In 2025, JV activity in the Italian market and involving Italian entities has been shaped by geopolitical tensions and macroeconomic shifts.

Conflicts in Ukraine and the Middle East favoured partners and markets from stable jurisdictions.

Domestically, Italy’s inflation is stabilising (forecast 1.8% for 2025), and the European Central Bank’s (ECB’s) monetary easing lowers financing costs, supporting JV investment. However, current geopolitical risks and uncertainties over US tariffs led the ECB to pause further rate cuts in 2025.

US tariffs could impact export-focused JVs (eg, agriculture, pharmaceuticals, manufacturing), driving companies to diversify trade via new cross-border JVs.

Looking ahead to late 2025 and 2026, JV activity is expected to grow, particularly in sectors aligned with national priorities like the NRRP and “Made in Italy” initiative (eg, green energy, digital transformation, supply chain resilience).

Private equity’s “buy-and-build” strategies will continue to drive the consolidation of fragmented Italian SMEs through JVs. Given the current context of cross-border uncertainties, JV transactions are often seen as a softer way to approach a market and/or an industrial/commercial partner, helping investors to reduce risks and better understand the evolution of market dynamics, and potentially pave the way for subsequent rounds of acquisitions, especially for entities backed by PE investors.

Recent Italian JVs have focused on industrial manufacturing (including defence), the service industry (especially those supporting large multinational conglomerates) healthcare, and technology. These activities are driven by the NRRP and new EU/Italian regulations (eg, the EU AI Act), which are rapidly evolving.

Specifically, the EU AI Act (Regulation (EU) 2024/1689) adopts a risk-based approach, impacting compliance and liability. New liability regimes (revised Product Liability Directive, proposed AI Liability Directive) expand liability for AI system damages. This development requires dynamic JV agreements to allocate responsibility for ongoing liability and cybersecurity risks in line with NIS 2 Directive requirements. As a result, due diligence must place a specific emphasis on liability, data governance, and IP ownership.

Data sharing, localisation, and GDPR compliance are crucial, necessitating legally binding data sharing agreements (DSAs). Italian FDI law (Golden Power) grants the government special powers in strategic sectors, eg, 5G, (see 3.3. Sanctions, National Security and Foreign Investment Controls). This, together with the expanding impact of export control regulations, makes JVs with foreign partners geopolitically sensitive and highlights the need for explicit attention on data residency and supply chain sourcing.

Within Italian jurisdiction, there are two types of JV.

Contractual JVs

Contractual joint ventures are established through an agreement between the parties, defining roles, obligations, and project duration, without creating a separate legal entity. This structure reduces set-up costs and allows greater flexibility and control. It also facilitates easier exit if the project fails. However, each party remains fully liable for JV-related obligations, and the limited operational integration may reduce synergies and complicate resource allocation, including hiring dedicated personnel.

Corporate JVs

Corporate joint ventures involve the incorporation of a separate legal entity by the co-venturers to carry out a joint project. Ownership can be equally shared or majority-held. Governance is regulated by a shareholders’ agreement and reflected in the company’s bylaws, which are enforceable against third parties and remain valid even after the agreement expires.

The selection of the legal form to be used to incorporate a corporate JV depends on size, scope and objectives of the venture, as well as the desired level of control and liability among the co-venturers. The legal forms commonly used are:

• the limited liability company (società a responsabilità limitata ‒ s.r.l.), which is characterised by a more flexible structure with a minimum share capital of EUR10,000 (although it is also possible to incorporate limited liability companies with lower capital); and
• the joint stock company (società per azioni ‒ S.p.A.), which is a more rigid structure, requiring aminimum share capital of EUR50,000.

The corporate JV assumes liability towards third parties, provides a clear legal framework, and allows for pooling of resources, better access to financing, and issuance of equity or debt instruments.

However, incorporation involves higher set-up costs, reduced flexibility in governance changes or exit, and may lead to partial loss of direct control ‒ though this can be mitigated through tailored governance clauses in the shareholders’ agreement and bylaws.

Other Legal Structures

Network of enterprises (rete di imprese)

The network of enterprises requires a contractual agreement, established under Article 3 of Legislative Decree 5/2009, which regulates collaboration between two or more independent businesses on specific projects or initiatives, without the need to establish a separate legal entity. This structure allows companies to share resources, expertise and knowledge while maintaining their autonomy and market presence. Implementation requires the adoption of a network programme, which is executed by the network itself.

This type of structure it is often used when businesses are interested in monitoring and ensuring standards in the production process, leading to specific certifications (eg, “Made in Italy”).

Temporary association of enterprises (associazione temporanea di imprese)

The temporary association of enterprises is an aggregation of two or more companies formed to carry out a specific activity, with a duration limited to the time necessary for its completion. Each company participating in the association gives a collective mandate to one of them, the so-called group leader company, which acts on behalf of the association to achieve the common objective.

The primary purpose of these associations is to participate in public tenders and private contracts. Italian regulations do not provide a comprehensive framework governing them, but set forth sector-specific rules, notably in the context of public procurement projects.

The choice between a contractual and corporate JV hinges on several key factors:

• assess the financial needs of the project and the relevant forms of financing (equity, third-party financing, public grants, etc);
• determine whether the JV will operate under a limited or unlimited liability regime, depending on the risks involved; 
• establish the governance structure;
• review the competitive landscape to ensure the JV activities do not conflict with the partners’ existing businesses;
• clearly identify and agree upon the contributions (financial, operational, technical, etc) that each co-venturer will bring to the JV; and
• determine the nature and duration of the project ‒ contractual JVs are typically more suitable for short-term projects, whereas corporate JVs are preferred for long-term initiatives.

