The false myths about San Marino… finally dispelled.If I come to San Marino, will my number plate be photographed and will I be subject to controls?
This information comes from a period of tense and complex relationship between Italy and San Marino, when the presence of the Italian armed forces was more frequent, especially along the Strada Statale Consolare Rimini-San Marino. Today the Italian Forces are present on the borders of San Marino with same frequency as in many other “non border” areas. Currently there are no cases of sanctioned individuals solely because they came to San Marino.
Can anonymous bank accounts be opened in San Marino?
In San Marino no one has ever opened anonymous bank accounts: the due diligence performed by San Marino banks is very strict and, most of the times, more careful and accurate than the Italian banks or other European countries. Any transaction is checked and carefully analysed in order to avoid any financial crime offence by account holders.
If I set up a company in San Marino, will it arouse suspicions in Italy?
The double taxation treaty between Italia and San Marino governs all the relationships between the two Countries. An Italian individual or whosoever sets up a Company and performs his activity in San Marino within the limits of applicable law of the two Countries (in particular in accordance with the laws on offshoring) and regularly declares the profits or gains of the San Marino-based Company in the annual tax return does not face any real risks. Suspicions are an arbitrary act and… as it is said: “omnia munda mundis”, meaning Everything is pure to pure ones.
Can ''dummy'' companies be opened in San Marino?
San Marino is one of the few Countries worldwide that applies laws to avoid the set up of dummy corporations that do not have a real presence in the Republic. Although it is not possible to verify that every day people are working in their offices (as this is not required anywhere in the world in order to have a company), San Marino performs regular controls in order to ensure every company has a legal or operating office for its own specific use endowed with building conformity and functions suitable for the activities to be performed in it, that the company has at least a landline and registered utilities and that the official notices are regularly received.
Compare such attention to the thousands of companies registered “at the accountants’ offices” both in Italy and elsewhere: you give the answer.
A client of mine told me that if I invoice him from San Marino ''he will be in troubles''. I that true?
Maybe your client should refresh his/her knowledge, as they are still stuck to the “black-list” times when those who performed transactions with San Marino from Italy was required to transmit a telematic communication of the transaction that usually was performed by the accountant resulting in increased costs. Today, as San marino has been removed from the ‘black list’ countries according to the Incentives Decree, the aforementioned provision has been repealed and therefore the invoices issued in San Marino are the same as those issued in Italy. If someone raises an objection, you can suggest that they search on Google “Double taxation agreement between Italy and San Marino”.
My Swiss accountant told me that San Marino has an equivalent legal status as Italy. Is that true?
Your accountant must have some issues with history: San Marino was founded in 301 AD, Italy only in 1946. It is true that in San Marino everyone eats the piadina (a local flatbread) as in Rimini and people speak with a similar accent but, cultural influences apart, those who mix up the two Countries give only proof of their ignorance and they unfortunately pass it on to their clients. We therefore invite you to check all the sources of information: do not trust other people’s evaluations.
Are sammarinese companies commonly used for VAT avoidance schemes?
VAT is not charged at all in San Marino: hence we don’t see how you can evade it. All transactions made from or to San Marino are Vat-exempt (the same happens with all the non-EU Countries). Those who import VAT-exempt goods must pay it in their own Country, if they fail to do that it does not concern San Marino. With regards to the sales within the Country, those business operators who import goods into San Marino pay a “monofase” tax (described in more detail in the menu page), which is recognized as equivalent to the VAT and which discourages the “clandestine” export of the goods declared for the internal sale.
Is it true that natural persons in San Marino do not pay the taxes?
Of course not! Natural persons are subject to the income tax based on some brackets as in the page “Corporation Tax”
Is San Marino law system is the same as the one adopted in Italy?
Absolutely not. The San Marino system is very different from the Italian one even if, obviously, there might be some influences in the attempt to legislate in a manner compatible with the neighbouring Country, just give a look at the Laws and Decrees reported on our website or on the website of the Great and General Council in order to see the profound differences with other Countries.
I've been told that in the end no one ever controls anything in San Marino... is that true?
