue the client’s interests. One practical issue is how to deposit the initial minimum capital. An Italian founder has existing banking relationships and can open an escrow account straightforwardly. A foreign shareholder may find it considerably harder to open a bank account in Italy given current due diligence requirements.
My advice is always to use the notary public as escrow agent. The recommended vehicle is the S.r.l. (limited by shares), even where the plan is to grow the company into a larger business: start simply. It is also advisable not to bring in an Italian partner at formation, as this complicates the bylaws. Start with one foreign founding member and build from there. The notary can open an escrow account, receive the minimum equity transfer, and from those funds pay their own fees, the formation taxes and the lawyer’s fees. The lawyer is the stage director of the whole process.
In particular, the lawyer should draft the non-standard clauses: drag-along, tag-along and pre-emption rights, for example. The standard provisions are the notary’s domain. There is also a further requirement that can be time-consuming: the new company must obtain a certified email address. Together with the tax registration, this is a prerequisite for any subsequent action.
The founding shareholder will need to complete the certified email and tax registration formalities. The business consultant handles these. The notary will draft the escrow agreement, implement anti-money laundering compliance and verify the foreign founder’s right to establish an Italian company under the reciprocity rule. Most jurisdictions apply this rule: a foreign person can only exercise civil capacity in Italy if an Italian would be permitted to do the same in that person’s home jurisdiction. This can be complex to verify as the conditions change, but the notary has a direct line to the Ministry of Foreign Affairs.
To avoid travel, a power of attorney is needed authorising the lawyer to appear before the notary and sign the deed of formation and the bylaws. The power of attorney must be legalised under the Hague Convention of 1968. This process is smooth in some jurisdictions but less so in others: the US, for instance, does not have a particularly straightforward system for issuing the Hague apostille. A certified email address must also be in place before the company can be registered. Tax and company law compliance is handled by the business consultant from the outset. No operations should be undertaken before all registration steps are complete.
Until registration is complete, the directors (typically foreign employees of the founding member) bear full personal liability and are not protected by the company’s limited liability. No operations should take place before that point. Once registration is finalised, the company will need a bank account.
Opening a bank account can sometimes be more difficult than all the preceding steps. Italian banks normally require the company representative to appear in person, which may mean transferring a minority stake to a local contact who is then appointed as director to complete the process. A payroll consultant will also be needed: payroll in Italy is complex and the social charges are significant. Errors are costly.
The cost of the full process from start to operation is approximately €20,000.
Denis Philippe
Questions for Stefano can be held to the end of the session, when he will rejoin us. It is worth noting that all Italian companies are required to have a certified email address, which is not the case in all other jurisdictions.
We now turn to three Commonwealth countries. First up is Elaine McGrath, head of corporate at Reddy Charlton in Ireland.
Formation of a company by foreign shareholders in Ireland
Elaine McGrath – Reddy Charlton
I will focus on the private company limited by shares. Other company types exist and the requirements vary, but this is the most relevant form.
Minimum Requirements
The minimum requirements are: a unique company name approved by the Companies Registration Office; a registered office and place of business, both in Ireland (service providers can fulfil this); at least one share, typically €1 ordinary shares, though different classes and currencies are possible.
Directors and Share Capital
There is no minimum share capital, but there must be at least one share. A private company limited by shares must have at least one director who is a natural person. If there is no EEA-resident director, an insurance bond for €25,000 (costing approximately €2,500 every two years) must be put in place, though this can be waived once the company demonstrates genuine trading activity in Ireland. Non-Irish directors who lack an Irish PPS number must obtain an identified person number, requiring a notarised identity verification form.
The company must also have a company secretary, who may be a director (unless the company has only one director, in which case the secretary must be a separate person).
The notary verifies the director’s identity and the form is then submitted in Ireland to obtain the identified person number.
