Investments and Real Estate

Model 231: Corporate Administrative Liability and Business Compliance

Corporate responsibility has become an increasingly important issue in the Italian legal system following the introduction of Legislative Decree No. 231/2001, which extended to companies and entities the possibility of being held liable for crimes committed by individuals operating within them. This legislation directly affects corporate organization, governance, and risk management, requiring companies to adopt adequate preventive measures to avoid consequences that, in the most severe cases, can include permanent prohibition from conducting business activities.

The adoption of an organizational, management, and control model pursuant to Legislative Decree 231/2001 also represents a significant competitive advantage. In fact, for companies, including foreign ones, wishing to participate in public tenders in Italy, adopting a Model 231 can be a rewarding factor: such models are recognized within the framework of the legality rating awarded by the AGCM, which can positively impact the assessment of an economic operator’s reliability in public procurement procedures.

For foreign companies operating in Italy, this issue is particularly significant. Opening a branch or permanent establishment in the country requires engagement with a regulatory framework that may differ substantially from that of the home country, and a lack of knowledge of Italian corporate liability rules can expose the company to significant financial, operational, and reputational risks.

Boschetti International Law Firm assists Italian companies and international groups in adapting to the regulations, from drafting the 231 organizational model to establishing the Supervisory Body, and through the ongoing management of corporate compliance, with the aim of ensuring full compliance with the Italian legal system and the tangible protection of the company’s assets.

What is legislative decree 231/2001 and corporate administrative liability

With Legislative Decree 231, adopted in implementation of Delegated Law No. 300/2000, the Italian legislator introduced a principle that profoundly changed the relationship between business and criminal law: when a crime listed in Legislative Decree 231/2001 is committed by senior management or employees, and the offense serves an interest or provides an advantage to the company, liability does not fall solely on the individual who committed the act, but also on the entity itself. Although formally classified as administrative, corporate liability is essentially criminal in nature, as it is determined within the framework of a criminal trial and can lead to significant financial and prohibitory sanctions.

The rationale behind the legislation lies in overcoming a long-established principle under which legal entities could not be held accountable for criminal acts carried out by their organs or collaborators. The legislator recognized that corporate organization, in its structures and processes, can effectively facilitate or favor the commission of offenses in the course of business activities, and therefore established a system in which the company must demonstrate that it did everything within its power to prevent such conduct.

The tool through which an entity can provide this demonstration is the Model 231, an organized set of procedures, protocols, rules, and internal control mechanisms, built on the basis of a risk-mapping of offenses related to the different phases of the company’s activities. The law provides that a company can exclude its liability by proving that it had adopted and effectively implemented an adequate Model 231 before the offense was committed, and that it entrusted a body with autonomous supervisory powers to verify compliance and ongoing updates.

Thus, the Model 231 is not merely a formal requirement, but a strategic instrument for the company: it reduces the risk of sanctions, strengthens a culture of legality within the organization, and represents a key component of corporate compliance that fosters the trust of stakeholders, business partners, and financial institutions.

Predicate offenses: the 231 offense catalogue

Corporate liability under Legislative Decree 231/2001 does not apply to every crime, but only when one of the offenses expressly listed in the decree, known as predicate offenses, is committed, and such offense is carried out in the interest of or to the advantage of the company. The catalogue is extensive and subject to continuous expansion by the legislator. Current categories include crimes against Public Administration, such as corruption and the improper receipt of public funds, corporate crimes, tax offenses, violations of health and safety at work, environmental crimes, money laundering and self-laundering, computer crimes, and offenses against industry and commerce.

Not all offenses in the catalogue are relevant to every company: exposure to risk depends on the business sector, organizational structure, and operational processes of the entity. However, a superficial or incomplete mapping of risk areas can expose the company to severe sanctions, including prohibitory measures. For this reason, identifying the offenses that are actually relevant to a specific company is a crucial step, requiring a tailored analysis capable of linking the company’s processes to risk areas, thus transforming the statutory list into a prevention system truly calibrated to the organization.

Sanctions provided under legislative decree 231

The sanctioning system under Legislative Decree 231/2001 is designed to directly impact the economic and operational cycle of the entity. Monetary penalties, calculated through a quota system, can reach very high amounts. However, it is in the area of prohibitory sanctions that the legislation shows its greatest impact: suspension or revocation of authorizations and licenses, prohibition from contracting with Public Administration, exclusion from funding and grants, up to the permanent prohibition from conducting business activities.

