Open a business in Italy, what you need to know
Are you thinking of moving to Italy, are you already relocating or maybe you are looking to open a business in Italy, are you a SME, a farming entrepreneur or a digital nomad?
Bureaucracy in Italy
One of the first things you will find, when you research opening a business in Italy, is the feedback from others that running a business is too complex due to the added bureaucracy in Italy, so is this true?
From experience, and talking to our legal and accountancy professionals, it is known that operating a business in Italy is certainly no easy task, and keeping track of legal framework changes, pension changes, tax changes and laws all mean that it can be intimidating to operate a small business in Italy, but is it worth it?
Is it worth opening a business in Italy?
Operating a business in any country now, is full of documentation and regulations, Italy certainly is at the top of the pile when it comes to the volume of documentation and legal requirements, but there are also opportunities in Italy for those that work hard.
We all need to work, to earn money, and to be our ‘own person’. Running your own business comes with an added set of freedoms, choices and responsibilities these however can all mean that you feel more stressed than when you were maybe an employee, this can be true, and it takes thought and understanding to work through all the difficult decisions and times when operating your own business.
For all those that are thinking of kicking off their new business adventure in Italy, I wanted to share our experience so far relating to opening a business in Italy.
Researching your business type, defining your business requirements
Either as a first time business starter, or an experienced business owner who has been around the block, understanding and defining what your business will do, and who it will carry out business with is vital in order to ensure the formation of your business entity correctly.
What types of business can you register
Simple Partnerships, Limited company, PLC can all be registered in Italy, the type of incorporation will depend on many things, turnover, trading countries, tax requirements and also the type of business you will carry out, agriculture, software, sales, marketing, engineering, import or export.
Sales taxes – IVA
When you are selling direct to customers in Italy or Europe, there is a sales tax applied which, normally is 22%, however there are many different sales taxes in Italy, and these are based on your business type, for example farming and agriculture businesses have lower rates when selling to consumers.
There have also been changes when selling to consumer in other european countries, as the new VAT regulation mean that VAT is paid back to the country where the consumer will be receiving the goods. To handle the simplification of this europe wide sales tax there are ‘One Stop Shops’ and for most small businesses, the process to register and submit your sales tax report are simple, it becomes complex when certain upper sales volumes are reached.
Chamber of Commerce
In Italy, the Chamber of Commerce is the organisation that issues, creation, edits and maintains company documents. The initial partnership or company formation which will be handed by your accountant will be forwarded to the chamber of commerce. There are fees associated with any sort of incorporation, and then yearly registration fees.
It is vital to work with an accountant when forming a legal business entity in Italy, they will advise and determine the best way forward initially and that will work for you into the future, they will also handle all applications relating to the company or partnership, the tax agencies and social security agency, as required. They will also handle end of year accounts, and submission to the various authorities.