Italy is a country admired throughout the world for its art, design, classical architecture and culture. A leader in precision machinery, luxury automobiles, and hand-woven textiles, Italy attracts thousands of UK citizens each year to its food, wine, stunning landscapes, and warm Mediterranean climate.Starting a business in Italy has been a dream for many British citizens. The most common industries for startups here include hospitality (such as hotels and B&Bs), language learning, translation services, real estate (property management, renovations and so on) and tourism (tours operators, travel writing and so on).
Granted, many people who have succeeded in Italian business warn novices that the road can be paved with potholes and detours; Italy is a country rife with frustrating bureaucracy and inefficiency. Having said that, this doesn’t mean that owning and operating a business in Italy is impossible. In fact, recently enacted laws have streamlined the process to encourage more entrepreneurship, especially from foreign investments.
Here are some basic factors you need to know before starting and running your own business as a British expat in Italy.
Five Reasons To Start A Business In Italy
1: Italy’s economy is the third largest in the Eurozone and the eighth largest in the world.
2: Location, location, location. Italy is a gateway to the EU and links Central, Southern and Eastern Europe.
3: “Made in Italy” products and artisan crafts draw tourists from all over the world.
4: The culture and quality of life is unparalleled. Italy has more UNESCO World Heritage sites than any other country in the world, and its cost of living is low.
5: Recent reforms make Italy more pro-business and pro-growth than ever before.
The Laws For British Citizens Living In Italy
The laws governing whether or not a person can set up a business in Italy are based on the principle of reciprocity. In other words, you are eligible to start a business in Italy if your home country allows Italian people to set up businesses there. The UK is one of these countries at the present time. Before Brexit comes into force, citizens of the UK are members of the EU and still have the legal right to work or invest in businesses, not only in Italy but in any country in the EEA, with no work permit necessary. Do keep in mind that Brits who remain in Italy longer than 90 days must apply for residency at the local town hall (comune) where they live.
Types Of Companies
When setting up a business in Italy, one of the first things you need to decide is what type of company structure best fits your objectives and capital investment while also considering the risks, liabilities and tax implications. We recommend you retain legal and financial help from professionals, especially if you don’t speak the language or are unfamiliar with the country’s laws and regulations.
Sole Proprietors
Ditta Individuale (DI) is ideal for owners of a craft business since capital or assets are not required. Downside: you may have to put up personal collateral as a guarantee for debts.
Società per Azioni unipersonale (SA) is a good option for one-shareholder companies as your liability is limited to your capital investment. You can choose between a board of directors (two people is okay) or a single director to manage the company.
Società unipersonale a Responsabilità Limitata (SRL) allows you to have one partner, and liability is limited to the contribution amount. There is a minimum required for capital investments and there’s also a cap on how many employees you can hire. With this kind of company, you can’t make a public offering.
Medium-To-Big Business
Società a Responsabilita Limitata (SRL) (limited liability). There is no limit on the number of shareholders, but a minimum investment is required. Partners’ liability is limited to the amount contributed, and one quarter of the initial investment is paid at registration. Upside: there are no corporation taxes, less paperwork, and no notary fees.
Società a Responsabilità Limitata Semplificata (SRLS). Similar to the above, this deal is designed for young entrepreneurs.
Società Collettivo in Nome (CNS) is a ‘partnership’ with no limits on the number of shareholders or minimum capital expenditures. However, partners share jointly in the (unlimited) liabilities.
Società Cooperativa (SC) means ‘co-operative society’ and is structured to put no limits on the number of shareholders you can have or how much you can invest. You can choose to be a limited or unlimited liability company, but you must decide that at the outset.
Società per Azioni (SpA) (limited liability) has no limit on the shareholders, but a minimum amount of capital is required. Partners have limited liability (on the amount contributed), and a quarter of the initial investment must be paid upon registering the company in Italy.
Società Semplice in Accomandita (SAS) is similar to the Societa Cooperativa in that you have no limits on shareholders or minimums for capital investments, but the downside is that partners must assume the entire responsibility of debts and unlimited liabilities.
Basics Needed To Open A Business
• An Italian bank account
• A codice fiscale (tax ID number)
• A registered business license
• A cogent business plan
• Professional tax and legal advice (highly recommended)
Up Close And Personal: A True Story Of Two Brits In Umbria
Originally from Cornwall, Mark and Giselle Stafford began their specialty wine tour business, Gusto Wine Tours, in 2010. They had a true lightbulb moment after a trip to California and a wine tour through the Napa Valley. Realising they could offer something more, they returned to their home in Umbria, worked out a business plan, designed a website and did some trial runs. Soon they were ready to go.
"It's not easy to set up a business in Italy," explains Giselle. "You absolutely need a terrific accountant because the tax system is very different here." Mark concurs, "There are many hurdles to go over and you need to keep on top of the ever-changing rules and regulations. If you can do that, you'll have a ball!"
Along with the Staffords, other British expats we met have offered sage advice to potential British entrepreneurs in Italy:
• Have startup capital, as Italian banks don’t often dole out small business loans.
• Be realistic because there will be a lot of hoops to jump through, especially if you’ve never done business in Italy before.
• Be creative and tap into the needs of expats, offering relocation services, translations, or advice for newcomers.
• Be strong willed and determined. The famous triple threat: bureaucracy, red tape, and corruption are not for the faint of heart!
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