Two of those held were the Italians owners of the building, located in the textile town of Prato, just north of Florence.
Also held were three Chinese - two sisters and one of their husbands - who ran the factory, and were inside when the blaze struck, managing to escape while others were trapped by security bars across the windows.
All face charges of multiple manslaughter and exploiting illegal labour.
Eleven workers had been living and sleeping in close quarters on makeshift beds when the fire broke out.
"There are violations so serious and dangerous that it's not a question of asking what laws have been broken, but which ones were respected," prosecutor Piero Tony wrote in the arrest warrant, according to Italian media reports.
Police sequestered a second factory belonging to Giacomo and Massimo Pellegrini, worth €200,000.
Tony said the workers "laboured 14 to 16 hours a day, during the night as well, without any days off," and slept on "wooden and plasterboard mezzanines, without the minimum in terms of fire prevention or alarm systems."
Prato is officially home to about 17,000 Chinese nationals, according to official data from 2010, but local sources say the real figure is closer to 50,000.
The presence of the Chinese garment workers is not always welcomed in the city, where numerous Italian firms have been forced to shut, unable to compete.
Despite efforts to clamp down on illegal businesses and dangerous working conditions, shuttered warehouses often reopen elsewhere.