Launching a business abroad is an exciting new chapter in the life of any entrepreneur, especially so if you are looking to launch your new business in Italy. This southern European country is renowned for its worldly contributions to cuisine, wine, art, design, fashion, and film. If your new business is centered around any of the aforementioned sectors, rest assured that Italy is the place to be. Here you will find many business opportunities balanced with a great quality of life.
Before we begin to delve into the business side of things, let’s explore what life in Italy is like.
The people
Italians enjoy a healthy work-life balance, ensuring that they have enough free time to spend with family and loved ones. Italy ranks as one of the top 50 safest places to live in the world. More specifically, the regions of Abruzzo, Apulia, Milan, and Tuscany are amongst the safest places to live in Italy. In comparison to other European countries, there are a limited number of English speakers in Italy. So, if you are looking to really integrate with your community it will be worthwhile investing in some Italian lessons. You will also need a residence permit if you intend to stay longer than 90 days in Italy and you are from EU.
Cost of living
The cost of living in Italy is rather cheap however, this can fluctuate significantly between the northern and southern regions. Generally speaking, living in the north of Italy is more expensive than in the South. The most expensive cities to live in are Milan, Florence, Genoa, Rome, and Bologna respectively. If you are looking to settle in some of the cheaper regions of the country, it is worthwhile looking into Abruzzo, Puglia, Basilicata, Calabria, Molise, and Le Marche. All across Italy, the quality of food is extremely high in comparison to its price, and even eating out is super affordable. In the larger cities, public transport is well-connected and budget-friendly. Some cities like Milan even have bike rentals that allow users to pick up any bicycle found on its streets for as little as €9 a month.
Steps to help you start a business in Italy
If you are planning on launching a business as a non-EU citizen, you must meet one of the following requirements. You must either buy an Italian company that has a minimum of three years of history and become an employee, or adversely, you should already have a company set up in the European Union, from which you can open a branch in Italy.
Here’s a step-by-step guide to help you navigate the process and set up a successful business in Italy.
1. Create a Business Plan
The first step in starting any business is to create a comprehensive business plan. This document should outline your business goals, target market, competitive analysis, marketing strategy, and financial projections. A well-crafted business plan will not only guide you through the initial stages but also help attract potential investors.
2. Choose Your Company Type
In Italy, you can choose from several types of business structures, including:
- Sole Proprietorship (Imprenditore Individuale): Ideal for small businesses with low risk.
- Partnership (Società di Persone): Suitable for businesses with multiple owners.
- Limited Liability Company (Società a Responsabilità Limitata or SRL): Common for small to medium-sized businesses.
- Joint-Stock Company (Società per Azioni or SPA): Best for large businesses planning to raise capital through stock sales.
Depending on the size of your business and how much money you invest, you can set up a Limited Liability Company (known as an SRL) or a Public-Limited Company (known as a SPA).
In terms of its structure, an SRL in Italy is greatly flexible, and the company can be set up with a minimum investment of €1. This option is especially advantageous for foreign investors as the director of the company doesn’t have to be an EU resident. The SPA is more useful if you wish to list your company on the stock exchange, however, this company requires a minimum investment of €120,000. These shares are freely transferable, and you must have at least one shareholder and one director in order to operate. The bureaucratic process in Italy can often be exhaustive and long-winded, therefore it is recommended that you seek out a reputable bilingual lawyer to help you with the process.
Each structure has its own legal and tax implications, so it’s important to choose the one that best fits your business needs.
3. Obtain a Long-Term Visa
Non-EU citizens must obtain a long-term visa to stay and work in Italy. This process involves applying for a residence permit (Permesso di Soggiorno) at your local Italian consulate or embassy. Ensure you have all the required documentation, including proof of financial stability and a detailed business plan.
4. Prepare Your Documents
Italy is known for its bureaucracy, so be prepared for paperwork. Key documents you will need include:
- Articles of Association: Legal documents outlining your company’s structure and purpose.
- Identification Documents: Passports, IDs, and any necessary permits.
- Proof of Address: Utility bills or rental agreements.
- Financial Records: Bank statements and financial projections.
5. Open a Business Bank Account
A corporate bank account is essential for managing your business finances. Choose a bank that offers services tailored to your business needs, such as online banking, credit facilities, and favorable foreign exchange rates.
6. Register for Taxes
To operate legally, you must register your business with the Italian Revenue Agency (Agenzia delle Entrate). This includes obtaining a VAT number (Partita IVA) and registering for corporate taxes. Additionally, you may need to register with other authorities depending on your business type and location.
Useful Data for Business Setup in Italy
- Ease of Doing Business Rank (2020): Italy ranks 58th out of 190 countries.
- Corporate Tax Rate: The standard corporate tax rate is 24%, with regional taxes ranging from 3.9% to 5.57%.
- Average Time to Start a Business: Approximately 6.5 days, depending on the business structure.
- Popular Industries: Tourism, fashion, manufacturing, and agriculture.
Benefits of launching a business in Italy
For starters, its population density is the fifth highest in Europe, with upwards of 60 million residents. This makes for a sizeable target audience and the Italian economy is majorly compromised of small to medium-sized businesses. Its geographical position also makes the nation a perfect crossing point for exporting goods and international trade. Its close proximity to France, Switzerland, North Africa, and Eastern Europe has favorably impacted its ability to conduct business internationally. The ‘Made in Italy’ tagline carries a lot of weight, therefore, if you execute your product with a great deal of skill, you can expect to reap the benefits. In any sector, there are countless Italian brands that are well-known across the world – Fiat, Peroni, Dolce and Gabbana, Nutella, Martini, Vespa, and the list goes on.
The Bottom Line
Starting a business in Italy involves several steps, from drafting a business plan to registering for taxes. Understanding the local regulations and preparing all necessary documents will help you navigate the process smoothly. With its rich culture, strategic location, and diverse market, Italy offers numerous opportunities for entrepreneurs willing to take the leap.
For more detailed information and personalized advice, consider consulting with local experts or legal advisors who can guide you through the nuances of Italian business law.