These measures are accompanied by the confiscation of the proceeds of the offense, which can also be applied “by equivalent,” and the publication of the conviction, with reputational consequences that can significantly affect the company’s market position. A particularly critical aspect is that prohibitory measures may be applied even during the precautionary phase, before a final judgment, with immediate effects on business continuity. This scenario makes it clear that a prevention-oriented corporate compliance system, implemented through an effective organizational model, is not merely a legal safeguard but a strategic choice to protect the company, its governance, and its credibility in the market.

The 231 organizational model: structure and functioning

The preparation and effective implementation of the 231 organizational model constitute the tool through which a company can exclude the so-called “organizational fault” and avoid liability if a crime is committed within its structure. It is an internal control system tailored to the company, born from an in-depth analysis of business processes, identifying areas exposed to criminal risk and introducing protocols, procedures, and control mechanisms consistent with the organization of the entity.

The model serves a dual purpose: on one hand, to concretely reduce the possibility of predicate offenses being committed; on the other, to provide an exonerating or mitigating element in the event that the entity is involved in a criminal proceeding.

The general part of the 231 model

The general part represents the overall architecture of the 231 system. This section illustrates the applicable legal framework, the company’s corporate structure, the governance system adopted, and the methodology used for risk mapping. It also contains the rules governing the internal sanctioning system, the regulation of the Supervisory Body, and a description of the information flows that the organization must direct to it. Essentially, the general part establishes the overall operating rules of the 231 organizational model and ensures its internal consistency.

The special part of the 231 model

The special part constitutes the operational core of the model. For each category of crimes relevant to the entity, this section identifies the sensitive activities, risk-exposed areas, and specific prevention protocols. The principles outlined in the general part are translated here into concrete measures: authorization procedures, segregation of functions, document controls, traceability of operations, and reporting obligations. The special part must be developed taking into account the specific characteristics of the individual entity, its organizational chart, the sectors in which it operates, and the stages of the production process, as only a 231 model built on the company’s specific reality can effectively fulfill the preventive function assigned to it by law.

The code of ethics

The Code of Ethics represents the value-based foundation of the Legislative Decree 231 compliance model. It sets out the principles of integrity, transparency, and legality that must guide the conduct of directors, managers, employees, and the organization’s business partners. It is not merely a programmatic statement without practical effect, but a binding instrument that complements the disciplinary system established by the model and strengthens the culture of corporate compliance within the organization.

A clear Code of Ethics within a 231 Model, aligned with the company’s activities, helps consolidate the organization’s reputation and promotes among all stakeholders a concrete awareness of the risks and responsibilities connected with business operations.

The Supervisory Body (OdV)

The Supervisory Body (Organismo di Vigilanza – OdV) represents the core of the control system established by Legislative Decree 231/2001. It is the internal body entrusted with the task of supervising the effective implementation of the 231 organizational model, verifying its adequacy in relation to the entity’s risks, and ensuring that the rules set out in the model are concretely applied in the day-to-day management of the company.

The role of the OdV is strategic from a dual perspective: on the one hand, it protects the company against the risk of predicate offenses being committed; on the other, it helps ensure that the 231 model can effectively perform its exonerating function in the event of criminal proceedings. A properly structured Supervisory Body strengthens the entity’s governance, protects management, and enhances the company’s credibility with stakeholders, business partners, and financial institutions.

Composition and independence requirements

The composition of the OdV must be tailored to the size and complexity of the entity. The Body may be monocratic or collegial and may consist of internal members, external members, or a mixed structure. In any case, the law requires its members to meet fundamental requirements of autonomy, independence, professionalism, and continuity of action.

Independence is the essential prerequisite: the Body must be able to operate without hierarchical constraints with respect to management, with direct access to company documentation and adequate budgetary autonomy. Members must also possess legal, organizational, and internal control expertise, enabling them to conduct a technical and effective assessment of the model’s functioning.

Functions, powers, and information flows

The OdV is responsible for overseeing compliance with the model, verifying its effectiveness in preventing offenses, and proposing updates when regulatory changes occur or when modifications affect the organization of the entity.

Among the activities entrusted to the Body are periodic reviews, targeted audits, analysis of corporate procedures, and the management of internal reports, including those received through whistleblowing channels. In order to carry out these functions, the OdV must be granted effective powers of access to documents, the ability to request information, and the authority to conduct independent controls.

