Starting a business in Italy is great adventure. Italy is the 3rd biggest economy in Europe and the 8th in the World. It is one of Europe’s primary centers for the creation of startup businesses. Also, its strategic position enables trade between Northern and Southern Europe, North Africa, and the Middle East, making it an ideal place where to start an international business.
Nonetheless, there are many factors to consider when setting up a business in Italy.
Draft a business plan for your Italian corporation
Understanding the market for your business, knowing the clientele, and putting together an in-depth strategy with specific goals are part of the initial step in starting a business in Italy.
Drafting a business plan will help you figure out if there is room for your company in the Italian market, who your target customers are, what your start-up costs are, and what your short and long-term plan is.
Once you’ve formulated a business plan, you’ll have a reasonable idea of how to navigate the Italian market.
Define the type of Business you want to set up in Italy
Italy provides various options to start your business. It is important to identify which of the categories your business will fall under, depending on its size, function, and budget.
To set up your business in Italy, it is essential to define the type of company that is the best suited for your needs:
- Limited liability companies: these ere the most popular types of companies in Italy and they enable the widest flexibility to the founders.
- Partnerships: founders of the partnership corporation in Italy have unlimited liability towards creditors and are required to use their personal assets to pay the debts and commitments of the company.
- Sole proprietorships: these are the simplest and fastest way to start a small business in Italy. The owner of the sole proprietorship is the only one responsible for the enterprise.
- Public limited company: these are large businesses listed on the stock exchange with an unlimited number of shareholders.
Permit requirements
There are no specific limitations regarding most nationalities when it comes to opening a company in Italy. The Director or Shareholder isn’t required to have Italian residency, it is enough to provide an ID or a valid passport.
But, if you’re planning on moving to manage the business locally, you have to get a legal permit to live and work in Italy.
Legal requirements to register your Italian company
To get your company registered in Italy, you have to put together all the essential documentation and paperwork.
You must draft a memorandum and articles of association as well as the company bylaws and have them notarized. The notary public will then register the company with the Universal Company Register.
In addition to notary expenses, you have to pay fees for both the Register of Enterprises and the Chamber of Commerce, who will both be involved in the company registration process. You’ll also have to pay a fee to get corporate and accounting books validated by the Trade Register.
If you choose to operate as a freelancer, the amount of paperwork will be reduced significantly, and the registration process will be different.
Set up a Corporate Bank Account in Italy
It is compulsory for every company in Italy to open a corporate bank account through which they can perform business transactions.
A valuable thing to keep in mind is that Italian banks are cautious when it comes to loans. So you’ll need to have your start-up money ready before you set out on the venture. You’ll also have to deposit at least 25% of your start-up capital into this account.
Italian taxes
The Italian law imposes five types of taxes when it comes to business:
- the Imposta sul reddito (income tax),
- the Imposta sulle società(corporate tax),
- the Imposta sul valore aggiunto(VAT or sales tax),
- the Imposta sui servizi (tax on services),and
- the accise (excises).
If you’re a foreign national working in Italy, then you will be taxed on the income you earn there. Also, once the company is registered, the two primary taxes to register for are corporate tax and VAT.
Before starting a business in Italy, you should find more information on the different types of business taxes you’ll incur.
Despite the reputation for bureaucracy a rigid labor market, Italy still has an attractive degree for foreigners to start their own business there.
So, are you thinking of starting a business in Italy? – Let’s go ahead and contact your Damalion expert now.