Moreover, it is crucial to analyse the potential tax implications of the JV to ensure efficiency and compliance with applicable tax laws. The primary consideration is the distinction between a contractual JV and a corporate JV, as their tax treatments differ significantly.

Corporate JVs (eg, S.p.A, S.r.l.) are treated as a separate legal entity for tax purposes and are subject to standard Italian corporate taxes.

• IRES (corporate income tax): the current rate is 24%, applied to the company’s profits.
• IRAP (regional tax on productive activities): a regional tax on net production value, with a standard rate of around 3.9%, which can vary by region.
• Dividends distributed by the JV to the co-venturers are subject to taxation at the shareholder level. For corporate shareholders in Italy, a significant portion of the dividend is generally exempt from IRES under the participation exemption regime. For foreign shareholders, tax treaties and EU directives may provide for reduced withholding tax rates.

In contractual JVs, the income pertaining to each JV member constitute its direct taxable income. This structure does not create the “double taxation” effect that can occur in a corporate JV (once at the company level and again on dividends).

Tax Incentives

Italy offers various tax incentives that can be relevant for JVs, especially those in specific sectors or engaged in R&D.

• R&D tax credits: JVs investing in research and development can benefit from tax credits.
• Patent box: this incentive provides a tax exemption on income derived from the use of certain intangible assets, such as patents and trade marks.
• Special economic zones (SEZs): JVs located in certain SEZs in southern Italy may be eligible for tax credits and other financial benefits.

Main Regulators

The key regulatory authorities are:

• the EU, which establishes the legal framework concerning specific sectors, such as, antitrust and anti-money laundering;
• the Italian Competition Authority, which possesses broad investigative powers in relation to competition within the national market;
• the Italian government, which holds veto power over transactions involving companies engaged in strategic activities or holding assets strategic to the national interest; 
• Consob, which regulates and supervises the orderly functioning and integrity of Italian financial markets;
• the Bank of Italy, which oversees regulation and supervision of financial intermediaries and ensures their compliance with applicable laws; and
• the Italian Tax Authority, which ensures tax compliance by overseeing the collection of tax revenues.

Main Statutory Provisions

Contractual JVs lack specific establishment regulations. The JV agreements, as civil law contracts, are regulated by the statutory provisions of the Italian Civil Code on obligations and contracts (Articles 1173 to 1986 of the Italian Civil Code).

For corporate JVs, the main statutory provisions are contained in the Italian Civil Code, Articles 2188 to 2642.

Additionally, depending on the specific industry in which the JV operates, the JV may be governed by specific regulations, such as those applicable to financial institutions, healthcare providers, tech companies and critical infrastructures.

AML legislation is mainly regulated by the Legislative Decree No 231/2007, which implements the relevant EU legislation and establishes measures to prevent money laundering and terrorism financing.

Key obligations provided by Legislative Decree No 231/2007 include:

• the appointment of an AML officer;
• the reporting of suspicious transactions to the financial intelligence unit (FIU); and
• the adoption of corporate policies to ensure compliance with the regulations and the adoption of internal control systems proportional to the company’s risk profile.

Moreover, the EU adopted a new AML package in June 2024. This package includes:

• Directive (EU) 2024/1640 (the “Sixth European AML Directive”), that introduces stricter due diligence requirements, enhanced beneficial ownership transparency, and more robust transaction monitoring;
• Regulation (EU) 2024/1624 (the “Single Rulebook”), aimed at harmonising the implementation of previous AML directives, reducing inconsistencies across member states’ national legislation; and
• Regulation (EU) 2024/1620 (the “AMLA Regulation”), establishing a new EU AML authority (AMLA) to oversee and co-ordinate anti-money laundering efforts across the EU.

The implementation of the AML package began in January 2025.

One of the key innovations introduced by the AMLA Regulations is the launch ‒ effective as of 1 July 2025 ‒ of the AMLA, which will have supervisory power over high-risk financial entities, authority to intervene in cases of malfunctions within national supervisory mechanisms, and responsibility for ensuring the enforcement of targeted financial sanctions.

Foreign Direct Investments and Golden Power Regulations

Italy’s “golden power” regime (Law Decree No 21/2012) grants the government power to block foreign direct investments and corporate transactions in strategic sectors like defence, national security, and high technology (fintech and insurtech). Foreign investors establishing JVs or investing in Italian companies within these sectors must consider applying under these regulations.

The intervention powers granted to the government are essentially as follows:

• opposition to the acquisition of shareholdings;
• veto on the adoption of corporate resolutions; and
• imposition of specific requirements and conditions.

At the EU level, Regulation (EU) No 2019/452, establishes a framework for screening FDIs across the EU. This Regulation complements the existing Italian legislative framework, and it mandates member states to report FDIs to the European Commission.

Foreign Subsidies Regulation

The Foreign Subsidies Regulation (Regulation (EU) 2022/2560) enables the European Commission to investigate and address foreign subsidies that distort competition within the EU, ensuring a level playing field. Acquisitions, mergers and JVs involving EU targets must be notified to the Commission if they meet specified criteria summarised below:

• EU-wide turnover: the target company or JV EU-wide turnover is equal to at least EUR500 million; and
• foreign financial contributions: the parties to the transaction must have received combined financial contributions from non-EU countries totalling at least EUR50 million in the past three years ‒ these contributions can include state guarantees, equity, loans, tax benefits, project grants or revenues from sales to state entities.

Italy in Support of Ukraine

In recent years, the EU has frequently imposed sanctions or restrictive measures both independently and in the implementation of binding resolutions of the United Nations Security Council.