A central element of the system is represented by information flows: the company is required to transmit to the Supervisory Body relevant information concerning risk areas and any anomalies identified, while the OdV periodically reports to the top management bodies through structured reports. A clear and well-documented reporting system is essential to demonstrate, also in judicial proceedings, that the control exercised by the entity has been effective and not merely formal.

Who is required to adopt the 231 model

One of the questions most frequently raised by entrepreneurs and directors is whether the 231 Model is mandatory and, more generally, who the recipients of the Model are. Strictly speaking, Legislative Decree 231/2001 does not impose an obligation on companies to adopt an organizational model: technically, it is a burden rather than a legal obligation. However, this distinction has very significant practical implications, because without the model the entity cannot in any way benefit from the exemption provided by law if a predicate offense is alleged.

The question of whether the 231 Model is mandatory must therefore be interpreted in substantive terms: its adoption represents a strategic choice aimed at protecting the company’s assets, operational continuity, and the personal position of directors. In many contexts, such as public tenders, extraordinary corporate transactions, banking relationships, and foreign investments, the 231 organizational model is now considered a key indicator of a company’s solidity and reliability.

The 231 model in publicly owned companies

For companies with public participation, the 231 Model integrates with the instruments provided by legislation on transparency and anti-corruption, becoming an essential part of the organizational framework that the legislature requires for publicly controlled entities. The absence of an adequate 231 organizational model may lead to observations by supervisory authorities, liability for directors, and significant reputational risks.

In this context, the proper structuring of the 231 system is not merely a formal requirement, but a guarantee of regulatory compliance and protection for management.

The 231 model in private companies

For private companies, the 231 Model represents a strongly recommended choice from both a legal and strategic perspective. A properly designed and implemented model makes it possible to significantly reduce the risk of financial and disqualifying sanctions, protect directors and shareholders from indirect liability, and demonstrate an organizational structure appropriate to the company’s needs.

Increasingly, banks, investment funds, industrial partners, and contractual counterparties require the existence of a corporate compliance system under Legislative Decree 231 as a condition for establishing or maintaining business relationships. The 231 Model should therefore not be regarded as a cost, but as an investment in governance, reputation, and competitiveness.

231 compliance for foreign companies operating in Italy

The expansion of a foreign company into Italy, through the establishment of a branch or a permanent establishment, entails not only growth opportunities but also the need for management to address the Italian regulatory framework on corporate liability. Among the most relevant aspects is the administrative liability of entities provided for by Legislative Decree 231/2001, which may also extend to foreign companies operating in the country.

Boschetti International Law Firm assists international companies in fully understanding and applying this regulatory framework, preparing the 231 organizational model in a way that safeguards the company’s operational continuity and assets. For small-sized companies, the firm also develops 231 models tailored to the company’s structure and operations, maximizing the effectiveness of the safeguards required by law without overburdening the internal organization.

Why a foreign company nust comply with legislative decree 231/2001

A foreign company operating in Italy may be held liable under Legislative Decree 231/2001 if a predicate offense is committed in Italy, or in any case in the interest or for the benefit of the Italian branch or operations, even if the entity’s main headquarters are located abroad.

Compliance with the 231 model therefore represents a strategic tool to protect the company’s assets, governance, and reputation in the Italian market.

Specific challenges for foreign directors

Foreign directors often operate in a regulatory and cultural environment that differs from that of their home country, where the concept of corporate liability and the risks arising from non-compliance with the 231 corporate compliance system may be underestimated.

Limited familiarity with the Italian legal and sanctioning framework, differences in governance practices between the home jurisdiction and the Italian legal system, and the need to coordinate group policies with Italian domestic law are among the main challenges that may expose the entity to liability under Legislative Decree 231/2001.

Boschetti International Law Firm provides comprehensive support in this area, assisting directors in understanding the specific risks, defining clear operational protocols, and managing 231 compliance in practice, with the aim of ensuring that the Italian branch operates in full compliance with the country’s regulatory framework.

Whistleblowing and the 231 model

The whistleblowing system is now considered one of the most effective tools for preventing predicate offenses within companies. Within the framework of Legislative Decree 231/2001, whistleblowing allows employees, collaborators, and third parties to report unlawful conduct or violations of the 231 Model through confidential and protected channels.

The adoption of an effective reporting system not only strengthens the culture of legality and integrity within the organization, but also constitutes a fundamental safeguard to demonstrate, during inspections or legal proceedings, the effective oversight exercised by the entity. A well-structured whistleblowing system reduces the risk of liability for the company and its senior management and contributes to strengthening the trust of stakeholders, business partners, and supervisory authorities.

