Running a business in Italy
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
Customer preferences
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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