Establish a Foundation in Italy

Establishing a foundation in Italy requires compliance with specific legal requirements and adherence to a structured procedure. Foundations are legal entities established to pursue a non-profit purpose through the allocation of assets for philanthropic, cultural, scientific, or other socially beneficial activities. Below is a comprehensive guide on the legal aspects and steps involved in creating a foundation in Italy.

1. Legal Framework

In Italy, foundations are regulated primarily by the Italian Civil Code (Articles 14-42) and by sector-specific laws applicable to certain types of foundations (e.g., banking, cultural, or charitable foundations). A foundation’s legal structure differs from that of an association, as it is asset-based rather than membership-based.

The primary legal references include:

• Italian Civil Code (Codice Civile), Articles 14-42 – General provisions on foundations and associations.
• Presidential Decree No. 361/2000 – Rules on legal recognition and registration of foundations and associations.
• Legislative Decree No. 117/2017 (Codice del Terzo Settore – Third Sector Code) – Regulates non-profit organizations (Enti del Terzo Settore – ETS) and provides tax benefits for recognized entities.
• Legislative Decree No. 460/1997 – Defines tax treatment and benefits for non-profit organizations (ONLUS).

There are two main types of foundations:

• Recognized Foundations: These acquire full legal personality through registration in the Public Register of Legal Entities.
• Non-Recognized Foundations: These do not undergo the formal recognition process and, as a result, do not enjoy the same legal protection and autonomy as recognized foundations.

2. Key Requirements to establish a foundation in Italy

To establish a foundation in Italy, the following elements must be determined:

• Purpose: The foundation must have a non-profit objective in sectors such as education, culture, health, scientific research, or social welfare.
• Assets: An endowment of sufficient financial resources or assets is required to sustain the foundation’s activities.
• Statute (Bylaws): The foundation must draft a statute that outlines its purpose, governance, and operational rules.
• Founders: A foundation can be established by individuals or legal entities (corporations, institutions, or public bodies).

3. Steps to Establish a Foundation in Italy

Step 1: Drafting the Statute

The statute (or bylaws) is a fundamental document that should include:

• Name and registered office of the foundation
• Purpose and scope of activities
• Endowment and financial structure
• Governance structure (Board of Directors, President, and other governing bodies)
• Rules for asset management and financial reporting
• Dissolution procedures and asset allocation in case of liquidation

Step 2: Execution of the Deed of Foundation

The foundation must be established through a formal notarial deed (atto pubblico) executed before a notary public, as required by Article 14 of the Italian Civil Code. The deed must specify the founder’s will to allocate assets for the stated purpose.

Step 3: Request for Legal Recognition

To obtain legal personality, the foundation must apply for recognition by submitting the necessary documentation to the relevant authority:

• Prefecture (Prefettura): For foundations operating at the national or regional level.
• Region (Regione): For foundations with a local scope.

The competent authority assesses the foundation’s compliance with legal requirements and grants recognition through a formal decree in accordance with Presidential Decree No. 361/2000.

Step 4: Registration in the Public Register

Once recognized, the foundation must be registered in the Public Register of Legal Entities (Registro delle Persone Giuridiche) maintained by the Prefecture or Regional authority, as required by Presidential Decree No. 361/2000. Registration grants full legal personality, enabling the foundation to enter into contracts, own property, and act in legal matters.

Step 5: Registration in the Registro Unico Nazionale del Terzo Settore (RUNTS)

Foundations that intend to operate as part of the Third Sector in Italy must register with the Registro Unico Nazionale del Terzo Settore (RUNTS), introduced by Legislative Decree No. 117/2017.

This register is managed by the Ministry of Labor and Social Policies and is essential for foundations seeking recognition as Ente del Terzo Settore (ETS). Registration in the RUNTS allows non-profit entities to access specific tax benefits, public funding, and enhanced legal recognition.

The registration process requires the submission of the foundation’s statute, financial records, and governance structure to ensure compliance with Third Sector regulations.

Step 6: Tax Registration and Compliance

The foundation must obtain a tax identification number (Codice Fiscale) from the Italian Revenue Agency (Agenzia delle Entrate) and, if applicable, register for VAT (Partita IVA). Depending on its activities, the foundation may benefit from tax exemptions if it qualifies as a non-profit organization (Ente del Terzo Settore – ETS), as outlined in Legislative Decree No. 117/2017 (Codice del Terzo Settore).

4. Governance and Compliance

After establishment, a foundation must comply with ongoing legal and financial obligations, including:

• Filing annual financial statements
• Adhering to governance rules outlined in the statute
• Maintaining transparency in financial operations and asset management
• Complying with reporting obligations for tax-exempt status, in line with Legislative Decree No. 117/2017

5. Conclusion

Setting up a foundation in Italy involves a structured legal process that ensures transparency, sustainability, and adherence to non-profit principles. Legal recognition enhances the foundation’s credibility and ability to operate effectively.