Typical scenarios / Case studies

The typical scenarios have been developed by drawing on the most significant corporate immigration cases that the firm regularly handles, with the aim of creating structured, complex examples that help the reader navigate their own situation. The case studies, by contrast, illustrate individual real-life matters, anonymised to protect client confidentiality, presented with full factual and contextual detail.

Relocation

US professional chooses Italy: elective residence obtained and future planned

American professional obtains an elective residence visa while maintaining ties with the USA. Integrated assistance from legal strategy to property search..

Application completed in approximately 3 months without additional requests

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Business

US opera singer obtains work authorization in 7 days

American opera singer with contracts already signed with an Italian theatre. Self employment work authorization obtained on an urgent basis to meet professional commitments.

Work authorization issued within 7 days from submission of the application

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Real Estate

US client purchases property in Rome: secure transaction

American client assisted in the purchase of a property in Rome. Urban planning issues and contractual risks identified and resolved before signing, transaction completed through notarial power of attorney.

Purchase completed within one month, entirely managed remotely

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Business

American investor: from New York to a villa in Tuscany

Cross-border property transaction with full relocation service. Purchase of a high-end property, with tax status, residency and NHS registration handled remotely.

Complete relocation service, from property due diligence to handing over the keys

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Retirement

Canadian couple, retirement property in Puglia

From Toronto to the Itria Valley. Purchase of a farmhouse with cadastral issues, 7% flat tax on foreign pensions, elective residence visa and healthcare transition.

7% flat tax activated, cadastral issues resolved before the deed of sale

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Business

British entrepreneur, opening a business in Milan

Post-Brexit, a London-based tech entrepreneur establishes an operational headquarters in Milan. Immigration pathway as a non-EU national, company incorporation, and tax planning.

European operational hub established with self-employment visa successfully obtained

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Tax Planning

Swiss retiree: 7% flat tax regime in Southern Italy

A banking executive relocates from Zurich to Calabria. Management of the Swiss occupational pension pillar, Italy-Switzerland Tax Convention, and deregistration from the cantonal tax register.

7% flat tax activated on all foreign-sourced income

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Retirement

American couple: retirement project in Abruzzo with visa and flat tax

From Connecticut to Abruzzo. Elective residency visa, 7% flat tax coordinated with IRS and FATCA obligations, and transition from Medicare to the Italian NHS (SSN).

7% flat tax activated on Social Security and 401(k) pension income

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Relocation

German couple, from Munich to Tropea

Retired engineers from the Bavarian automotive sector. Multi-tier pension management, Italy-Germany Tax Convention, and the 7% preferential tax regime.

Three German pension pillars optimised with Italian flat tax

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Business

Startup tech: apertura filiale italiana per il mercato EU

A Bay Area SaaS company establishes a Milan headquarters. Innovative startup SRL, EU Blue Card for the team, transfer pricing, impatriates tax regime, and GDPR compliance.

Operational within 5 months, payroll cost −35% with impatriates tax regime

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Business

Fashion brand, representative office in Milan

Brand premium newyorkese apre presidio a Milano. Strutturazione per evitare stabile organizzazione, trasferimento direttrice creativa e gestione showroom.

Rischio stabile organizzazione prevenuto, presidio EU operativo

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Corporate

Manufacturing company, ICT transfers to Italy

Multinazionale giapponese trasferisce 3 figure chiave in Piemonte. Permessi ICT per manager e specialista, coordinamento consolare e regime impatriati per tutti i dipendenti.

3 trasferimenti completati in 4 mesi e mezzo, linea produttiva avviata nei tempi previsti

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How Boschetti Law Firm can help you with Legislative Decree 231: corporate administrative liability and business compliance

Boschetti International Law Firm supports companies through a comprehensive advisory process on the 231 Model, assisting Italian and foreign companies, as well as international groups operating in Italy, at every stage of the process of compliance with the applicable regulations.

Risk assessment and gap analysis

The advisory process begins with a preliminary analysis of the entity’s exposure to criminal risk. The firm carries out a mapping of business processes, identifies sensitive areas, and evaluates the adequacy of any existing control mechanisms, defining a framework of critical issues and priorities for intervention tailored to the specific characteristics of the company.

Drafting of the organizational model

Based on the analysis carried out, the firm prepares the 231 Organizational Model tailored to the entity’s structure, decision-making flows, and sector of activity. For small-sized companies, the firm develops organizational models that maximize the effectiveness of the safeguards required by law while respecting the simplified corporate structure typically found in small businesses.