In particular, in the current macroeconomic context, the sanctions packages enacted by the EU against Russia and Belarus implies the restriction of business activities with Russian and Belarus partners. The sanction package provides, amongst others, the prohibition of any transactions with a legal person, entity or body established outside the EU whose proprietary rights are directly or indirectly owned for more than 50% by an entity listed as sanctioned, this leading to extensive export control regulations, often requiring specific due diligence and legal assessment on supply/distribution transactions.

According to Law No 287/1990, establishing a JV ‒ whether through the incorporation of a new company or the acquisition ‒ can result in a concentration, triggering merger control scrutiny by the Italian Antitrust Authority (IAA).

In particular, a corporate JV can be considered a concentration if it operates as an independent economic entity. To determine if a JV qualifies as a “full-function” entity, the following factors should be assessed:

• whether the JV has sufficient resources to operate independently in the market, without excessive reliance on the parent companies;
• if the market relationship between the JV and the parent companies is substantial but limited to an initial start-up period, which should not exceed three years; and
• whether the JV is engaged in activities beyond a single function of the parent companies on a sustained basis.

The creation of a full- function JV requires prior notification to the IAA under the following circumstances:

• the aggregate turnover of the involved companies in Italy exceeds EUR567 million; and
• the aggregate turnover of at least two of the involved companies in Italy exceeds EUR35 million each.

Italian merger control rules transpose into national law the provisions of Council Regulation (EC) No 139/2004. Therefore, they should be interpreted in conjunction with the principles established by the European Commission and EU courts.

Even if a JV does not trigger a merger review, it should still be assessed under the rules concerning anti-competitive agreements.

Although Italian law does not explicitly regulate listed companies participating in JVs, the general rules applicable to listed companies still apply to such entities, including the rules on market abuse (preventing insider trading by requiring disclosure of price-sensitive information), and, in general, financial information disclosure.

Consequently, with reference to statutory information obligations, listed parties participating in JVs are obliged to disclose relevant information to the public and to Consob to ensure transparency for investors and for the market.

Italian legislation sets forth disclosure requirements related to the ultimate beneficial owner (UBO).

Under Italian Laws, the UBO of a company is the individual(s) that:

• directly holds more than 25% of the company’s corporate capital; or
• indirectly own more than 25% of the company’s corporate capital through controlled companies, fiduciary companies, or by an intermediary.

If the ownership structure does not clearly allow the identification of the individual with direct or indirect ownership, the UBO is identified as the individual(s) holding the majority of voting rights at shareholders’ meetings or exercising dominant influence over the company through contractual agreements or other mechanisms. Should all reasonable efforts to identify the UBO prove unsuccessful, the legal representative of the company will be considered the UBO.

The Inter Ministerial Decree No 55 of 11 March 2022 provides the establishment of the register of beneficial owners (the “UBO Register”) in Italy. According to this Decree, the information relating to the UBOs shall be communicated to the Companies Register Office of the territorially competent Chamber of Commerce by the legal representative of the company, exclusively online. Currently, such obligation has been suspended while a preliminary ruling is pending before the CJEU on the matter.

Significant Recent Decisions

The Italian Court of Cassation’s recent ruling (Judgment No 11964/2025) provides clarification on applicable corporate law for cross-border EU companies. In a dispute involving a Luxembourg-based firm with key assets in Italy, the Court overturned an earlier decision that applied Italian law, affirming instead that EU freedom of establishment requires respecting the law of the company’s country of incorporation. The ruling underscores that Italian courts must apply foreign corporate law and can independently ascertain it. This decision strengthens legal certainty and uniformity for cross-border business operations within the EU.

Moreover, the local court of Trieste (Decision No 241/2024) ruled that drag-along clauses can be added to company bylaws by simple majority, not unanimity, if: all shares are transferred concurrently; shareholders receive at least statutory fair value; and all shareholders are treated equally.

Regulatory Developments

Law No 21/2024, which introduces measures to enhance capital market competitiveness, includes a provision that allows small and medium-sized S.r.l.s. to issue standardised quotas in book-entry form, voluntarily adopting the dematerialisation regime. For SMEs choosing to dematerialise their quotas, the obligation to maintain a quotaholder register ‒ typically not required for S.r.l.s. ‒ would be reintroduced.

Establishing a JV requires a structured and multi-stage process. To guide discussions, the co-venturers typically focus on the definition of the following preliminary documents:

• mutual non-disclosure agreement, protecting the confidentiality of the information shared between the co-venturers during negotiations;
• letter of intent, term sheet, head terms or memorandum of understanding (in most cases non-legally binding), setting forth the essential commercial and legal terms the co-venturers have agreed upon during the preliminary negotiations; and
• exclusivity agreement, preventing either co-venturers from engaging in parallel negotiations with other potential partners or buyers for a definite period of time, usually aligning with the negotiation timeline (the exclusivity agreement may be included as a specific clause within one of the primary documents referenced above).

Market Standard Provisions

At the pre-JV agreement stage, it is common for co-venturers to agree on certain key provisions. These typically include the non-binding nature of early-stage documents, a clear definition of the JV’s structure, scope, and the role of each party, required due diligence, necessary regulatory approvals, as well as any bridge financing to support the initial phase of the project. The parties often agree to a binding mutual exclusivity to prevent parallel negotiations with third parties and include confidentiality clauses to protect shared sensitive information. Governing law and jurisdiction are also usually specified early on to avoid future disputes over applicable law or forum.

Moreover, when a corporate JV is established through investment in an existing entity or contribution of businesses or assets of the co-venturers in the JV entity, a full due diligence on the target/assets to be contributed may be carried out before proceeding with the signing of the final agreements.

