How to Set Up a Company in Italy – Ultimate Guide and FAQs

Italy has an extensive heritage, beautiful scenery, and a vibrant culture of fashion and art. It is no surprise that the country draws firms from all over the world, given its prime location in the centre of Europe, robust manufacturing industry, and a market with more than 60 million consumers. However, starting a business in this country requires comprehending a distinct set of laws, ordinances, and customs, which can be complicated.

This in-depth guide will cover everything, from picking the best business structure to comprehending tax repercussions and labour rules in Italy.

Understanding Italy’s Business Environment 

Italy is recognised for its extensive history and culture, and it is also a strong economic force. As per the 2022 Global Innovation Index, Italy ranks 28th out of 132 nations in terms of economic strength, making it an ideal place to start a business. 

Italy is desirable for businesses because of its thriving industries, including retail, research and technology, building and construction, manufacturing, and tourism. However, entering the Italian business sector demands knowledge of the nation’s business culture, where reliable connections and a well-organised company plan are essential.

Understanding the details of Italian business culture is crucial before you start since it will influence how you create and manage your firm. The importance placed on connections in Italian corporate culture is one notable feature. 

Italians place high importance on their professional ties, and trust is the foundation of these partnerships. Therefore, creating a strong network in Italy can give your commercial goals a firm base and open the door for more seamless transactions and cooperation.

English is spoken in Italy, but it is less frequently used in professional settings compared to other European nations. Therefore, proficiency in Italian is highly valued. Furthermore, despite their tendency towards hierarchy, Italian businesses like to conduct business casually. 

Meetings are frequently informal and unstructured, creating a comfortable setting for ideas generation and conversations. 

Now, let’s delve into the practical steps to set up your business in Italy. 

Choose your Business Structure

Understanding the nature of your company is essential. In Italy, you can operate as either an individual or a business. The kind of business you form will depend on its size, purpose, and financial capabilities. The main business categories in Italy are as follows:

S.p.A (Società per Azioni)

This is a joint-stock business. An S.p.A must have a minimum paid-up capital of €50,000.

S.r.l (Società a responsabilità limitata) 

This limited liability company needs a minimum of €10,000 in paid-up capital.

Ditta Individuale (Individual Company)

If you are the only shareholder and owner of the business, you can form this type of unlimited liability company.

S.n.c. (Società in nome collettivo)

This is a general partnership. 

S.a.s. (Società in accomandita semplice)

This is a limited partnership wherein at least one partner maintains limited liability and does not occupy a managerial position. 

Libero Professionista (Freelancer)

You can operate as a freelancer in Italy if you want to minimise expenses. You must apply for a Partita Iva (VAT number).

• Establishing a Bank Account

Like starting a business elsewhere, doing so in Italy requires financial planning. You must open a bank account for your new business once you’ve decided on the structure type that best meets your needs. Managing all your company’s financial transactions will depend on this account.

However, it’s crucial to remember that Italian banks are cautious about offering loans. This could be challenging for start-up companies that rely on borrowed money.

A minimum of 25% of your start-up capital must be deposited into your newly opened business bank account to comply with Italian law. This deposit is evidence of your sound financial standing and capacity for business.

Based on the bank’s requirements, you may need to provide additional documents when opening an account, such as evidence of identity, a tax identification number, and proof of address.

It’s also essential to remember that Italy has a wide range of banking options, from major international institutions to small local banks, so take your time choosing one that suits your needs as an entrepreneur. 

• Getting an Extended Permit

A further essential stage in the procedure is obtaining legal authorisation to reside and work in Italy. For non-EU nationals who want to open a business in Italy, a “Permesso di Soggiorno,” or Permit to Stay, is necessary. It gives you the long-term legal right to live and work in Italy, which is essential for the successful functioning of your company.

You gain a bit of an advantage if you’re a citizen of an EU member country or another nation with which Italy has an international agreement. This is because you receive an exemption from this requirement and may continue setting up your firm without applying for this permit.

Non-EU nationals must apply for a complete visa to the Italian consulate in their current country of residence. A company strategy, identification documentation, financial stability documentation, and other necessary paperwork are all required for this process. It is advisable to contact the Italian embassy or consulate for the most recent and comprehensive details on this procedure.

• Registration Process

There is a fair amount of paperwork involved in this procedure. You must write your company’s bylaws, articles of association (Statuto), and memorandum (Atto Costitutivo) and get them notarised. The notary public will register the firm with the Universal Company Register. Additionally, you must register with the following agencies:

• Tax Agency 
• Italian Business Register 
• National Institute of Social Security 

Setting Up an Authorised E-mail Address

A Posta Elettronica Certificata (PEC), also referred to as an authorised email address, must be acquired to start a business in Italy. With the PEC, a certified email system, you can send legally binding documents equal to registered mail with return receipts. This is a crucial line of communication with Italian government agencies.

Your PEC serves to deliver you official correspondence and papers, and it also acts as your login for several portals operated by the government. Additionally, adopting a PEC could assist your business in becoming more sustainable and reduce your consumption of paper, both of which are good for the environment.

A minimal setup charge must be paid to create a PEC. There are several providers to choose from, but select one endorsed by the Italian organisation in charge of digital affairs, called AgID (Agenzia per l’Italia Digitale).

Tax Registration 

Tax registration is an essential step for any business functioning in Italy. The Italian tax system comprises several different taxes, notably excise tax, corporate tax, sales tax, VAT, and tax on services. 

The two main taxes that apply to enterprises, corporate tax and VAT, must be registered after your company is legally established in Italy.

Given the complexity of tax requirements, consulting an accountant or tax advisor knowledgeable about Italian tax regulations is crucial. These experts can assist you in navigating the procedure and understanding your tax liabilities and any potential deductions or allowances you may be entitled to. Maintaining precise and current financial records is also crucial to guarantee that your tax filings are correct.

Frequently Asked Questions (FAQs) 

What is the most common type of company in Italy?

Due to its adaptable management structure and members’ restricted responsibility, Società a responsabilità limitata (S.r.L), or limited liability companies, are Italy’s most popular type of company.

What tax liabilities do firms in Italy have?

To do business in Italy, one must first register for corporate tax (IRES) and VAT. Depending on the type of business, additional tax requirements can be necessary.

Can a non-resident open a business bank account in Italy?

Non-residents can open a business bank account in Italy, although the procedure can call for more paperwork and checks. It is advised to ask the selected bank for guidance.

Final Thoughts

In summary, opening a business in Italy might be complicated, but it also offers great chances. Developing your business in Italy can act as a platform for the development of your company and international expansion because of the nation’s geographical location, thriving industry, and rich culture.

Don’t be afraid to ask for professional help when starting your business in Italy. Start Company Formations is well-suited to help you through the complexities of the Italian business climate thanks to its extensive experience and various services.

We provide specialised expertise and knowledge to assist businesses in establishing domestic and international firms. Payroll services, EMI banking solutions, corporate secretarial services, merchant service solutions, and international accountancy and tax services are all part of our service offering. 

We believe in building lasting connections that enhance your success. Therefore, we treat every one of our clients with professionalism and consideration. You can rely on us to make your transfer to Italy easy and hassle-free because we have years of expertise assisting businesses to grow and establish their presence in new markets.

Do you feel prepared to start your Italian business adventure now? Schedule a brief chat with one of our experts to understand how Start Company Formations can assist with your business setup in Italy.