San Marino is a microstate located in southern Europe surrounded on all sides by Italy. Spread over an area of mere 61 sq. km with a total population of merely 35000 people.
Despite its small size, San Marino boasts a rich culture dating back to 300 AD. The country is also well known for its picturesque landscape, walled town of San Marino, Museums, historic landmarks, and scenic beauty. San Marino has a thriving economy relying heavily on the financial sector, tourism, and manufacturing.
Types of business structures in San Marino
In San Marino, there are different types of business structures available for entrepreneurs and investors looking to establish a business. The most common business structures in San Marino are tabulated below:
| S# | Types of companies | Local name | Min.paid-up capital required |
| 1. | Sole Proprietorship | Ditta Individuale | No minimum capital required |
| 2. | Partnership | Società in Accomandita Semplice (S.a.s.) | No minimum capital required |
| 3. | Limited Liability Company (LLC) | Società a responsabilità limitata (S.r.l.) | €25,000 |
| 4. | Joint Stock Company (JSC) | Società per Azioni (S.p.A.) | €120,000 |
| 5. | Cooperative | Società Cooperativa (S.c.) | No minimum capital required |
Sole proprietorship
This is a simple business structure where the business is owned and operated by one individual who is responsible for all aspects of the business.
Partnership
A partnership is formed when two or more individuals decide to run a business together. The partners share the profits and losses of the business and are jointly responsible for all business operations.
Limited Liability Company
An LLC is a separate legal entity from its owners and provides limited liability protection to its owners. It means that in the event of loss, debt, or bankruptcy, the liability falls on the company and not its owners. The loss may be reimbursed from the assets of the company only.
Joint-Stock Company
A JSC is a type of corporation where ownership is represented by shares of stock. The shareholders are not liable for the company’s debts and losses in personal capacity. A JSC business is usually preferred by large businesses that require heavy capital to initiate and operate a business.
Cooperative
A cooperative is an organization owned and controlled by its members who use its services. Different companies or government departments or individuals from different companies may form a corporation. Essentially, a corporation is constituted for the benefit of society more than for making profits.
Registration and incorporation cost of companies in San Marino
The costs involved to register and incorporate a company in San Marino depend on the type of company, its size, and services offered. Some costs that are inevitable pertain to state and local fees, as listed below:
Registration fees
The cost of registration fees can vary depending on the type of company you wish to set up. For example, the registration fee for a limited liability company is €1,200.
Notary fees
Notary fees is paid for the preparation and registration of the company’s articles of association. The cost of notary fees can vary depending on the complexity of the articles of association but generally range from €500 to €1,000.
Legal fees
You may need to hire a lawyer to assist you with the registration process and legal requirements. The cost of legal fees can vary depending on the complexity of the legal work involved.
Corporate tax
San Marino has a corporate tax rate of 17.5% on profits, and there is a minimum tax of €1,000 per year.
Accounting fees
You will need to keep accurate accounting records and file annual financial statements with the San Marino tax authorities. The cost of accounting services can vary depending on the complexity of your business and the level of support you require.
Operational cost of doing business in
The operational cost of doing business in San Marino can vary depending on various factors such as the type of business, the size of the business, the industry, and the location. Here are some costs to consider:
Rent or lease costs
The cost of renting or leasing commercial space in San Marino can vary depending on the location, size, and quality of the property. As a small country, real estate prices in San Marino are generally higher than those in neighboring countries.
Employee salaries
The cost of salaries and wages in San Marino can vary depending on the industry and the skill level of the employees. According to data from the National Institute of Statistics, the average gross monthly salary in San Marino in 2021 was €2,921.
Utility costs
The cost of utilities such as electricity, water, and gas can vary depending on the consumption of the business.
Communication costs
The cost of communication services such as internet, phone, and mobile services can vary depending on the provider and the package selected.
Taxes and fees
In addition to corporate taxes, businesses in San Marino may also need to pay other taxes and fees such as value-added tax (VAT) and social security contributions.
Insurance
Businesses may need to purchase various types of insurance such as liability insurance, property insurance, and workers’ compensation insurance.
Overall, the operational cost of doing business in San Marino can be higher than in neighboring countries due to the relatively high cost of living and doing business in the country. However, the country’s strategic location and favorable tax regime may offset some of these costs for certain types of businesses.
Business environment in San Marino
San Marino lies in the heart of Italy. It has a mixed economy with a focus on the service sector, including banking, insurance, tourism, and retail. The country’s business environment is generally considered to be stable and supportive of foreign investment. Here are some key factors that contribute to the business environment in San Marino:
Strategic location
San Marino is located in a strategic position in the center of Italy, making it a gateway to the European market. This offers businesses the opportunity to establish themselves in a stable and secure environment and take advantage of the country’s excellent transport links to the rest of Europe.
Favorable tax regime
San Marino offers a competitive tax regime that is designed to attract foreign investment. The country has a corporate tax rate of 17.5% on profits, and there is a minimum tax of €1,000 per year.
Stable political environment
San Marino has a stable political environment, which is conducive to business growth and development. The country has a democratic government and is politically neutral, which provides a stable and secure environment for businesses to operate.
Skilled workforce
San Marino has a well-educated and skilled workforce that is well-equipped to meet the needs of modern businesses. The country has a high standard of living and a strong education system that produces a highly skilled workforce.
Supportive regulatory framework
San Marino has a supportive regulatory framework that is designed to encourage business growth and development. The country has a transparent legal system and a strong banking system that provides a safe and secure environment for businesses to operate.
Overall, the business environment in San Marino is generally considered to be stable and supportive of foreign investment.