A corporate JV must be registered with the Business Register within 30 days of incorporation, typically on the closing date. Key JV information (name, statute, legal seat, corporate capital, identities of co-venturers and legal representatives) must be submitted and remain publicly available. Registration grants the corporate JV legal personality, allowing it to hold rights and obligations.

No additional disclosure requirements are applicable to JVs under Italian law, unless filings are specifically burdened under FDI regulations (see 3.3 Sanctions, National Security and Foreign Investment Controls), antitrust legislation (see 3.4 Competition Law and Antitrust), listed company regulations (see 3.5 Listed Companies and Market Disclosure Rules) or required under other sector-specific regulations.

For listed companies, a detailed preliminary JV agreement, even if subject to conditions, is typically considered price-sensitive and requires informing authorities and the market.

Conditions Precedent

In Italy, JV agreements commonly include conditions precedent (CPs) that must be satisfied or waived before closing. These are tailored to the specific JV and may include:

• regulatory approvals: mandatory clearances (eg, antitrust or FDI notifications that are generally outside the parties’ control;
• third-party consents: required under bylaws, shareholder agreements, or key contracts with third parties (eg, lenders or suppliers) in the case of ownership changes; and
• contractual conditions: negotiated provisions addressing deal-specific risks, such as successful due diligence or absence of a material adverse change (MAC).

If a CP is not met, the contract does not become effective and the benefiting party cannot claim damages. Under Italian laws, parties must still act in good faith in the timeframe leading to CP satisfaction, to avoid pre-contractual liability.

Material Adverse Change and Force Majeure

MAC clauses, increasingly present in Italian JV agreements, aimed at allocating the risk of unforeseen events occurring between signing and closing that could significantly harm the commercial viability of the transaction.

MAC clauses are typically triggered by adverse changes in the project’s business, financials, or operations and often operate as a condition precedent to the execution of the project. In the current global scenario, in cross-border JV agreements, MAC clauses may include reference to specific provisions related to potential negative impact of tariffs, wars/embargos or other force majeure events, which operate not only between signing and closing, but also during the lifetime of the JV, to grant partners for flexibility to adjust the terms of the transactions occurring these specific circumstances.

To be enforceable, MAC clauses must rely on objective and verifiable criteria, such as financial thresholds or defined triggering events, and avoid vague, discretionary language. Italian law (Article 1355 c.c.) considers void any condition precedent solely dependent on one party’s discretion.

The JV agreement constitutes the fundamental legal instrument governing the establishment and operation of the JV.

Contractual JV

A contractual JV is established upon the signing of a JV agreement, setting forth the JV’s objectives and the respective rights and obligations of the co-venturers.

Corporate JV

Upon signing the JV agreement and on the closing date, the co-venturers, assuming any relevant conditions precedent have been satisfied, should incorporate the JV. To this end the following activities may be required:

• the holding of a meeting before a notary public to adopt several corporate resolutions, including the adoption of the bylaws and the appointment of the management body;
• the execution of any agreed-upon capital contributions to the JV vehicle, noting that the minimum capital varies depending on the selected company form: (i) S.r.l.: EUR10,000 (or as low as EUR1 for simplified S.r.l.); (ii) S.p.A: EUR50,000;
• within 30 days of incorporation, the registration of the company with the competent Business Register (see 5.2 Disclosure Obligations); and
• depending on the nature of the business and the industries involved, the obtention of any licence and authorisation necessary to carry out the business.

There are generally no restrictions on foreign entities participating in JVs, provided that reciprocity requirements are met. However, specific sectors may require compliance with additional regulations or approvals.

Once established, the JV can begin operations according to the agreed business plan, while ensuring compliance with applicable laws and regulations.

Contractual JV

As outlined in 2.1 Typical JV Structures and 5.4 Legal Formation and Capital Requirements, the terms of a contractual JV are documented within the JV agreement entered into between the co-venturers, which typically regulates:

• co-venturer identification;
• scope and roles (clarifying no partnership intent);
• contribution obligations (financial, resources, tech, personnel);
• decision-making procedures;
• profit allocation;
• IP licensing for JV development;
• co-venturer liabilities (inter-se and third-party);
• termination and consequences; and
• applicable law and venue for disputes.

Corporate JV

As described in 2.1 Typical JV Structures and 5.4 Legal Formation and Capital Requirements, the essential terms of a corporate JV are documented within the JV agreement entered into between the co-venturers, which usually includes as annexes:

• a shareholder agreement;
• the draft of the company’s by-laws (reflecting, to the maximum extent permitted by the law, the provisions of the shareholders’ agreement); and
• any potential commercial agreement to be entered into between the JV and the co-venturers (eg, manufacturing agreements, supply and distribution agreements and management service agreements).

The JV agreement usually regulates the essential terms of the transaction, including, mutatis mutandis, provisions equal to those set out in the contractual JV agreement.

The shareholders’ agreement and the JV’s by-laws usually regulate all the rights and obligations of each co-venturer as shareholder of the JV, and specifically:

• procedures for securing additional funding and each shareholder’s obligation or right to contribute;
• governance structure;
• each co-venturer’s rights relating to the management of the company, including appointment rights and attribution of powers;
• the decision-making procedures and voting thresholds for major decisions;
• deadlocks and dispute resolution mechanism(s);
• rules on transfer of shares, including limitations on transfer, right of first refusal, drag-along and tag-along mechanism;
• exit strategy;
• discipline on distribution of dividends;
• control rights; and
• regulation on the winding-up and liquidation of the JV.