The constitution is the company’s governing document and is publicly available at the CRO. It must include the company name, company type, a statement that liability is limited, and a statement of share capital. Different share classes and their associated rights or restrictions should also be set out. The constitution can be customised to cover governance matters, share transfer rules and voting formalities.
So it must include the following: the company name, the company type, confirmation, in this case because it’s a private company limited by shares, that the members’ liability is limited, and a statement of the share capital. So that would state that the company has, ordinary shares of one euro and preference shares of one euro or whatever the share capital may be. If there are different classes of shares, the rights or restrictions attaching to those shares should also be set out. So, where you have different classes of shares, there may be a preference, there may be a, redemption right, or, whatever difference there may be from the standard ordinary shares, that should be set out in the constitution.
A Form A1 is submitted to the CRO setting out details of the directors, shareholders and initial share subscription. The fee is €50 and processing typically takes around five working days. Once incorporated, the CRO issues a certificate of incorporation and company number. The company must then register for taxes with the Revenue Commissioners and open a bank account. Irish banks increasingly require directors to appear in person.
There is also a central register of beneficial ownership. Access is limited, but anyone holding more than 25% beneficial ownership must be registered. Where no individual holds 25% or more, the senior management (typically the board) is registered in that capacity.
Companies must file an annual return within six months of incorporation and every 12 months thereafter, accompanied by accounts. The level of detail required in publicly filed accounts depends on company size.
Denis Philippe
Thank you, Elaine. Very clear and well-structured. I had assumed Ireland would be a little less formal, but there are some notable requirements, including the requirement that the place of business be in Ireland.
I now give the floor to Hector Freyne from RWK Goodman.
Formation of a company by foreign shareholders in the United Kingdom
Hector Freyne – RWK Goodman
Setting up a company in the UK is comparatively straightforward, quick and inexpensive. There are no restrictions on establishing a company with foreign shareholders and no residency or citizenship requirements. Foreign individuals or entities can own 100% of a UK company.
Key Considerations Before Incorporation
The company name must be available and not offensive. The company must have a registered office (a genuine physical UK address) and a registered email address (a monitored inbox). Law firms, accountancy firms and formation agents can provide a registered office. At least one director is required; directors can be non-UK residents, though changes to corporate director rules are coming into force (see below). Shareholders can be individuals or corporate entities with no residency or nationality restrictions. The company’s principal activity must also be specified for Companies House.
The articles of association are the company’s bylaws. A company may adopt the model articles prescribed under the Companies Act or draft bespoke articles. On incorporation, Companies House requires details of directors, shareholders and persons with significant control (PSCs): anyone holding 25% or more of shares or voting rights, or otherwise exercising control. Required details include name, service address, residential address (not public), nationality, occupation, date of birth and country of residence.
Each director must formally consent to act. The company must confirm it is being formed for a lawful purpose and state when it will start trading.
The online application via Companies House costs £50 (rising to £100 from February). Once registered, the company must register for corporation tax, file annual confirmation statements, keep Companies House updated of any changes, and submit annual accounts.
New Corporate Transparency Rules
The Economic Crime and Corporate Transparency Act 2024 has introduced compulsory ID verification for all directors of new and existing companies and all PSCs. This can be done online using a biometric passport, at a post office, or through an authorised corporate service provider such as an accountant or solicitor. From 18 November, foreign corporate directors are no longer permitted: only UK-incorporated companies may act as corporate directors, so any foreign corporate director must be replaced by an individual.
Bank accounts remain a challenge, though this does not affect the incorporation process itself. Challenger banks such as Wise or Revolut have proven more flexible. We can also assist with references.
Denis Philippe
Thank you, Hector. The system is notably liberal, even post-Brexit. The restriction on foreign corporate directors is interesting and perhaps reflects a more traditional instinct in English company law.
The online application is a real advantage. We now move to another continent: I am pleased to give the floor to Dr Riju Raj S Jamwal from JRD & Partners in India.