In San Marino controls exist indeed and they are performed in the right measure: not more, but also not fewer. The are fiscal inspections, anti-money laundering enforcement, spot checks carried out by the Employment Office, the Guardia di Rocca Authorities with reference to imports and, just like any other Country, authors of infringements are effectively punished and sanctions are imposed. The judicial system is independent and it suffices to read a newspaper to understand that no one is exempted.
Questions related companies.Do I have to be a resident in order to be allowed to set up my own company?
Only certain trading activities (in particular shops and public concerns) require that 51% of the shares must be owned by a San Marino resident (unless a special preventative authorization must be released by the Trade Committee). In the majority of cases, anyone can start up their own services or e-commerce companies, no matter the nationality and /or the residency of the partners or directors.
If I start up my own business, will I be given a residence permit?
There are some cases where entrepreneurs who increase the average number of working employees, make investments and/or operate in the high-tech sector, are entitled to apply for a stay or residence permit although this benefit is not extended to all the operators who set up a company.
Visit the page about ”Stay and Residence Permits” for more information.
Does the corporate capital have to remain deposited in a bank?
Absolutely not. The corporate capital, once it has been paid up, can be used to fulfill the goals described in the business purpose and therefore for the current expenses or investments made by the Company.
If I advance money for the Company can I then have it back?
Of course. It frequently happens that, even before the company’s formation, it is necessary anticipate the money for the registration charges and fees, the deposits for the office rental or other. In this case, provided with all the receipts, the partner or director can have back the anticipated amount, even on the same day that the corporate capital has been lodged. In any case the expenses must comply with the business purpose.
Can I withdraw the profits in cash?
there are no special requirements in relation to this, however it should be noted that cash withdrawals are limited and they should be used only in those cases when it is not possible to correctly channel payments. For small amounts it is possible to withdraw profits in cash, if necessary, although it is not recommended.
Do I have to pay the tax on the profits also in my Country of residence?
Of course you do! In some Countries the dividends will be summed to your local income for tax purposes, in other Countries there is a flat tax on foreign dividends, therefore we recommend to ask advice to your accountant since in each Country the dividends from foreign participations are regulated in a different way and taxed in a different way.
Am I allowed not to declare the profits generated in San Marino?
No, you aren’t. We recommend that you declare all your profits and that you work with full transparency both for San Marino and for your Country of residency since, in the end, the total amount of the corporate and personal taxes is perfectly acceptable.
Can the main office of my San Marino business be based at the company's address of a friend of mine ?
This is not allowed. Any company must have a main office for its own specific use. It is not possible to “share” the office with other companies unless inside the same building there are two separate offices endowed with building conformity and functions suitable for the activities to be performed. Within 180 days from the date of the license issuance the registered office of the company will be visited by the Antifraud Department of the Civil Police in order to verify if the Company has the space and the minimum equipment required to perform the activities designated in the Corporate Purpose.
If VAT is not applied, what is the procedure to import goods?
For goods purchased by San Marino traders from Italy or abroad a 17% “monofase” tax rate is applied (for more information visit the relevant page). Goods purchased by San Marino traders in European Community Member States, other than Italy, and destined for the Republic of San Marino must arrive in San Marino accompanied by a transit document, or declaration and, if their value is above 5,000, an electronic document must be issued by the Guardia di Rocca Authorities (for more details visit the page about the customs formalities).
Can you tax deduct everything in San Marino?
A company can deduct from its financial statement all the expenses incurred to achieve the business purpose. Even in San Marino there are some limitations applied by the Law and the Tax Department in order to avoid abuses but, all things considered, the deductibility of costs is more flexible, clearer and easier compared to other Countries, and it rarely happens that at the end of the year your statement says that you have earned a lot of money… but your pockets are empty.
Can I hire my wife in my future San Marino-based company?
The employment of individuals who do not live in San Marino is possible however priority must be given to workers from the labour mobility lists (as long as there are functions that satisfy your requirements).
These parameters are however described in generic terms and they have to be checked with the Employment Office that is always ready to assist new entrepreneurs in recruiting and selecting employees.