The Italian regulatory framework (including, for instance, the possibility to issue special classes of shares, grant specific rights to each co-venturer, and allocate profits) offers great variety and flexibility in structuring by-laws tailored to the needs of the project.

Contractual JV

Contractual JV decisions are typically made by mutual agreement. The JV agreement may permit independent activities by one co-venturer, provided regular reports are shared for transparent progress tracking.

Corporate JV

Corporate JVs typically involve two levels of decision-making: shareholders and the administrative body. Shareholders, as investors, make key decisions affecting their position via meetings, regardless of the JV’s company form.

In particular, the shareholders, while not having a managerial role, may resolve certain approval rights over the following decisions:

• the approval of the financial statements and distribution of profits;
• the appointment of directors and the determination of their consideration;
• the appointment of statutory auditors and the determination of their consideration;
• amendments to the bylaws, including decisions to substantially amend the corporate purpose and introduction or amendment of special rights (ie, diritti particolari) or class of shares (ie, categorie di quote/azioni) granted to specific shareholders;
• authorisation to proceed with the purchase by the JV, for consideration equal to or greater than one-tenth of the share capital, of assets or receivables from co-venturers or directors within two years of the company’s incorporation, (so-called hazardous purchases, ie, acquisti pericolosi);
• waiver or settlement of liability claims brought against directors (which, requires the “consent” of a majority of shareholders representing two-thirds of the share capital); and
• reduction of share capital due to losses.

Resolutions generally pass with a majority shareholder vote. However, bylaws/JV agreements can require higher quorums or grant minority shareholders veto power for certain matters. Voting rights can also be allocated disproportionately.

The administrative body exclusively manages the JV’s business. The shareholders’ meeting can appoint a sole director or a board of directors.

In the case of appointment of a board of directors, as detailed in 7.2 Duties and Functions of JV Boards and Directors, the decisions are usually taken by majority vote and every director has one vote. The JV’s bylaws may provide that a decision on specific relevant matters will be adopted with:

• unanimity of consent;
• an enhanced quorum; or
• the favourable vote of at least one director appointed by the minority shareholder (so called veto power).

In the event of a tie within the board of directors, the chairperson or another member may be granted the right to cast a deciding vote (commonly known as a “casting vote”).

JVs can be financed via equity (shareholder contributions, typically cash, or non-cash with valuation reports confirming the values of the in-kind contributions made by the members) or debt (loans from financial institutions, lenders, or shareholders).

Shareholder loans under Italian law are typically subordinated and, in certain circumstances, their repayment may be subject to claw-back actions. Depending on the JV’s structure, bonds or other debt instruments may also be issued.

Italian laws allow issuance of special classes of shares or the attribution of specific rights to members (as the case may be) with rights which are not proportionate to the contributions made by the members (eg, shares with limited voting rights), so that it is possible for the funding member to provide capital without altering the ownership and voting structure of the company.

As referred to in 6.1 Drafting and Structure of the Agreement, the JV agreement usually sets out specific mechanisms to resolve deadlock situations, which can be generally classified into three different categories.

Deadlock resolution can involve:

• negotiation clauses, such as granting a casting vote or appointing an independent arbitrator;
• buy-sell provisions, facilitating share transfer and leading to a co-venturer’s exit. Common buy-sell options include:
1. Russian roulette clauses: one co-venturer proposes a price, the other can accept or counter with the same offer;
2. Texas shootout clauses: co-venturers submit offers to an independent expert, the highest offer buys shares; and
3. put/call options: one co-venturer is obliged to sell or buy shares at a set price.

To manage the commercial and operational aspects of the JV, in addition to the JV agreement, one or more of the following ancillary agreements may be executed, depending on the company’s activity:

• shareholders’ agreements;
• directorship agreements or employment agreements;
• intellectual property assignments or licence agreements;
• asset transfer agreements;
• manufacturing agreements;
• supply and distribution agreements or agency agreements;
• management service agreements or service level agreements;
• real estate lease agreements; and
• loan agreements with shareholders or third parties.

Usually, a draft of these agreements, agreed upon by the co-venturers, is attached as an annex to the executed version of the JV agreement.

The rights and duties of co-venturers are primarily defined in the JV agreement and typically include the following.

• Profit and loss allocation rules: by default, profits and losses are shared in proportion to each party’s contribution. Any agreement that entirely excludes a party from both profits and losses (pactum leoninum) is null and void. Co-venturers are free to deviate from the default rule, provided each has some share in both profits and losses.
• Governance and decision-making: this covers each co-venturer’s rights on the governance of the company and on decision-making processes.
• Information rights: this refers to the rights attributed to each co-venturer to access information about the JV’s activities, financials, and management. For the information rights attributed by Italian law to the parties of a corporate JV, see 6.7 Minority Protection and Control Rights.
• Non-competition clauses: restrictions on co-venturers from competing with the JV’s business and/or with each other’s business for a specified period or within a defined geographical area.

Liability for Debts and Obligations

The liability of the JV participants depends on whether they have formed a corporate JV or a contractual JV.

For corporate JVs, the company itself is liable for its debts and obligations. The co-venturers have limited liability, meaning their liability is capped at the value of their subscribed capital.

For contractual JVs, the co-venturers are liable for the obligations pertaining to the activities they perform, with joint and several liability. This can be contractually structured to facilitate relations with third parties demanding, allowing them to secure fulfilment of the obligations by all JV partners jointly.

Minority partners in a JV, especially in an international context, can secure various control rights to monitor and protect their investment.