Formation of a company by foreign shareholders in India
Dr Riju Raj S Jamwal – JRD & Partners
Good evening. India’s company law derives largely from UK legislation, but has evolved considerably since market liberalisation. The key development has been the amendment of the Companies Act in 2013, which also differentiated between companies and Limited Liability Partnerships.
Both a company (with limited shareholding) and an LLP can now be incorporated. Both offer broadly equivalent liability protection. Both allow 100% foreign direct investment through the automatic route in most sectors, meaning no prior permission is needed.
The Incorporation Process
The process begins with name reservation, followed by obtaining digital signatures for each shareholder, director and partner. Document verification follows, including verification of foreign individuals’ documents both in their home country and in India.
The two most critical steps are name registration (which takes time) and digital signature verification. Once these are in place, everything else can be done online via the MCA portal.
One mandatory requirement is a resident Indian director: at least one director must have been resident in India for a minimum of 182 days in the preceding year and hold Indian citizenship.
Once you have these two, then everything is on online. You can s- simply go to the, we have the, MCA portal where you can just apply directly in there and it has become much easier, not otherwise. But the only condition is that you have to have an independent resident director from India. So one of your partners in LLP has to be an Indian or from the company there has to be a director who has to be at least, around 182 days living in India, who has, and comes from an Indian citizen, so he has to be a director of that company.
Most sectors are open to foreign investment with 100% FDI permitted. Restricted sectors include atomic energy, agriculture, certain chit funds and tobacco. The three primary legal provisions governing formation are the Companies Act 2013, the Limited Liability Partnership Act 2008 and the Foreign Exchange Management Act (FEMA), which governs capital inflows and is overseen by the Reserve Bank of India.
The key difference between a company and an LLP is that a company requires a memorandum and articles of association, whereas an LLP requires a partnership agreement.
How much money you’re bringing in, how much capital you’re coming, coming into the country.
Once the company is incorporated, everything is activated simultaneously: PAN, TAN, GST number and permission to open a bank account at any scheduled bank are all issued together. Capital inflows are then reported to the RBI.
The process has become significantly more straightforward in recent years. The government’s Make in India initiative is actively encouraging foreign companies to manufacture in India for export, with 25 identified sectors as priorities.
Despite recent tariff challenges, the outlook remains broadly positive. Formation typically takes two to three weeks once all documents are in order, and the process is not expensive.
The company is fully operational from the date the initial capital arrives in the bank account.
Foreign exchange management is also very flexible and available online. Subsidiary structures follow the same process.
Compliance obligations are the same as for any Indian company, and tax administration is fully centralised and online.
Denis Philippe
Thank you, Riju. A rapid and well-structured process. I give the floor to Marine Degodenne, associate at Philippe & Partners in Luxembourg.
Formation of a company by foreign shareholders in Luxembourg
Marine Degodenne – Phipppe & Partners
Thank you. I will briefly outline the key steps for incorporating a company in Luxembourg.
The most common forms are the SA (public limited company) and the Sàrl (private limited company). Each has a minimum share capital requirement.
The company name must be chosen and its availability verified. It can be reserved during the incorporation process.
Name selection takes one to three days. The articles of association must then be drafted, covering the corporate purpose, share capital allocation and internal operating rules (approximately one week). A bank account must be opened to deposit the share capital, either in Luxembourg or another EU country. The bank issues a certificate of capital deposit, which the notary requires as proof.
The company must also open a bank account to deposit the share capital. The bank will issue a certificate of capital deposit, which must be presented to the notary as a proof. So this step can be completed either in Luxembourg or in another European country.
The articles of association are signed before a notary in Luxembourg. The company is then registered in the Luxembourg Trade and Companies Register, typically within 10 days. Incorporation must be published in the official gazette (Mémorial C), covering the registered office, share capital and management. The notary handles this, with publication taking approximately three days.
