How to start a small business in Italy?

Are you thinking of starting a small business in Italy? Here’s a quick and simple overview of all the essential steps involved.

Italy, the third-largest economy in Europe and the eighth-largest globally, presents an enticing prospect for launching a business. This market offers promising opportunities across various sectors, including life sciences, information and communication technology (ICT), fashion, tourism, and luxury real estate. However, comprehending the intricacies of doing business in Italy can take a lot of work for international entrepreneurs keen on exploring this market.

While it’s widely acknowledged that the process can be time-consuming and laden with bureaucratic procedures, recent government measures and incentives are making establishing a small business in the country progressively more appealing.

Below are vital steps foreign investors should consider when considering starting a small business venture in Italy.

Steps to Start a Small Business in Italy

Find Your Niche

Choosing the right niche for your small business in Italy is crucial for success. Your niche defines your target market and the products or services you offer. To make an informed choice, consider various options and follow what you connect most with. Here are some options and tips to help you make an informed decision:

Passion and Expertise: Start by identifying your interests and skills. Consider what you’re passionate about and knowledgeable about. For example, a restaurant or food catering business could be a great niche if you love Italian cuisine and have culinary expertise.

Market Research: Conduct thorough market research to understand consumer demand. Look for gaps in the market that your business can fill. For instance, you could start a sustainable home goods store if you need more eco-friendly products.

Competitor Analysis: Analyze your competition within the chosen niche. Determine their strengths and weaknesses. If your area has a high concentration of coffee shops, you might consider specializing in a unique coffee blend or opening a themed café.

Target Audience: Define your target audience. Know customer preferences, demographics, and buying habits. If you’re interested in fashion, consider a boutique catering to a specific age group or style.

Profitability: Evaluate the potential profitability of your niche. Some niches may have higher profit margins than others. For example, tech repair services for smartphones and laptops are often in high demand.

Local Trends: Stay updated on local trends and cultural nuances. A niche that aligns with Italian culture, such as artisanal cheese production or wine tours, can be a hit in Italy.

Draft Your Business Plan

Establishing a small business in Italy demands a solid blueprint – a business plan that’s not just a formality but a roadmap for your business. It outlines your goals, objectives, strategies, and tactics. It also helps you to identify your target market and to understand the competitive landscape. Within its pages, emphasize your business’s essence – goals, strategies, and unique concepts.

When writing your business plan for Italy, be sure to include the following sections:

Executive Summary: This is a brief overview of your business plan. It should include your company’s mission statement, products or services, target market, and financial projections.

Company Description: This section details your company, including its history, products or services, and competitive advantages.

Market Analysis: This section analyzes the Italian market and identifies your target market. It also discusses the competitive landscape and identifies your key competitors.

Marketing Plan: This section outlines your strategies for reaching your target market and promoting your products or services.

Financial Plan: This section projects your income, expenses, and cash flow for three to five years.

Crafting a well-detailed business plan can significantly increase your chances of success in the Italian market.

As your business plan takes shape, it becomes your Italian business compass, directing you through the complicated pathways of the market. Remember, this isn’t just a document; it’s a strategic ally. With it, you’re equipped to navigate the challenges and achievements of the vibrant Italian business arena.

Select Business Structure

Choosing the proper business structure for your small business in Italy is a critical decision that can impact your taxes, liability, and overall operations. There are several options to consider:

Sole Proprietorships

  • Sole Trader (Ditta Individuale)
  • Freelancer (Libero Professionista)


  • General or Unlimited Partnership (SNC)
  • Limited Partnership (SAS)


  • Limited Liability Company (SRL)
  • Simplified Limited Liability Company (SRLS)
  • Public Limited Company (SpA)
  • Cooperative Society (Societa Cooperativa)

Limited Liability Companies (SRL) and Public Limited Companies (SpA) are Italy’s most common legal structures. The best choice depends on your business size, growth plans, and personal liability preferences. Seek legal and financial advice to make an informed decision, ensuring compliance with Italian regulations. 

Forming an SRL can be advantageous since you’re starting a new company and prefer a more straightforward setup. This structure allows you to create a company with just one shareholder by investing a minimum of 1€. Moreover, the director doesn’t need to be a resident of the European Union, which is beneficial for foreign investors. However, forming an SNC partnership might be suitable if you want to start a small tech consultancy with a partner.

Register Your Company

Once you’ve selected how you’d like your small business structure to be, it’s time to get your company registered, comprising simple steps within a matter of days.

Draft the Articles of Association and Memorandum of Association. 

These documents will outline the company’s structure, ownership, and operations. You will also need to pay the share capital, the amount of money the company’s owners have invested.

Visit Notary

Once the Articles of Association and Memorandum of Association are complete, you must visit a notary to incorporate the company. The notary will verify that the documents are in order and that the share capital has been paid. They will then formalize the company’s incorporation and issue a certificate of incorporation.

Obtain a tax code and VAT number.

The company must also obtain a tax code and VAT number from the Italian tax agency. These codes are necessary for the company to operate legally in Italy. The company’s accountant will typically handle the process of obtaining these codes.

Create a bank account.

It is vital to keep in mind that Italian banks are cautious about lending. You must have your startup capital available before embarking on your venture. You must deposit at least 25% of your initial investment into this bank account.

Obtain a long-term permit.

This is one of the most important factors to consider. To start a company in Italy, you must first get legal authorization to reside and work there. Residents of the European Union and citizens of countries with whom Italy has international agreements are exempt from this stage. Non-EU investors will need to apply for a complete visa.

Register your company

Finally, the company must be registered in the Register of Companies held by the Chamber of Commerce. This registration is what officially establishes the company as a legal entity.

The entire process of incorporating a company in Italy can take 5-6 days. However, the process can be relatively smooth if you have all the necessary documentation.

Make your Business Website

Having a solid online presence is crucial for any small business in Italy. Start by creating a user-friendly website that showcases your products or services. Use a platform like WordPress or hire a web developer for a customized site. Ensure your website includes essential information such as your business name, contact details, product descriptions, and prices.

If you run a boutique in Rome, consider including high-quality images of your clothing collection, your store’s location, and an online store where customers can make purchases on your website.

Have a Professional Email:

A professional email address adds credibility to your business. Register a domain name that reflects your company’s name and set up email addresses using that domain. Services like Google Workspace or Microsoft 365 are excellent options for professional email hosting.

If your business is named “Taste of Tuscany,” your professional email could be [email protected].

Start Digital Marketing

Effective digital marketing can help you reach a broader audience and boost sales. Begin by creating social media profiles for your business on platforms like Facebook, Instagram, and LinkedIn. Consistently post engaging content, including images, videos, and articles related to your industry.

If you own a pizzeria in Milan, consider sharing enticing images of your pizzas, running Facebook ads aimed at local pizza enthusiasts, and collaborating with food influencers for Instagram promotions.

Additionally, consider using Google Ads to increase your online visibility. Optimise your website for search engine optimisation (SEO) expert by incorporating relevant keywords and phrases to rank higher in search results.

Effective digital marketing often involves trial and error, so adjust your strategies based on what works best for your specific business and target audience.

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