• Veto rights, preventing the majority from making significant changes without the minority’s consent: these rights are usually enshrined in the JV’s bylaws and/or the JV agreement and apply to a predefined list of “reserved matters,” such as amending the bylaws, issuing new shares or altering share capital, approving the business plan, appointing or removing directors, and winding up the JV.
• Information rights: S.r.l. non-managing shareholders have broad information and document examination rights, while S.p.A. shareholders have more limited inspection rights. JV agreements can enhance minority oversight with provisions for comprehensive reports and observer status at board meetings.
• Tag-along rights: this right allows the minority member of a corporate JV to “tag along” on the sale and sell their shares at the same price and on the same terms as the majority, preventing them from being left behind with a new, potentially undesirable partner.
• Exit rights: the JV agreement could also include clear provisions for a minority partner’s exit, such as put options, which allow the minority to sell their shares to the majority at a predetermined price or valuation in specific circumstances. These rights provide an escape mechanism if the JV fails to meet its goals or if a dispute arises.

Under Italian law, all of the above rights can be implemented through the issuance of special class of shares or through the attribution of special rights to the minority member (as the case may be, depending on the JV corporate form), fully enforceable against third parties.

Applicable Law

In the context of international JVs involving Italian parties, assets, or operations, the selection of governing law and dispute resolution mechanisms is a key aspect of the negotiation process. These choices can have a significant impact on the enforceability of rights, the predictability of outcomes, and the overall stability of the JV arrangement.

It is advisable for JV parties to explicitly choose both a substantive law (which governs the content and interpretation of the agreement) and a procedural law (which applies to the resolution of disputes).

While Italian law may be selected where the JV operates primarily in Italy or touches upon regulated sectors (such as energy, defence, or strategic infrastructure), international JV partners often opt for neutral third-country law. The decision is usually influenced by the location of assets, the domicile of the parties and the territories where the JV performs its main activity. If the JV agreement provides for the incorporation of a foreign entity, it is necessary to ensure consistency and co-ordination between the applicable law chosen by the parties in the JV agreement and the statutory laws governing the JV entity.

Dispute Resolution

When it comes to the choice of forum, Italian courts are rarely selected in cross-border JVs. Most JV agreements involving foreign parties prefer arbitration procedures, typically administered under the rules of institutions such as the ICC, LCIA, or the Milan Chamber of Arbitration.

The absence of a clear agreement on the applicable procedural law or jurisdiction can lead to significant uncertainty. In such cases, courts will apply conflict-of-law rules – for instance, those under the Rome I Regulation (Regulation (EC) No 593/2008) on the law applicable to contractual obligations, or the Brussels I bis Regulation (Regulation (EU) No 1215/2012) on jurisdiction and the recognition and enforcement of judgments within the EU. This can lead to delays, parallel proceedings, and higher enforcement risks, particularly if the JV operates across multiple jurisdictions.

Although Italy does not impose mandatory alternative dispute resolution (ADR) procedures for JV agreements in general, ADR mechanisms (such as mediation, negotiation, or expert determination) are often included contractually. These are especially common in long-term, operational JVs where the preservation of the business relationship is important. In regulated sectors, specific administrative or regulatory conciliation procedures may apply before formal dispute resolution can be initiated.

Italy is also a party to major international instruments governing dispute resolution, including:

• the Washington Convention (ICSID), ratified by Law No 109/1970, which allows for the resolution of disputes between foreign investors and member states through international arbitration;
• the New York Convention, ratified by Law No 62/1968, which obliges contracting states to recognise and enforce arbitral awards rendered in other signatory countries; and
• the European Convention on International Commercial Arbitration, ratified by Law No 418/1870, which governs commercial arbitration between parties from different countries.

The board of directors is typically appointed by the shareholders’ meeting through a majority resolution, except for the first directors, who are appointed in the deed of incorporation.

The company’s bylaws can grant each co-venturer the right to appoint one or more directors and may also regulate the appointment of key roles such as the chairperson, vice-chairperson, or managing directors. The bylaws also establish the minimum and maximum number of directors and the duration of their office, which may not exceed three financial years for S.p.A.s.

Directorships are typically held by individuals, but under Italian law, legal entities may also be appointed (though they must designate a permanent representative). There are no nationality or residency restrictions for directors, so foreign individuals can be appointed without limitation, subject to any sector-specific rules and reciprocity criteria being met.

To ensure board control or deadlock resolution, it is common to:

• allocate casting votes to one or more directors on specific matters; and/or
• negotiate voting rights and quorum rules to reflect the JV parties’ commercial balance.

Re-election is permitted unless expressly excluded by the bylaws. Directors may also be removed by shareholder resolution; however, removal without just cause entitles the director to compensation for damages.

The primary duty of the board of directors and its members is to manage the company and to carry out any activities necessary to fulfil the corporate purpose. Specifically, the board of directors is responsible for providing the company with an adequate organisational and accounting structure (also aimed at promptly detecting any signs of insolvency), make strategic decisions, approve the business plan and budgets, and oversee their implementation.

The board of directors may delegate its functions to executive directors or executive subcommittees, which will have the authority and responsibility to manage the company within the scope of the powers granted to them, and to ensure that the organisational, administrative, and accounting structures are appropriate for the nature and size of the business.

The following duties and powers cannot be delegated by the board:

• issuance of convertible bonds and capital increases;
• preparation of the draft annual financial statements;
• actions to be taken in the event of losses eroding the share capital; and
• preparation of merger and demerger plans.

Directors are bound to execute their office in the company’s best interest, and to safeguard the company’s assets. Therefore, in the case of a conflict of interest between the company's interests and the interests of the co-venturer appointing them, the directors have to act for the exclusive benefit of the company, as better detailed in 7.3 Conflicts of Interest.