The company must have a Luxembourg address. If it plans to hire employees, it must register with the social security and pension authorities. If annual turnover is expected to exceed €35,000, VAT registration is required. Certain activities also require an establishment authorisation; administrative processing for this can take up to three months.
Thank you very much to everybody.
Denis Philippe
Thank you, Marine. Very clear and concise. I should add that our firm also provides domiciliation services in Luxembourg, including registered address and, where needed, directors.
Staying within our firm but moving to Belgium, I give the floor to Violette Hostens.
Formation of a company by foreign shareholders in Belgium
Violette Hostens – Philippe & Partners
Good afternoon, everyone.
Belgium combines a stable legal framework, a strong business environment and proximity to the EU institutions, making it an attractive entry point to the European market. Incorporation is straightforward.
A company is created by a legal act through which one or more persons make a contribution to pursue specific activities with the aim of generating a financial advantage. Incorporation can be unilateral: a single founder can form a company.
Belgium’s new Code of Companies and Associations, introduced in 2019, reduced the number of permitted company types to four: the public limited liability company (SA), the private limited liability company (SRL), the cooperative company and the partnership.
Key innovations under the 2019 reform include: no minimum capital for the SRL (provided sufficient equity for activities); multiple voting rights; loyalty shares; and the option of a single director. The SA requires a minimum capital of €61,500 and must be incorporated by notarial deed.
The SRL has no fixed capital requirement but must demonstrate financial sufficiency in its incorporation plan. In both cases, liability is limited to the amount invested.
The incorporation process involves: choosing a company name; drafting the articles of association and financial plan; opening a Belgian bank account; registering the company and obtaining a company number through the Crossroads Bank for Enterprises; and signing the notarial deed.
From a tax perspective, Belgium offers a stable fiscal environment with a corporate tax rate of 25%, with a reduced rate of 20% for qualifying smaller companies. Belgium is multilingual (French, Dutch or German depending on region), and local representation is usually required for compliance. Belgium is an excellent entry point to the European market.
Denis Philippe
Thank you, Violette. A great deal covered very concisely.
We remain in Europe but move south to Spain.
Formation of a company by foreign shareholders in Spain
Alphonso ANDRES – Ja Cremades y Asociados
Thank you, Denis. Hello, everyone.
The steps for incorporating a company with foreign shareholders in Spain must be followed in sequence.
Step 1: Tax Identification Number
The first and most important step is obtaining a tax identification number. The NIE is for individuals and the NIF is for corporate entities. The applicant must provide legalised and translated proof of incorporation (for a company) or a passport (for an individual) to demonstrate existence to the Spanish tax authorities.
Step 2: Company Name Certificate
The company name must be registered and verified as unique. Up to five name options can be submitted. The name certificate is valid for six months; if the notarial deed has not been executed within that period, the certificate must be renewed.
Step 3: Escrow Bank Account
Once the name is confirmed, a bank account is opened in Spain to deposit the share capital (the escrow account). There is no restriction on citizenship or residence: a foreign shareholder can be the sole shareholder of a Spanish subsidiary.
You can be a sole shareholder, a foreign shareholder, a, of a subsidiary of a company in Spain.
Step 4: Notarial Deed of Incorporation
The incorporation deed must be executed before a notary. Unlike some jurisdictions, a private document is not sufficient in Spain. The deed includes the bylaws (articles of association), covering company type, minimum share capital, registered office, and any agreed restrictions such as tag-along, drag-along and pre-emption rights. The minimum share capital is €1 for a private company (SL) and €60,000 for a public company (SA).
So in the bylaws, in the article of association, you choose your registered office, your business office, everything you want, limitations to, to, to redemption, tag along, drag along, anything you need is in the bylaws. You can do it large or very easy, very standard forms The next step is the stamp duty filling., you are not going to pay any tax about that, but you need to file this, stamp duty. This is exempt, but you need to, to file it., after that, you go to the company’s house and you ask for registration of the company.
