Starting a Business in Italy and France – What You Need to Know

Perhaps you are considering launching a company abroad, in Italy or France? If so, you’re at the right place. Right now is the best time to start a business. Numerous chances are available in several European countries, including Italy and France. If you are interested, this is going to be your guide to learning the steps of establishing a business in Italy or France.

Starting a Business in Italy

Italy is a significant economic power in Europe and a desirable place to invest. It is the third-biggest economy in the E.U. and the eighth-largest in the world. The country continues to progress in its recovery from the global financial crisis and has been expanding consistently yearly.

Italy provides enterprises with a strategic entrance to customers in Northern Africa and the Middle East because of its location at the heart of the Mediterranean Sea. Due to its strategic location, it serves as a critical centre for connecting to other E.U. states.

For many aspiring entrepreneurs, starting a business is a major step ahead, but if you have the proper knowledge, the step need not be as intimidating. If you wish to launch your own company in Italy, you might first wonder: How? The Italian government offers financial assistance to international companies. Depending on how much money you want to invest or where you want to base your business.

Getting Started

When wanting to start a business in Italy, you will have three options. The Simplified Limited Liability Company (S.R.L.S.), the Italian Branch Office, the Public Limited Companies by Shares (S.P.A.), and Traditional Limited Liability Company (S.R.L.) are the available entity categories in Italy. To choose the entity type that best suits your company’s needs and objectives, C.T. can assist you in deciding.

The S.R.L. status could be more favourable if you want to start a brand-new business. On the other hand, if you anticipate receiving a substantial sum of money from investors, the SpA status could be of greater relevance to you.

Submit the Paperwork

Once you’ve decided on the type of business you want to create, do the following; 

• Write the memorandum for the business
• Register and file your company’s bylaws
• Purchase accounting and corporation books
• Submit the necessary paperwork to the Italian Business Register

Taxes

The statutory rate of corporate income tax is 24 per cent. Italy imposes 14 taxes and contributions, which, when added together, may account for 59% of earnings. Tax credits, however, can somewhat offset this. The government also offers a variety of tax breaks and incentives. These include tax credits for employment (particularly for employing women and younger workers), energy efficiency, and tax breaks on revenue from certain intangible assets. 

Additionally, the government provides sizable tax credits for R&D: 15% for expenditures in capital goods and machinery and 25% for private R&D investments, with 50% available for projects carried out inside universities or other research institutes. Businesses in the southern regions of Italy are eligible for further state assistance if they invest in new production and R&D.

Get Familiar With the Rules

As a foreigner looking to start a business in Italy, you should be aware that there aren’t any particular restrictions on most nations when it comes to doing so. The director or shareholder has to have a valid I.D. or passport; they are not required to have Italian residence. However, if you want to relocate to handle your firm locally, don’t forget to obtain a valid work and residency visa for Italy. 

It is not essential to submit a customs entry if you want to import products from another E.U. member state. However, if your imports exceed a yearly value barrier, you might need to submit an intrastate declaration. 

It is also important to note that importing some things is forbidden, including live animals and animal products, fake or stolen commodities, and genetically modified organisms (G.M.O.s). Additionally, items containing chemicals, including mercury, P.C.B., PCT CFC, and HCFC, are prohibited from being sold.

Approximately 96% of people in the nation are of Italian descent, although there are numerous other ethnic groups. A regional dialect is the mother tongue of nearly half the population, some of which are not recognized by the government. Despite what is believed about how hard it is, bureaucracy can easily be handled with proper planning, concise concepts, and expert assistance. Relying on local assistance is the best approach to ensure a smooth start for your firm.

Starting a Business in France

France is a developed and industrialized nation with the third-largest G.D.P. in Europe. It is desirable for business due to its supportive atmosphere, sophisticated financial system, and highly educated workforce. The cultural influence of France, one of the most travelled nations in the world, is well known. France also enjoys direct access to the European market and its partners thanks to being one of the founding members of the Eurozone and the European Union. The E.U. allows free movement of labour, products, services, and money, as well as access to its 450 million customers, which helps G.D.P.s develop and generate more employment and higher salaries. 

Create a Business Plan

Just like starting a business any place else, you will need a business plan. A business plan enables you to clarify your mission and vision for your investors – and, more importantly, the French business bank account manager.

It would be best to think about who your French market and customers will be, how much money you are investing, your previous company expertise, and how much you anticipate earning and spending over the following several years.

Choose a Business Type

You must choose the business and tax structures that are best for your company. It might be wise to get in touch with the appropriate professional organization or chamber of commerce. Your decision will depend on several factors, such as how you want your firm to pay taxes and if you have personal assets you wish to safeguard. The most straightforward approach for independent contractors to start their firm is as a micro-enterprise, which is not a corporate structure but a tax status.

In contrast to a S.A.R.L., the Entreprise unipersonnelle à responsabilité limitée (E.U.R.L.) is a limited liability entity with only one shareholder and one owner. If you will have more than one partner, the Société à Responsibilité Limitée (S.A.R.L.) is a limited liability business with no minimum capital requirement, and liability is restricted.

For sole proprietors, a Société par Actions Simplifiée Unipersonnelle (S.A.S.U.) is a distinct legal entity with no maximum turnover requirements. Your financial responsibility is restricted to your contributions while forming your firm. The Entrepreneur Individual with Limited Liability (E.I.R.L.) programme offers sole proprietorship with a kind of limited liability. Working under a corporate name or your own name is an option.

You must determine if your firm is unregulated (non-régleméntée) or regulated (réglementée) regardless of the category it falls under. You must register with the proper organization if your line of work falls under one of these regulated professions. Before you can start working, you might need to demonstrate that you have the necessary training, expertise, and insurance liabilities.

Create a Bank Account for Your Business

A business bank account is required. Since it is now feasible to create a bank account remotely (particularly given the limits placed on travel following the worldwide epidemic), you should be ready to discuss your business strategy and respond to any inquiries that the bank manager may have.

Because of France’s strict money laundering rules, bank account managers can be quite picky about who they let create an account. An account manager’s mind is at peace if he can see all the facts and numbers set out, which is where your business plan comes in extremely helpful.

You must provide a completed application form, a certified copy of each director’s and shareholder’s passport, and two recent utility bills, which will be submitted to The National Institute of Statistics and Economic Studies (INSEE) to get your newly established business registered with the national business directory, and he tax agency, or Centre des Impôts.

A unique 14-digit registered number made up of a S.I.R.E.T., and SIREN number will be given to you when once you obtain the “Extrait Kbis” (certificate of incorporation). This number serves as your company I.D. and must be printed on all official documents. These are the key figures you require when opening a business in France.

The S.I.R.E.T. consists of your 9-digit SIREN number in addition to a 5-digit code unique to your business. The A.P.E. (Activity Principal of the Enterprise) or NAF code that designates the primary activity of your company. 

The standard percentage is 33 1/3%. With no decrease in the tax base and no rebate for small amounts payable, this rate is applied to taxable profits rounded to the nearest euro to determine a company’s corporation tax. Of course, you will need to hire an experienced lawyer and accountant to ensure your documentation is in order. 

Ending Note

Make sure the nation you select best matches your firm before launching a business. You need to think about many legal and financial issues and how to set up your business activities in a foreign nation. Even though conducting business internationally might be difficult, your firm can succeed in any market with a proper strategy and execution. Get in touch with one of our specialists today and see how we can help you establish your company in the UK and Internationally.

Read about the best European countries to start a business