In addition, the directorship agreements between the JV and the director typically include non-compete clauses designed to prevent the director from engaging in competition with the company. Under Italian law, non-compete clauses shall be limited in terms of scope, timing and territory.

Under Italian law, co-venturers are allowed to appoint directors to the JV. However, notwithstanding their appointment by a specific co-venturer, the directors must act in the best interests of the JV.

The Italian Civil Code distinguishes between the regulation of conflicts of interest in S.p.As. and S.r.l.s.

• S.p.A.: directors are required by law to disclose any personal or third-party interests in company transactions to the board of directors and auditors. If a director with such an interest is also a managing director, they must abstain from the transaction and delegate it to the board. If they are the sole director, they must inform the next shareholders’ meeting. Decisions must be justified based on the company’s best interests.
• S.r.l.: even though a prior information obligation is not required by law, contracts entered into by directors in conflict of interest and third parties may be voided at the company’s request if the third party was aware of the conflict.
• S.p.A. and S.r.l.: board resolutions taken with the deciding vote of a director in conflict of interest, resulting in financial harm to the company, may be challenged within 90 days by the other directors or by the statutory auditors (if appointed).

Critical IP issues, such as IP ownership, licensing and protection, should be addressed between the co-venturers before establishing a JV.

Contractual JV

The JV agreement or its ancillary agreements may regulate the terms and conditions of:

• the licensing between the co-venturers of their respective IP rights needed to develop the JV’s scope (including trade names, trade marks, technology, patents, know how, trade secrets and list of clients);
• the attribution of ownership of the IP jointly developed by the co-venturers;
• the confidentiality undertakings mutually assumed by the co-venturers; and
• the consequences of the JV termination on IP rights.

Moreover, to protect their respective IP rights, each co-venturer typically agrees to co-operate with the other in preventing IP infringement. This may involve taking legal action against third parties who infringe on the JV’s IP rights or the IP rights of individual co-venturers.

Corporate JV

In the case of corporate JVs, the co-venturers may consider and regulate within the JV agreement or the ancillary agreements the following issues:

• definition of the JV name and execution of any licence of use for company names or trade marks needed for this purpose;
• decision on the transfer or licensing of IP rights owned by the co-venturers to the JV;
• rules governing the attribution of the ownership of the new IP developed by the JV;
• consequences of the liquidation or winding up of the JV on the IP rights and licences (if applicable); and
• procedures and rules to prevent IP rights infringement and possible strategies for resolving disputes related to IP rights.

Licence agreements typically include the several key provisions, essential for defining the terms of the relationship between the licensor and licensee:

• royalty clauses, specifying the financial arrangements regarding payments for the use of the intellectual property;
• exclusivity provisions, addressing whether the licensee holds exclusive rights to use the licensed IP rights;
• territorial perimeter, specifying the area in which the licensee could use the IP rights;
• sublicensing rights; and
• duration clauses, outlining the term of the licence.

Transfer of IP

The transfer of IP to or from foreign entities must comply with applicable EU and national regulations, including those on export controls, data protection, foreign direct investments and golden power regulations (see 3.3 Sanctions, National Security and Foreign Investment Controls and 3.4 Competition Law and Antitrust). Additionally, cross-border transfers may trigger tax implications, such as transfer pricing rules, which require transactions to be at arm’s length.

In view of the JV’s objectives, the co-venturers should consider whether to assign or to license the use of the IP rights to the JV.

The assignment to the JV of the IP rights that may be executed through capital contribution or sale implies that the JV finally acquires the full ownership of the IP and the right to use it without any limitation. Therefore, following the assignment, the assigning co-venturer relinquishes any control over the IP rights and no longer benefits from any future profits derived from the assigned IP.

On the other hand, the IP rights licence allows the co-venturer to retain ownership and control over the IP rights and to detail the terms and conditions that govern the other party’s use of those rights. Furthermore, the IP licence provides the licensor with the right to receive compensation in the form of royalties or other fees for the JV’s exploitation of the licensed IP.

The licensor also has the ability to regain full ownership of these rights upon the termination of the JV agreement or in the event of a breach by the JV of the terms outlined in the licence agreement.

Thus, licensing the existing IP is often the most effective solution, subject to any relevant tax implications (for instance, transfer pricing rules on royalties in the case of an international JV).

The concept of ESG is important because it provides a framework for assessing the sustainability and ethical impact of business, beyond economic profits. This approach has gained importance with the growing awareness that companies’ evaluation should also be based on their ESG impact.

Given the growing regulatory landscape on this topic, the co-venturer may conduct in-depth due diligence before establishing a JV to identify potential risks and opportunities in the light of applicable laws and to develop a detailed ESG strategy. Governance structures can also be adapted to support effective ESG implementation. By embedding ESG principles directly into the JV agreement, co-venturers may formalise their commitment to sustainability and take a proactive approach to risk management.

Main ESG Regulations

Italy, as an EU member state, has adopted an extensive regulatory framework on ESG matters, based essentially on EU legislation. 

Legislative Decree No 125/2024 implemented into Italian legislation the Corporate Sustainability Reporting Directive (CSRD), introduced by the EU, which strengthens the requirements for sustainability reporting. This Regulation requires an increasing number of companies to adopt a specific sustainability reporting, improving transparency and information on risks and corporate reliability. Specifically, starting from the financial year 2024, the CSRD Regulation requires larger companies to publish a sustainability report in accordance with the European Sustainability Reporting Standards (ESRS).

Moreover, the Corporate Sustainability Due Diligence Directive (CS3D), approved in December 2023 and to be implemented by member states by July 2026, broadens the sustainable governance obligations imposed on companies. It requires a review of internal policies, including those related to the supply chain, as well as policies addressing human rights and environmental rights.