Step 5: Registration and Tax Number
Registration takes two to three weeks. Stamp duty must be filed (exempt from payment). Once registered, the company obtains its NIF tax number. Without this the bank account remains blocked. With the NIF, the company can register for VAT and economic activities tax.
Step 6: Electronic Certificate
Although not required for incorporation, obtaining the company’s electronic certificate is strongly recommended. All notifications from tax authorities and administrations are sent electronically. Without this certificate, notifications are deemed delivered even if unseen by the company.
Step 7: Foreign Investment Declaration
When a foreign investor acquires shares in a Spanish company, a declaration of the percentage of share capital controlled must be filed for statistical purposes. A corresponding liquidation statement will be required when the investment is eventually disposed of.
Denis Philippe
Thank you, Alfonso. Very clear and practical. The importance of online identification and electronic certification is a theme running through many of these jurisdictions.
We will move next to Portugal. I give the floor to Luís Menezes Leitão from Antonio Leitão e Carlos Serafim in Portugal.
Formation of a company by foreign shareholders in Portugal
Luís Menezes Leitão – Antonio Leitão e Carlos Serafim
Portugal’s incorporation system is similar to Spain’s, though with some differences.
The main elements required for incorporation are:
The company name, the company purpose, and the registered office authorized by the competent authorityas certified by the National Register of Legal Entities (RNPC). Name certification is normally obtained within three working days, or on urgent request.
The founding shareholders (up to five, either individuals or legal entities, national or foreign) and the articles of association (estatutos), approved by the shareholders. Unlike Spain, notarial approval of the articles is not required in Portugal: they may be approved in the presence of a registered private lawyer.
If a foreign company is a shareholder, it must provide proof of legal existence and obtain a Portuguese corporation identification number prior to registration.
Foreign representatives must be registered with the Portuguese tax authority. All appointed representatives must provide a signed declaration of acceptance of office.
Unlike Spain, the bank account used to deposit share capital is not an escrow account. A certified accountant must be appointed to ensure ongoing compliance, and tax registration with the Portuguese authorities must occur within 15 days of commercial registration.
Directors must also register with the Portuguese social security system and make contributions, regardless of whether they receive remuneration and regardless of nationality.
Portugal is a welcoming jurisdiction for foreign investment and company formation, with a process broadly similar to Spain. We welcome any clients looking to establish here.
Thank you very much for your attention, and my excuses, once more. Thank you.
Denis Philippe
Thank you, Luís. Very informative. There is, of course, a significant Belgian interest in Portugal, so we look forward to working together.
We now move to Turkey. I give the floor to Berkan Özer from Ictem Legal.
Formation of a company by foreign shareholders in Turkey
Berkan Özer – Ictem Legal
In Turkey, there are two main company types: the limited liability company (LLC) and the joint stock company. LLCs are better suited to family operations, with at least one shareholder acting as manager. Joint stock companies have a more formal corporate structure. The minimum capital is TRY 50,000 (approximately €1,000) for an LLC and five times that for a joint stock company.
The Incorporation Process
The first step is obtaining a tax number for the foreign investor, whether an individual or a corporate entity. This does not require presence in Turkey and can be handled with a tax power of attorney. All required information (company name, capital, articles of association, board composition) is then filed via the online MERSIS system. For joint stock companies, the shareholder identity must be declared to the trade registry at incorporation. For LLCs, the current shareholder list must be updated on every share transfer.
Opening a temporary bank account is the most challenging step. Due to AML and financial crime regulations, banks frequently require additional documentation or an in-person visit to Turkey, even for a temporary account. Once opened, the minimum capital must be transferred and blocked. The bank then issues a letter confirming payment, which is submitted to the trade registry.
Signature certification requirements differ by company type. For joint stock companies, notarised signature specimens delivered by post are sufficient. For LLCs, the managers must appear in person before the trade registry office to provide signature specimens.
