Holding company account in Italy: PEX regime, dividends, bank rules

The società di partecipazione: role and possible forms

A holding company account in Italy serves an SRL or SpA whose purpose is to hold shareholdings, centralising dividends, proceeds from selling stakes and intragroup funding. The bank checks governance, substance in Italy and compliance with the participation exemption conditions, and such holdings are used by entrepreneurial families in northern Italy, foreign groups established in Italy and funds structuring their acquisitions.

An Italian holding is most often an SRL or SpA whose purpose is to hold shareholdings. An Italian holding company is used by entrepreneurial families in northern Italy, foreign groups established in Italy and funds structuring their acquisitions.

Dividends received taxed on only 5%

Dividends an Italian company receives from subsidiaries are in principle subject to IRES on only 5% of their amount, unless they come from a privileged tax country. The bank therefore sees large inflows that the holding must be able to link to each subsidiary.

Capital gains on disposals and PEX conditions

The participation exemption regime exempts 95% of capital gains when the stake has been held for at least twelve months, recorded as a financial fixed asset, and the subsidiary carries on a business. The file given to the bank should document these conditions.

Withholding on dividends paid to foreign shareholders

Dividends paid by an Italian company to a non-resident are in principle subject to 26% withholding, reduced by tax treaties. Eligible EU or EEA companies may benefit from a 1.2% rate or the parent-subsidiary exemption.

Consolidato fiscale and intragroup flows

A holding controlling more than 50% of its Italian subsidiaries can opt for national tax consolidation. Transfers linked to that consolidation, like intragroup loans, run through the holding's account and must be backed by written agreements.

Interest limitation and holding company debt

Under the EU anti-avoidance rules transposed in Italy, net interest expense is deductible up to 30% of tax EBITDA. A holding that borrows to buy stakes should show the bank a repayment plan consistent with expected dividends.

Titolare effettivo and holding governance

The bank identifies the individuals who control the holding, directly or through a shareholders' agreement, and reviews the board's composition. For a family holding, it often asks for the ownership tree across generations and any usufruct over the shares.

Substance expected from a holding based in Italy

A holding company in Italy with no directors on site, no office and no meetings held locally draws attention from banks and the tax authority. At Intesa Sanpaolo, as at other major banks, the review covers the place of effective management, decision-makers and how well flows match the business.

Passive entity under CRS and reporting controllers

A pure holding is generally treated as a passive non-financial entity. The Italian bank then identifies its controlling persons and sends their data to their country of residence; a shareholder resident in France declares shares and dividends under French rules.

Standard file for an Italian holding account

Prepare the deed of incorporation and articles, visura camerale, partita IVA and PEC, latest financial statements, a group chart with percentages, shareholder agreements, ID for directors and beneficial owners, and evidence of where the holding's capital came from.

Documents to prepare for a holding company account in Italy

To open a holding company account in Italy, or an Italian holding company account, first gather the company's documents: deed of incorporation and articles, visura camerale, partita IVA, PEC address and latest financial statements. Add the group chart with ownership percentages, shareholder agreements, ID for directors and beneficial owners, and evidence of where the holding's capital came from. Present them in the order the bank lists them.

The bank is next interested in governance: the board's composition and the people who control the company, directly or through a shareholders' agreement. For a family holding, it often asks for the ownership tree across generations and any usufruct over the shares. Prepare these diagrams with consistent figures, since any contradiction between documents delays the analysis. Keep a copy of each diagram.

For a holding account, finally describe the expected flows: subsidiary dividends, proceeds from selling stakes, intragroup loans and dividends paid to shareholders. State the currencies and frequency. The exact documents vary by bank, no timing is guaranteed, and a group already established in Italy with directors and offices on site generally presents a file that is easier to analyse. Update the table if your flows change.

Questions to ask before opening an Italian holding account

Before opening an Italian holding account, ask the bank how it analyses the holding's substance: place of effective management, decision-makers, meetings held locally, and how well flows match the business. At Intesa Sanpaolo, as at other major banks, these are usual criteria. Ask it to spell out what it requires rather than guessing its expectations.

Ask about the treatment of dividends received from subsidiaries, taxed in principle on only 5%, and of capital gains exempt at 95% if the holding conditions are met. Ask which supporting documents it expects to link each flow to a subsidiary and to document the PEX conditions, including a holding period of at least twelve months. Keep these documents with the file.

Finally, ask how dividends paid to foreign shareholders are handled, subject in principle to 26% withholding reduced by treaties, as well as intragroup loans linked to a tax consolidation. Clarify fees, transfer times and the written agreements required. Ask the bank to confirm these points.

Common mistakes with an Italian holding company

The first mistake is to create a holding without substance. A company with no directors in Italy, no office and no meetings held locally draws attention from banks and the tax authority. The review covers the place of effective management, decision-makers and how well flows match the business. It is better to organise a real presence before applying. This presence must be proved by documents.

The second mistake is to leave flows undocumented. Dividends received must be linkable to a subsidiary, and exempt capital gains require a file showing a twelve-month holding, recording as a financial fixed asset and the subsidiary's business activity. Likewise, an intragroup loan without a written agreement weakens the justification of transfers. Keep these papers with the account records.

The third mistake is to ignore CRS. A pure holding is generally treated as a passive non-financial entity, and the Italian bank then identifies its controlling persons and sends their data to their country of residence. A shareholder resident in France declares shares and dividends under French rules, which a tax adviser should confirm. Confirm this before opening the account.

Italian holding or foreign holding: how to choose

The società di partecipazione most often takes the form of an SRL or SpA whose purpose is to hold shareholdings. It is used by entrepreneurial families in northern Italy, foreign groups established in Italy and funds structuring their acquisitions. This choice should match the reality of your group. Check that this choice fits your real needs.

Compare with a holding located in another country according to your subsidiaries, shareholders, financing and distribution timetable. A holding that borrows to buy stakes must show a repayment plan consistent with expected dividends, within the interest deduction rules. Tax consolidation can also simplify flows, above 50% ownership. Revisit the comparison each year. Ask an adviser to test each scenario.

Before any decision, have your project validated by an adviser who knows Italian company law and taxation, and check the conditions with the bank and the competent authorities. Tax regimes evolve, and a written validation remains the best protection. Then keep the file up to date, because the bank periodically reviews structures. Keep that validation with the account documents.