Our vast experience in solving tax, financial, accouting and legal business problems allows us to give our prospective clients clear answers about the complex Italian system. Read our Frequently Asked Questions for more information.
Doing business in Italy
Most small businesses will choose to incorporate as a limited liability company, known in Italy as an S.r.l. This requires a minimum share capital of € 10,000 that must be deposited, even in part, into an Italian bank account. It is also possible to set up simplified limited liability companies without a minimum capital requirement.
Other types of business structures can be chosen, based on your products and services, personal liability, and taxation. For example, companies without limited liability can be set up, known in Italy as Società semplice or SS (for agricultural activities), Società in nome collettivo or SNC or Società in accomandita semplice or SAS (in which some shareholders have limited liability).
It is not necessary to set up a company to carry out work in Italy. Foreigners can work individually as an individual entrepreneur (imprenditore individuale) or freelancer (lavoratore autonomo). In these cases, setting up a business is simpler than for a company.
The framework of possibilities and obligations for starting a business in Italy is different for every type of business (read more here). It is therefore advised to turn to experienced professionals in order to seize all the opportunities, choose the best form of business, and avoid errors and possible penalties.
One of the most important requirement is having a minimum share capital of 10 000 euro (although only 2 500 euro are needed for the set up moment). The company should also be incorporated by at least one shareholder and one director, contain the abbreviation SRL in its name, and have a registered office in Italy.
In addition, you will need a notary and a VAT number. You will also have to comply with some initial formal obligations.
Our firm can take care of organizing all the activities related to the establishment and VAT number. We can also help you acquire the certified electronic mail, digital signature, establishment and endorsement of company books, among others.
Once the company has been set up, it will have to open a bank account with an Italian bank where all the company’s receipts and payments will be managed.
Setting up a company does not provide sufficient grounds for living in Italy longer than 90 consecutive days, so in order to remain in Italy and manage a company, the investor must have a permit to stay. This is why obtaining a residence permit is one of the most important aspects that a prospective foreign investor should consider.
In Europe, there is a “Permesso unico di lavoro” (in accordance with Leg. Decree 40/2014), which allows you to work in Europe in the country that issues it. This residence permit lasts one or two years and allows a person to work (as in the case of a residence permit for family reasons), but it is not valid for working in other EU countries because it is not an EC long-term residence permit. Non-EU citizens that have a long-term residence permit can carry out any economic activity in Italy (Leg. Decree 3/2007).
People who want to live in Italy now have a way to save on taxes.
In recent years, Italy introduced a special tax regime to encourage working people that reside abroad transfer their fiscal residency into Italy. The aim is to attract human capital into the country.
The beneficiaries are people from other countries (inside and outside of the UE) and Italians residing abroad that decide to enter into dependent employment (work), or start an autonomous activity or business in Italy. There are some requirements that you need to fulfill, but if you do so, you can benefit from a reduced tax rate on earnings of dependent or autonomous workers (known as IRPEF in Italy). This benefit can be a:
Tax reduction of 90% for those who transfer their residence to southern Italy (Abruzzo, Molise, Campania, Puglia, Basilicata, Calabria, Sardinia and Sicily). Thus, the beneficiary pays only 10% of the IRPEF.
Tax reduction of 70% for those who transfer their residence to other parts of Italy. Thus, the beneficiary pays 30% of the IRPEF.
Tax reduction of 50% for professional athletes. Thus, the beneficiary pays 50% of the IRPEF (the 90% reduction does not apply in the case of transfer to the southern regions).
If you want to know more about other tax reductions that you may be eligible for, do not hesitate to contact us. We will provide you with all the information you need and that suits your particular situation.
Before starting an agricultural business, you should decide what type of agricultural entrepeneur you want to be. The Italian legal system recognizes two types of agricultural entrepreneurs:
Direct cultivator: small business person who direcly and habitually dedicates himself or herself to the manual cultivation of the land
Professional agricultural business person (IAP) who, possessing the professional skills and competencies, directly or as parner in an agricultural business:
dedicates at least 50% of his or her time to the work of the agricultural business
earns at least 50% of their overall employment earnings from this same activity.
Retiring in Italy
We often help foreign clients to clarify taxation and declaration of properties and earnings held abroad. Many people decide to live and take up residency in Italy while maintaining property investments and financial activities abroad, or they choose to receive their pensions from the country in which they worked. So you may mantain your properties abroad while living in Italy, and this doesn’t seem to involve any special difficulties. But in practical terms, tax matters should not be taken lightly.
According to the general principe of “worldwide taxation”, people residing in Italy should file a declaration and be taxed in Italy for all earnings, wherever these are produced. However, you may be exempt from certain taxes if your country has signed an agreement against double taxation with Italy (read here some examples). Considerations range from the type of foreign earnings and property to the country of origin. In any case, considering the various circumstances facing foreign contributors who reside in Italy, it is always wise to consult an expert in order to avoid problems with the Italian tax system.
Many foreigners decide to reside in Italy while still maintaining the source of their earnings (stipends, pensions, rental income, interests, dividends, etc.) and their own investments (properties, bank accounts, financial activities, corporate shares, etc.) abroad.
People living in Italy should declare and pay taxes in Italy for all earnings wherever they are produced (exemptions may apply if there is a signed agreement against double taxatio with the foreigner’s country of origin).
A retired person living for more than 183 days every year in Italy is subject to all the fiscal obligations called by Italian law. We summarized the main obligations and deadlines for the year 2018 in this article.
Living in Italy
For foreigners coming from outside the European Union, the essential requirements for obtaining residence in Lucca are having:
- a valid residence permit issued in Italy
- the availability of a home and documentation proving such availability
- a valid passport
The residence request can also be sent by ordinary mail or by email. However, physical presence at the declared Italian address is necessary during the 45 days following the request. During this period, the Municipal Police checks the actual residence. The procedure must therefore be completed within 45 days.
In the presence of a residence permit, a health insurance is not required. However, a health policy is necessary for later access to the national health system (for which it will then be necessary to make a specific request to the competent public health office).