A model that is not properly adapted to the company’s specific reality has a high risk of being considered inadequate in judicial proceedings. For this reason, drafting the model requires specific expertise in criminal business law and corporate compliance, as well as a concrete analysis of the company’s internal processes.

Establishment of the supervisory body

The firm assists the entity in establishing the Supervisory Body (Organismo di Vigilanza), identifying the composition most suitable to the size and complexity of the company and ensuring compliance with the legal requirements of autonomy, independence, and professional competence.

This assistance includes defining the information flows and preparing the documentation necessary for the proper functioning of the Supervisory Body. For small-sized companies, the firm designs 231 models that take into account their operational structure and decision-making dynamics. The approach is aimed at maximizing the effectiveness of crime-prevention measures while maintaining a streamlined organizational structure consistent with the company’s actual operations.

Periodic updates

An effective 231 Organizational Model requires ongoing monitoring and updating activities, taking into account legislative changes, modifications in the organization of the entity, and developments in the catalogue of predicate offenses. The firm supports companies in managing these activities, ensuring solutions that are sustainable and consistent with the entity’s operational needs.

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Investor visa: how to prove the source of funds?

The source of funds must be demonstrated through banking and financial documentation proving ownership, availability, transferability, and lawful origin of the capital: recent bank statements (typically covering the last 3 months), certifications from the financial institution, and documents evidencing the source of funds (income, sale of assets, donations, or other traceable transactions).

For the Italian investor visa (minimum €500,000 in a company or €250,000 in an innovative startup), documentation must be in Italian or English (or officially translated) and verifiable. Authorities carry out anti-money laundering checks and also require proof of no criminal convictions and of the lawful origin of the funds.

Real estate purchase as a foreigner: does buying a property grant a residence permit?

No, purchasing a property in Italy does not automatically grant a residence permit. A non-EU national may freely buy property, subject to the condition of reciprocity, but residing in Italy requires an independent residence title: elective residence, investor visa, work, or another legal ground предусмотрed by law.

However, owning property can be a useful requirement for several types of residence permits, particularly elective residence. It demonstrates a connection to the territory and satisfies the accommodation requirement, as well as indicating the availability of sufficient financial resources. Therefore, the purchase should be part of an overall immigration strategy.

Foreigner buying property in Italy: what taxes apply and what incentives are available?

A foreign buyer pays the same taxes as an Italian citizen: a registration tax of 9%, or reduced to 2% if the “first home” benefit applies; VAT at 4% or 10% if purchasing from a developer. In addition, there are mortgage and cadastral taxes (€200 each for a first home).

The “first home” benefit is also available to foreigners, provided they establish residence in the municipality where the property is located within 18 months of purchase. Special tax regimes for new residents or inbound workers may offer further advantages on the taxation of foreign

Elective residence based on property purchase: what is the minimum income required?

There is no minimum amount set by law. The consulate assesses on a case-by-case basis whether the applicant has sufficient means to support themselves without working in Italy. In practice, an annual income from passive sources (pension, annuities, dividends) of at least €31,000 for a single applicant is generally considered sufficient, with higher thresholds for dependent family members.

Elective residence is intended for individuals who wish to relocate to Italy without carrying out any work activity. Owning a property or having a long-term rental agreement strengthens the application. Proof of passive income sources is the key requirement.

Opening a representative office in Italy: what are the tax obligations and advantages?

A representative office does not carry out commercial activities in Italy: it promotes the business, gathers information, and manages relationships with clients and suppliers without entering into contracts. As it does not constitute a permanent establishment, it does not generate taxable income in Italy and is not subject to corporate income tax (IRES) or VAT on its activities.

The advantages: a physical presence in the Italian market without direct taxation, low start-up costs, and no obligation to prepare separate financial statements. The obligations: registration with the REA (Economic and Administrative Index) at the Chamber of Commerce, keeping accounting records for expenses incurred, and filing withholding tax returns if employees are hired.

Innovative startup in Italy: what tax incentives are available for foreign founders?

Foreign founders of innovative startups may benefit from a 30% personal income tax (IRPEF) deduction (up to 50% in certain cases) on investments in the company’s capital, the favorable tax regime for new residents, and exemption from Chamber of Commerce fees and stamp duties for the first five years.

The startup must be registered in the special section of the Companies Register and meet the requirements set out in Law Decree 179/2012, which are also verified by the Investor Visa for Italy Committee. As for immigration pathways, the investor visa requires a minimum investment of €250,000 in an innovative startup.