Do you want to start a business in Italy as a foreigner? here is a complete guide as well as the legal requirements to start a profitable business without money in Italy.
Okay, providing an in-depth analysis of the top 50 small businesses. Opportunities in Italy and a series of industry-specific business plan templates; We will now analyze in detail the legal requirements, the feasibility of the market and everything you need to start a business in Italy. So put on your entrepreneur hat and move on.
Why start a profitable business in Italy?
For a long time Italy has been a very popular tourist destination, but in recent years the country has become even more popular as a destination for small businesses. The strength of the “Made in Italy” brand is held in high regard in many areas, especially in the food and beverage, fashion and craft industries. The economy has also started to grow and has shown strong performance over the past three years under the new government, ending the previous triple-dip recession.
Starting a small business in Italy is a popular past, with over 3 million SMEs employing 50 people or less. In Europe’s fourth largest market, there are a number of incentives and support structures that can be leveraged. However, the significant amount of bureaucracy and red tape that Italian faces can put some business owners off.
Despite the fact that many companies are doing business in English these days, the process of starting a small business in Italy is still difficult. Everything, including the single point of contact on the Internet, is carried out in Italian, yet certain steps must be taken by you or the representative in Italy. Here are the steps to start a business in Italy.
Starting a Profitable Business in Italy as a Complete Guide for Foreigners
1. Have the right business idea: to start a business anywhere, and the very first step is to create a reliable and feasible business idea. Your best bet is to look at niches, products or services in which you already have some experience. Building a business in an area where you have no prior knowledge or experience will be much more difficult.
You need to know if your great idea can really be a business. How do you know? Unfortunately, you don’t always know; some entrepreneurs invested their savings in a concept that couldn’t really be a business.
To determine if your business idea is viable, it helps to take a step back and examine the concept objectively. You should ask yourself the following questions:
- Is there a market for this product and is there sufficient demand?
- Will your potential target market pay for your service or product? You have to remember that sometimes people will not accept a product, even if it is cheaper, because they like to stick with what they know and what they know.
- Are your potential target audience already paying for something like your offering? Do you sincerely think that they will migrate to your product or service?
- How would you define your proposal? Will you provide everything for everyone or do you decide to choose a niche product or service that you offer to a selected target market?
The challenge of asking all of these questions is performing a reality check. You don’t want to invest time and money in an unsustainable business. Your business needs a decent potential target market because if you don’t have customers your business will not make a profit.
Do some preliminary research on your potential target market and determine if they will become a real customer base for your business.
2. Determine the type of legal structure that is best for you: Italy offers a wide range of legal structures for starting a business, depending on its objectives, model, size of capital and degree of responsibility of the founders. and the tax implications.
For those looking to establish business with other shareholders, the most common legal structures are:
- Societa Cooperativa (SC) or cooperative society : This type of legal structure has no restrictions on the number of shareholders and has no minimum capital. Associates may have limited or unlimited liability, but this must be determined in advance.
- Societa Semplice à Accomandita (SAS) or Simple Convenient Company : this type of legal structure does not include any restriction as to the number of shareholders or minimum capital, and the liability of the partners is not limited.
- Societa Collettivo in Nome (CNS) or Partnership … The number of shareholders or the minimum capital is not limited. Partners have an unlimited number of joint obligations.
- Societa per azioni (SpA) or limited liability company : this type of legal structure has no restrictions on the number of shareholders. A minimum capital of 120,000 EUR is required. It must be fully signed and paid for within 3/10 of the time of setting up the business. In addition, the partners’ liability is limited to the amount deposited. A quarter of the initial investment must be paid before registering the company in Italy.
- Societa a responseabilita limitata (SRL) or limited liability company : there is no limit to the number of shareholders. A minimum capital of 10,000 EUR is required. The amount must be fully signed and will be paid 3/10 from the creation of the company.
The liability of the partners is limited to the amount of the contribution. In addition, a quarter of the initial investment must be paid before the company is registered in Italy, although there are no registration fees, less paperwork and notary fees.
If you want to charter a business without committing yourself personally, you should choose SRL or SPA. SRL is best for shareholders looking to maintain control, while SPA is best for larger investments and more investors.
If the company goes bankrupt, shareholders will only lose the money they paid for their shares. If you want to be the sole owner of a business, the following structures are the most common:
- Società per Azioni unipersonale (SA) : here you will be the sole shareholder of the company and your liability will be limited once the capital has been fully paid. A minimum capital of 120,000 EUR is required. You can create a board of directors with several members or an administrator to manage your Società per Azioni unipersonale.
- The Ditta Individualid (DI) : This structure allows you to own a craft business, but certain prerequisites apply. No capital or assets required. However, your personal effects will be kept as collateral in case you are in debt.
- Società unipersonale a responseabilità limitata (SRL) : this structure allows you to have a partner whose liability is limited to the amount deposited. You must issue a capital of € 10,000, which can be made up of contributions. If your contributions are paid in cash, you will need to appoint an expert auditor registered with Revisori, i.e. the Registrar of Auditors.
You will also need to authenticate the constitution of your SRLs. Once done, you can appoint a board of directors consisting of multiple members or a single director. You are eligible for simple accounts if your company’s turnover does not exceed € 120,000 and meets certain criteria (number of employees, etc.). Finally, you cannot under any circumstances make public offers.
3. Business plan and market overview: In order to give your business the best chance of success, it is very important to have a good understanding of the Italian market, a clear idea of what you want to do and a good knowledge of the realism of your offer before starting the process. registration of the company in Italy.
You need to do market research where you are looking for companies that are already operating in your field. and identify your potential customers. You can then develop a business plan that outlines your business goals, target market, and strategy, including an in-depth risk assessment that details potential obstacles.
4. Creation and registration of your company: Although the process of starting a business has become easier today than in the past, it is still advisable to seek legal and financial advice. You can do this through an approved agency or hire a notary to guide you through the legal procedures. You will need a bank account and will need to hire an accountant and lawyer if you don’t have a notary.
5. Documents: If you decide to use a notary instead of an agency, you will need to write an Atto Costitutivo (memorandum) and Statuto (statutes). A notary must be present either to draft the Atto Pubblico (memorandum of association) or to certify the signatures of the shareholders (scrittura privata autenticata).
This should be done at the Registro Imprese, your local chamber of commerce and your local tax office. The notary is also responsible for registering the company in the company register, which is kept by the Chamber of Commerce of the municipality in which the company is registered.
The company will only exist after this registration. If one of the shareholders cannot be physically present to sign the contract, the registration process can be carried out by a legal representative (usually a lawyer or an agent known to the investor).
Once registered, you (the company) will receive a reference number, a tax identification number and a VAT number. Within 48 hours, you will receive a confirmation of registration with the Registraire des entreprises, as well as documents from the INPS and INAIL (Personal Accident Insurance Bureau).