A competition authority fee of 0.04% of the capital amount is payable. Certain regulated activities (such as banking or financial institutions) require prior approval from the Ministry of Trade. Following approval and registration with the trade registry, publication in the trade registry gazette completes the incorporation process.
After incorporation, a long-term bank account must be opened and, where applicable, work permits obtained for foreign employees. The shareholding structure must also be reported to the E-TUYS system (separate from MERSIS) for statistical purposes, identifying which foreign persons or entities hold shares in the Turkish company.
Denis Philippe
Thank you. A well-structured presentation, and the steps were very clearly defined. The MERSIS and E-TUYS registration systems reflect Turkey’s position outside the EU and the corresponding need to monitor foreign corporate structures.
I now give the floor to our Romanian colleague, Cosmin Stefanescu from Duncea, Stefanescu & Associates.
Formation of a company by foreign shareholders in Romania
Cosmin Stefanescu – Duncea, Stefanescu & Associates
Thank you, Denis. Romanian law is of French origin, and as a result there are many similarities with Belgian and Luxembourg law in terms of company types and structure. Romanian law recognises five company types.
The most common by far is the limited liability company (SRL), followed by the joint stock company (SA). The SA requires a more rigorous corporate structure, which is why most investors opt for the SRL. A company may be owned by a sole foreign shareholder, qualifying as a subsidiary, with no restrictions on foreign shareholding.
Shareholders may be natural persons or legal entities, domestic or foreign, in any combination. An SRL may have a sole shareholder and one administrator (director), or a board of directors.
The professionals typically involved in formation include lawyers, certified translators (many documents are bilingual or in English or French), notaries, banks, the trade register, the Official Bulletin of Romania, tax authorities, accountants and tax advisers.
Romania remains an attractive business destination with significant room for growth. We are here to assist with any queries.
Denis Philippe
Thank you, Cosmin. The company types are familiar from the Belgian and Luxembourg systems. I also want to take this opportunity to greet Joshua, who has been absent from our recent meetings, and Olga, whose presence reminds us of the thoughts we all hold for Ukraine and the Ukrainian people.
We are also delighted to welcome Sam Ding from Yuan Wen Shanghai Law Firm, our newest member and a representative of the world’s second-largest economy. Sam, the floor is yours.
Formation of a company by foreign shareholders in China
Sam Ding – Yuan Wen Shanghai Law Firm
Here are the key points on foreign company formation in China.
China welcomes foreign investment and operates a negative list system: only sectors specifically named on the list are restricted or prohibited. For everything else, investment is permitted freely. The list has shortened considerably over the past decade.
Foreign companies entering the Chinese market are entitled to national treatment: they should be treated on equal terms with domestic Chinese companies. Profits, IP and other legal rights are protected by law.
The formation process has been significantly simplified. For most industries, registration with the market regulatory authorities is all that is required, with no need for special pre-approvals.
Many cities and regions actively compete for inward investment, offering tax reductions for a defined period, lower land costs in industrial parks and simplified customs procedures for equipment imports.
In short, China’s policy is to welcome foreign investors. The rules are clearer, the process is faster and foreign investors are treated more fairly than before.
Denis Philippe
Thank you, Sam. A very efficient presentation. China’s process sounds straightforward, though in practice the detail always matters and good local counsel is essential.
My thanks to all the speakers, and to everyone who joined us today. A few observations stand out across all the presentations. First, there is a clear trend towards liberalisation: China is perhaps the most striking example, but the direction is consistent. Second, there remains a tension between that liberalisation and the persistent requirements for local bank accounts, local directors and in-person appearances. Third, online filing is now available in most jurisdictions, but it is not always easy to reconcile with KYC requirements and the continuing role of notaries. Finally, requirements around shareholder registration vary considerably and depend partly on company type. These contradictions are worth bearing in mind.
The slides and recordings will be published on the Interleges website. My particular thanks to Annalisa for all her work in organising the event. I wish everyone a good afternoon.