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Explore the market: Italy

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Italians are perceived as rather conservative and local patriots when it comes to shopping, but if we investigate some analysis, it shows that Italy is the world’s 15th largest eCommerce market, with tracked growth in last years, and big potential for upcoming decades. What should we expect when entering this market? Today we have prepared for you a complex insight into eCommerce market in Italy.

Some statistic data

Population: 60,36 mln

GDP per capita in 2019:  $33,228  (The country went into lockdown on March 12 and its GDP fell by almost 5 percent between the fourth quarter of 2019 and the first quarter of 2020).

Official languages: Italian

Purchasing power: In 2020, parity for Italy was 0.6 LCU per international dollars

E-commerce market

Size of the e-commerce market

Although Italy has Europe’s fastest-growing e-commerce market, the share of the population that shops online is still low. In all, 82 percent of Italians have shopped online, and the figure is even lower in DESI, the European Commission’s Digital Economy and Society Index. The main reason may be that a significant minority, representing twice the EU average, state that they have never used the internet. However, the market is clearly growing, and many market participants are investing in the country. For example, Zalando opened a warehouse near Verona in the spring of 2020

You can find more information here: https://www.postnord.se/siteassets/pdf/rapporter/e-commerce-in-europe-2020.pdf

Average basket value

The average shopping basket value is relatively low and consists of less than 4 items.

Most popular marketplaces

Online grocery shopping in particular increased sharply, and the grocery chain Carrefour stated that the number of online customers doubled in the country. Amazon did not launch an Italian domain until 2010, but quickly achieved a market share of about 16 percent. German Zalando has also successfully established a presence and currently accounts for about eleven percent of the country’s online fashion retailing.

Returns / complaints – legal regulations

In Europe, online consumers have the right to cancel and return their order within 14 days. They don’t need to tell the retailer why they are returning the item. Of course, there are some exemptions to this rule. For example, tickets or clearly personalized goods can’t be returned under the same conditions or can’t be returned at all.

You can find more information here: https://ecommercenews.eu/online-returns-in-europe/

Most popular industries and product categories

Clothing and footwear, home electronics, books and audiobooks, cosmetics and skincare, sports and leisure products.

Permits, licenses, certificates by industry

Being an EU citizen is a big perk since they do not need a residence permit to settle in Italy and can therefore obtain their business license easily.

Non-EU Citizens are still potentially eligible to set up their business.

The first question to have clear in mind is the scope of business activity you would like to carry out in Italy since, for certain sectors, setting up a business is subject to the granting of licenses, authorizations, and permits by the local Chamber of Commerce (Camera di Commercio).

The first step to set up your company in Italy is preparing and drafting the necessary documents with the assistance of a notary. The two main documents are the Atto Costitutivo (memorandum) and the Statuto (the articles of association). It’s important to keep in mind that the notary must also be present either to draft the Atto Pubblico (incorporation agreement) or to certify the signatures of the shareholders (“scrittura privata autenticata”).

The notary is also required to register your business in the Registro Imprese (Business Register) at the local Chamber of Commerce. This is the most relevant step since after registration the company will officially exist.

The business start date, however, can be put off until later. It is required to notify the Economic and Administrative Index (REA) at the local Chamber of Commerce of the business start date as well as the obligatory certified email address previously obtained. The certified email address (PEC, short for Posta Elettronica Certificata) can be purchased from any number of sources.

You will then receive a reference number, the tax identification number, and the Partita IVA (VAT number). Within 48 hours you will also receive a confirmation of registration in the Registro Imprese as well as documentation from INPS (Social Security Administration) and INAIL (Accident Insurance Office).

You can find more information here: https://www.accountingbolla.com/blog/obtaining-a-business-license-in-italy-the-ultimate-guide#gref

Preferred payment methods, trusted payment providers

A majority of Italian consumers prefer to shop online using the Italian payment solution CartaSi/Nexi, which currently accounts for about half of all online purchases. Other popular payment methods include Paypal and cash on delivery.

Logistics

Expected delivery time

At present, deliveries take one to three days, and the north of the country has stronger levels of logistics capabilities than in the south.

You can find more info here: https://www.jpmorgan.com/merchant-services/insights/reports/italy

The most popular courier company

The main parcel carriers include Poste Italiane Group, GLS Italy, DHL, UPS, TNT Express, and FedEx. The B2C delivery is dominated by Poste Italiane and BRT (formerly Bartolini).

Most popular delivery method

Home delivery in the daytime, delivery in the mailbox, or home delivery in the evening.