In addition, under Italian law, companies pursuing objectives beyond the traditional goal of profit maximisation, including social and environmental objectives, may be recognised as “benefit companies”. This designation can have a positive impact by attracting investors and clients committed to social and environmental issues.

JVs can have either a fixed or indefinite duration. Contractual JVs, often established for specific projects, have a defined duration set out in the JV agreement. Corporate JVs are often created for a longer duration and their bylaws generally include provisions for withdrawal or exit procedures that co-venturers can activate under specific conditions.

Despite the agreed-upon duration, the JV agreement may allow for early termination under specific circumstances, such as:

• material breach by the other co-venturer of certain provisions of the JV agreement or of the ancillary agreements;
• unsolved deadlock events;
• mutual consent by the co-venturers; and
• change of control of a co-venturer.

In the case of a corporate JV, if the parties mutually decide to liquidate the company, the board of directors shall convene a shareholders’ meeting to resolve on the appointment of the liquidators, conferring any power deemed appropriate, and on the criteria for conducting the liquidation procedure. The liquidators will then carry out the necessary steps to liquidate the company’s assets, pay off creditors, and distribute any remaining assets among shareholders proportionally to their membership interest. After all assets have been liquidated and liabilities settled, the liquidators will call a final shareholders’ meeting to present the liquidation report and seek approval for the conclusion of the liquidation process.

Upon approval of the liquidation report, the liquidators will file for the formal dissolution of the company with the Companies Register, officially marking the end of the corporate entity.

Regardless of the duration of the JV, it is crucial to regulate in detail within the JV agreements the effects of termination, also for the purposes of minimising potential disputes between the co-venturers. Specifically, among others, the JV agreement should regulate:

• the respective rights and liabilities of the co-venturers upon termination;
• to the extent possible, the assignment of the assets owned by the JV;
• the impact of the JV termination on the commercial agreements in place;
• any provisions of the JV agreement that remain in effect after termination (usually confidentiality clauses);
• the allocation of key-employees, if the co-venturers desire to re-hire part of the work-force; and
• the allocation of relevant IP rights developed by the JV.

Alternatively, the co-venturers may also agree on a global exit by transferring all of their interests in the JV to a third party.

Under Italian laws, co-venturers can freely transfer their own assets to each other without involving the JV. However, if the transfer involves assets licensed to or held by the JV, the JV’s interests may be affected.

Therefore, prior to any asset transfer, the transferring co-venturer should conduct a comprehensive review of all relevant agreements with the JV, considering that these agreements may include provisions regarding the transferability of assets and the potential need for the JV’s consent.

In addition, the transfer agreement may also specify how existing agreements between the JV and the transferor will be affected by the transfer, and, potentially, regulate the transfer of these agreements to the transferee.

Transfers of assets from the co-ventures and the JV, if made within 24 months of its incorporation, are subject to approval from the shareholders’ meeting and require a sworn appraisal certifying the value of the assets. In any event, in the transfer of assets involving the co-venturers and the JV, it is often advisable to prepare an appraisal to certify the fair value of the sale.

If the JV transfers assets to a co-venturer, potential conflicts of interest may arise, regardless of whether the assets were initially contributed by the co-venturers or developed by the JV. To mitigate these risks, it is essential to establish a fair market value for the assets, ideally supported by an independent auditor’s valuation (as mentioned above). Additionally, if the purchasing co-venturer is also a legal representative of the JV, the transaction may be considered self-dealing. In such cases, the conflict-of-interest procedures outlined in 7.3 Conflicts of Interest should be followed.

As specified in 9.1 Termination of a JV, in the event of termination of the JV, the assets owned by the company (whether originally contributed to the company by the co-venturers or originating from the JV itself) will be liquidated to pay off the creditors (if any). Any remaining assets will be then distributed among shareholders in proportion to their membership interest in the JV.

Therefore, the transfer of JV assets does not only need to take into account the decisions of the co-venturers, but also the interests of the company’s creditors, who may ultimately have claims over those assets, in the event the JV faces financial distress.

Italian law does not impose specific statutory rules on JV exits, but provisions under the Italian Civil Code set the framework within which share transfers must operate.

In S.p.A.s, shareholders may freely transfer their shares unless the bylaws provide otherwise; however, absolute transfer bans are not valid, except for limited timeframes (not exceeding five years) and in so far there are not discretionary. Buy-back clauses are also allowed, though they are subject to strict statutory limits.

In S.r.l.s, transfer restrictions and exit mechanisms can be structured more freely and are commonly embedded in the articles of association. Italian law permits statutory withdrawal by a member in certain cases (eg, transfer restrictions exceeding two years, changes to the corporate purpose, merger, or extension of duration), and contractual withdrawal rights can also be included in the JV agreement.

Overall, exit strategies are primarily subject to negotiation, allowing parties to tailor provisions in the JV agreement to meet commercial objectives. The most common exit clauses typically include one or more of the following:

• rights of first refusal;
• tag-along and drag-along rights;
• put and call options;
• deadlock resolution mechanisms leading to exit (eg, Texas or Russian roulette clauses); and
• IPO exit or third-party global sale procedures.

To ensure enforceability, it is essential that exit clauses are clearly defined, proportionate, and properly reflected in the by-laws and/or in the shareholders’ agreement. Furthermore, under Italian laws, if exit clauses force a member to transfer its shareholding upon occurrence of a certain event (eg, in the case of call options, drag-along), the exiting member must be granted fair and equitable consideration for the transfer.