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Overall, Italy is a fair country in which to start a business. It was ranked 56th out of 189 territories in the latest World Bank ratings for Ease of Doing Business. However, Italy has a well-deserved bad reputation for bureaucracy, structural problems and corruption (especially in the Mezzogiorno, the southern half of the country), which tend to slow things down. Matteo Renzi, the recently elected prime minster, is valiantly struggling with the red tape at present. Starting a business is now easier than it was, a trend that should continue.
Your local chamber of commerce or city hall should be able to help you. Small and medium enterprises make up 90% of the Italian market, so you will certainly not be alone. Hence for best results, make sure to do thorough research and start planning well in advance!
If you want to start your own business in Italy, the first step is to ensure you have the legal right to live and work in the country. You will generally need to have a residence permit before you can operate a business in Italy. Additionally, if you from outside the EU, you will need as licence before you can start operations. For more information on residence permits and immigrating into Italy in general, see our Immigration section.
Based on your research, you can then develop a full business plan of around 3-5 pages. This should set out your business objectives, target market and commercial strategy, and include potential obstacles and financial projections.
The advantage of running a business as a self-employed person is that it is cheap and easy to set up. Furthermore, you have full ownership and control over the business, and that all after-tax profits are yours. On the other hand, you are personally liable for all the losses your business makes, and have additional responsibilities, such as keeping business records.
There are three forms of partnership: simple, general and limited. In a simple partnership (società semplice), the owners and their assets are not legally distinct; these are not common. In a general partnership (società in nome collettivo or SNC), each of the partners is jointly and severally liable for any debts and obligations the business incurs. In an limited partnership (società in accomandita semplice or SAS), there are two different types of partner: general partners, who run the day-to-day business and have full joint liability, and sleeping partners, whose liability is limited to their initial capital contribution.
Società a Responsabilità Limitata (SRL)
The Società a responsabilità limitata or SRL is the Italian equivalent of the German GmbH or the US limited liability company. Capital is divided into quotas, which are like shares but may not be floated on the stock exchange and may be subject to further limitations. The minimum start-up capital for an SRL is €10,000. This business entity offers considerable flexibility and is the most popular in Italy.
Corporation (Società per Azioni)
The SpA is the Italian form of corporation. Capital is divided into shares and liability is limited to a shareholder’s initial capital contribution. The minimum start-up capital for an SpA is €120,000. Share can be offered for sale to the public, and only an SpA can be listed on the stock exchange. Both the SpA and the SRL are deemed legal entities.
There are several other types of legal structure in Italy. These include the SAPA (società in accomandita per azioni), which combines features of the limited partnership and SRL. In the SAPA, there is a distinction between managing shareholders with unlimited liability and standard shareholders.
>Once the above stages are complete, you should be ready to set up your company. This process has been simplified recently and is not as awesome a task as it used to be. Nevertheless, you will still need legal and financial advice, to help you through the setup and registration process.
One option is to employ the services of a certified agency (galoppini) to help you. These organisations can register your company at the local chamber of commerce, register it for taxes and perform other essential administrative procedures. Alternatively, you could use a notary who will also be able to go through the legal procedures but will be more expensive. You will also need to have a bank account and hire an accountant (or use the services of an international accounting company) and a lawyer if you do not have a notary.
You will need to register your business at Registro Imprese, at the local chamber of commerce and the local tax office.It is particularly important to get this done promptly as paying taxes is the most time-consuming element in business set-up in Italy. To read more about tax for expats in Italy, see Taxation. For more information about setting up a business in Italy, see the Startup Overseas website.
As employer, you will have to ensure that your business complies with Italian labour regulations. You should familiarise yourself with the various employment contracts, minimum wage requirements, equal opportunity policies, work permits, insurance payments and recruitment options. Italian employees enjoy extensive rights, most of which have to be covered by the employer. Note that if you employ freelance workers, you will not have so many legal obligations as they will be liable to pay tax and insurance themselves.
Sections in EMPLOYMENT AND BUSINESS IN ITALY:
» Finding a Job, CVs, Interviews and Etiquette for Expats in Italy
» Work Culture and Labour Market for Expats in Italy
» Expats Owning and Operating a Business in Italy
» Business Groups, Associations and Networking for Expats in Italy
» Business Taxation for Expats in Italy
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If you are considering moving to Italy or are soon to depart, you can find helpful information and advice in the Expat Briefing dedicated Italian section including; details of immigration and visas, Italian forums, Italian event listings and service providers in Italy.
From your safety to shopping, living in Italy can yield great benefits as well as occasional drawbacks. Find your feet and stay abreast of the latest developments affecting expats in Italy with relevant news and up-to-date information.
Working in Italy can be rewarding as well as stressful, if you don't plan ahead and fulfill any legal requirements. Find out about visas and passports, owning and operating a company in Italy, and general Italian culture of the labour market.
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