Same day delivery

Is not that important as free delivery and returns, so e-commerce merchants and delivery providers should be conscious of these potential high costs to doing business.

You can find more info here: https://www.jpmorgan.com/merchant-services/insights/reports/italy

Shipping package regulations

What Cannot be shipped to Italy?

Coins; banknotes; currency notes, including paper money; securities of any kind payable to bearer; traveler’s checks; platinum, gold, and silver; precious stones; jewelry; watches; and other valuable articles are prohibited in Priority Mail Express International shipments to Italy.

You can find more information here: https://pe.usps.com/text/imm/il_008.htm

Running a business in IT

The legal form of business

A Società a responsabilità limitata (limited liability company) and the Società per Azioni (similar to a corporation) allow investors to be protected by the “corporate veil,” so that in the event of a crisis they will only lose the capital invested. This higher protection however comes at a higher cost in terms of initial investment and taxation.

Another option is the Società a responsabilità limitata semplificata which requires a lower capital investment and has generally less red tape to deal with.

In terms of unlimited liability companies, where the investors are personally liable for debts undertaken by the company, Italian law offers a wide range of business structures with easier and cheaper procedures to endure, known as società di persone.

You can find more information here: https://www.accountingbolla.com/blog/obtaining-a-business-license-in-italy-the-ultimate-guide#gref

Bank account, banking regulations

Non-Italian residents are entitled to open non-resident bank accounts, regardless of citizenship or visa status. It’s worth noting that these non-resident accounts typically entertain higher interest rates. While it is possible to open an account online, it can be tricky. You’ll need to obtain an application form from the website of whichever branch you choose. It’s important to do your research first, as not all banks will allow you to open an account online from overseas.

You can find more information here: https://remitr.com/blog/how-to-open-bank-account-in-italy/

Tax rules: Corporation tax

The main income tax levied on individuals is the personal income tax (PIT), also known as the Imposta sui redditi delle persone fisiche (IRPEF).

In Italy, the individual is subject to the following income taxes: national income tax, regional income tax, municipal income tax, the tax liability shall be computed at a progressive rate.

You can find more information here: https://taxsummaries.pwc.com/italy/individual/taxes-on-personal-income

Italian individual income tax is called IRPEF. Tax rates are progressive and range from 23% to 43%. Additional taxes are due at the regional (0.9% to 1.4%) and local (0.1% to 0.8%) levels.

If you’re a foreign resident working in Italy, you’re only taxed on the income earned in Italy. However, if you’re an Italian resident, spend more than 183 days a year in Italy, and your “center of economic interest” (i.e. your business and investments) is in Italy, your worldwide income is subject to IRPEF.

You can find more information here: https://internationalliving.com/countries/italy/taxes/

Import/export regulations

As it is a member of the European Union, Italy applies any and all Community regulations which are valid throughout the Union.

If the EU has quite a liberal foreign trade policy, there are a certain number of restrictions, especially at the level of agricultural products, ensuing from the implementation of the CAP (Common Agricultural Policy): applying for compensations when importing and exporting agricultural products to favor the development of agriculture within the EU implies a certain number of systems to control and regulate goods entering EU territory.

Moreover, for sanitary reasons, with regards to Genetically Modified Organisms, if they are allowed in Europe, their presence must, for example, be systematically specified on the packaging. Importing beef fed on hormones is also prohibited.

The principle of precaution is now more widely favored: in case of doubt, import is prohibited until the non- noxiousness of the goods is proved.

Goods containing animal products require a certificate from a competent authority in the country of origin. Fishery products need to show a catch certificate.

You can find more information here: https://import-export.societegenerale.fr/en/country/italy/regulations-customs

VAT registration thresholds

Generally, non-resident (no permanent establishment) businesses that must register for VAT in another EU state face a nil registration threshold. A major exception to this rule is eCommerce sellers to consumers, where there is special EU distance selling VAT thresholds. VAT threshold in Italy: €65,000.

You can find more information here: https://www.avalara.com/vatlive/en/eu-vat-rules/eu-vat-number-registration/vat-registration-threshold.html

Willing to buy from foreign sellers

One reason for the popularity of foreign market participants in Italy is that domestic participants have lagged behind in digitalization in comparison. Many businesses, especially small and medium-sized companies, still lack a digital presence.

Most popular countries for import of goods

The most popular foreign e-shops used by Italian customers are primarily located in the United Kingdom (19%), China (18%), and Germany (16%).

https://www.privacyshield.gov/article?id=Italy-eCommerce

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