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Employment and Business Start UpsBack to top Back to main Skip to menu
Italy - Self-Employment and Business Start Ups
Keep in mind that having a permit to stay in Italy does not automatically translate into a license to be self-employed. You will need to get your permit to stay or Permesso di Soggiorno to be converted into a Permesso di soggiorno per lavoro autonomo/indipendente. The ease of the entire process can vary greatly depending on your nationality and status.
Once you arrive in Italy head down to the local court to obtain approval for the type of business you wish to engage in. This is a requirement that is meant to ensure that a level playing field exists by preventing excessive competition within a single field in a small location. Once you do get approval you need to register your business with the Business Registrar, known as the Registro delle Impresse. In addition, your business will also have to be registered with the Registro delle Ditte (Copanies House), Registro delle Imposte (Tax Registrar) and the Uddicio Registri.
Once you’ve got these registration requirements out of the way you need to figure out what type of business model you would like to follow. Decide on whether you’d like to set up your practice as a freelancer or a limited or joint stock company. Working as a freelancer would be the simplest choice as you simply need to obtain your tax and VAT ID, in addition to registering your business. You can then go on to invoice your clients using your VAT registration number, known as partita IVA. This means that the client will withhold twenty percent tax on the invoice to make a direct payment to the income tax department.
If you do not wish to practice as a freelancer keep in mind that the tax system for any other type of trader and business enterprise can be a lot more complicated. To start up a limited liability company you will have to show that you have a working capital of at least 10,000 euros. For a joint stock company the requirement is a lot higher at 100,000 euros.
The best advice you can receive is to get help from solicitors and accountants for all your registration and tax filing requirements, as the red tape and paperwork in Italy can be just as intimidating as you have heard it is. To get your company registered it would be a good idea to seek the assistance of a notary.
Any individual who is a permanent resident of Italy has to pay taxes on income earned in Italy and overseas as well, whether you are an employee or a self-employed professional. You will be considered an Italian resident if the Population Registry has you recorded as living more than 183 days of the year within the country or if your life is based in Italy, such as that of a parent with kids schooling in the country. If you are a foreign resident however, who simply works in Italy as an employee or self-employed profession then you simply need to pay taxes on income earned in Italy.
If you wish to move to Italy as a self-employed professional you should keep in mind that income taxes have to be paid in advance. This prepaid income tax will then be offset when you file your annual returns. The amount that you pay in advance is determined on your estimates of revenue or based on your returns from the previous year, depending on which calculation applies to your situation. Make sure that you do pay your taxes and file annual returns in time as arrears in filing an annual return will attract hefty penalties. Fines can be as high as 120 to 240 percent of the tax, the exact percentage depending on the length of the delay.
Self-employed individuals also enjoy far fewer of the social welfare benefits that are accessible to employees, but joining the Unione di Commercio will help in terms of assistance and information.
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