Asset Deal or Share Deal
There are three ways to acquire an Italian hotel, and the choice between them is the single most consequential decision in the transaction. It determines what you inherit, what taxes apply, how deep your due diligence must go, and what happens to the people who work there.
By the team at KW Hospitality · Updated
Route one — the real estate alone
You buy the building. The operating business does not come with it: staff, licences, contracts and forward bookings stay with the seller or cease.
Suits a buyer intending to reposition the property, install their own operator, or convert its use. Carries the least inherited liability, because you take no operating history. Requires that you can actually obtain the licences to trade — which is a question about the building and the municipality, and one to answer before you buy rather than after.
Route two — the going concern (cessione d'azienda)
You buy the business as a functioning whole: goodwill, equipment, supplier and distribution contracts, forward bookings, and the employment relationships. The transfer is executed by notarial deed and registered.
Suits a buyer who wants a trading hotel to continue trading. Carries two specific consequences that foreign buyers frequently underestimate. Employees are protected on a transfer of undertaking: employment relationships continue and accrued entitlements follow. And the buyer can be exposed to certain of the business's existing debts, notably in respect of tax and employment, within limits and subject to procedures designed to establish and cap that exposure. Those procedures exist precisely so that the position can be established in advance, and they should be used.
Requires verification that the licences under which the hotel trades can follow the business. This depends on the licence type and on regional and municipal rules, and cannot be assumed.
Route three — the company (cessione di quote)
You buy the corporate entity. The hotel does not move; ownership of the company that holds it does. Nothing changes at the level of the property or the business, which is precisely the attraction — licences, contracts and staff are undisturbed because there has been no transfer of them.
Suits larger transactions, and situations where continuity of licences is critical or where transferring them would be difficult. Carries the whole company: its tax history, its litigation, its guarantees, its employment history and anything else it has done since incorporation, whether or not either party knows about it. Requires the deepest due diligence of the three routes, and normally a set of contractual warranties and indemnities with security behind them.
Choosing between them
| Consideration | Real estate | Going concern | Company |
|---|---|---|---|
| Inherited liabilities | Lowest | Defined, and capable of being established in advance | Highest — the company's full history |
| Continuity of licences | Must be obtained afresh | Depends on licence and local rules | Undisturbed |
| Employees | Do not transfer | Protected and transfer | Unaffected — employer unchanged |
| Due diligence depth | Property and planning | Property, business, employment | All of the above plus full corporate |
| Typical use | Repositioning, conversion | Continuing an operating hotel | Larger assets, licence-sensitive cases |
Holding structure
Separately from what you buy is the question of what buys it: you personally, an Italian company, or a foreign entity. The answer depends on your tax residence, your objectives for the asset, whether you intend to operate it, and your succession planning. It is a question for your own tax adviser in your own jurisdiction as much as in Italy, and it should be settled before an offer, because changing it afterwards can be costly.
A common Italian arrangement separates ownership of the property from operation of the business, with the property-owning entity granting a business lease to an operating entity. Whether this suits you depends on your objectives, and it is one of the first things worth discussing.
Talk to us about an acquisition in Italy
Write to us with what you are considering. We reply in English, and we will tell you honestly when we think Italy — or a particular market — does not fit the brief.
Contact our teamConfidential portfolioFrequently asked questions
What is the difference between an asset deal and a share deal in Italy?
An asset deal transfers the property, or the business as a going concern, from seller to buyer. A share deal transfers ownership of the company that already holds them, leaving the property, licences, contracts and staff undisturbed. The routes differ in tax treatment, in inherited liability and in the depth of due diligence required.
Do employees transfer when I buy a hotel business in Italy?
On a transfer of a going concern, Italian law protects existing employment relationships and accrued entitlements, and they continue with the buyer. Where only the real estate is transferred they do not. On a share deal the employer does not change, so the question does not arise.
Can I inherit the seller's debts?
On a transfer of a going concern a buyer can be exposed to certain existing debts of the business, particularly tax and employment liabilities, within limits and subject to procedures designed to establish and cap that exposure. On a share deal the company retains all its liabilities and they come with it. Both situations are manageable, but only if addressed in advance.
Should I set up an Italian company to buy?
It depends on your tax residence, your objectives and your succession planning, and it should be decided with advisers in your own jurisdiction as well as in Italy. What matters practically is settling it before you make an offer, because restructuring afterwards can be expensive.
Will the hotel's licences transfer to me?
On a share deal they are undisturbed because the licence holder does not change. On a going-concern transfer it depends on the licence type and on regional and municipal rules. On a purchase of the real estate alone, licences must generally be obtained afresh. This must be verified for the specific property before committing.