Starting a Business in Italy as a Foreigner | US Guide

With its strategic location within the European Union, Italy presents many opportunities for international entrepreneurs.

Before diving into the details of Italian business ownership, you’ll want to understand the requirements. How much does it cost to launch a business in Italy? What factors should foreign investors consider?

Let’s look at how to start a business in Italy and the steps you’ll need to take.

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How to Start a Business in Italy as a Foreigner: First Steps

Italy presents a wealth of opportunities for entrepreneurs. The country's welcoming business environment and diverse economy make it an attractive destination for foreign entrepreneurs.

However, navigating the process of starting a business in a foreign country can take time and effort. Before digging into the steps, let’s see whether you can even start an Italian business as a foreigner.

Can I Start a Business in Italy as a Foreigner?

Yes, as a foreigner, starting a business in Italy is achievable, even if you're a non-EU citizen. The process is similar to that for EU citizens, but you may need a business visa depending on your situation.

Fortunately, Italy offers various visa options tailored to self-employed international freelancers and startup founders.

What Steps will be involved in starting a business in Italy for foreigners?

While the process might seem complex at first, understanding the essential steps can make establishing your business in Italy a smoother experience. Here are the key steps for starting a business in Itay:

1. Choose your business structure: Determine the most suitable legal structure for your business. Each structure has different legal and financial implications.
2. Register your business: Submit the necessary documents to the Italian Business Register (Registro Imprese) through the Chamber of Commerce.¹
3. Obtain a tax identification number: Obtain your VAT number from the Italian Tax Agency (Agenzia Entrate). This number is essential for conducting business transactions.²
4. Get the necessary licenses and permits: Depending on your business activities, you might need specific licenses or permits. Research and acquire any required authorizations to operate legally.
5. Open a business bank account: Once your business is registered, open a corporate bank account in Italy. This facilitates financial transactions and ensures compliance with local regulations.

Familiarize yourself with Italian tax laws and regulations to ensure timely payment of taxes and avoid penalties. Fulfill Social Security obligations and register for relevant insurance coverage.

How Much Does it Cost to Start a Business in Italy as a Foreigner?

The cost of starting a business in Italy as a foreigner can range from €5,650 in the first year to €1,850 in subsequent years. This covers essential expenses like company incorporation and registration.

A breakdown of typical expenses for running a business in Italy includes:

• Company incorporation: Forming a legal structure like a limited liability company typically involves a notary fee, which varies depending on the share capital.
• Trade register: Registering your company with the local trade register costs around €520.
• Trademark registration: Registering a trademark for one category costs €200, with an additional €34 for each extra category.

Note that the minimum share capital requirement varies for different types of companies. For a limited liability company (LLC), it ranges from €1 to €10,000, while a joint stock company requires at least €50,000.

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Legal Requirements for Starting a Business in Italy as a Foreigner

The Italian government has streamlined investment processes, aiming to foster economic growth and innovation. While navigating bureaucracy can still be a challenge, here are the key legal requirements for foreign entrepreneurs:

• Articles of Association: A document outlining your company's objectives, structure, and operational framework. These articles must be signed in the presence of a Notary Public, either in person, virtually, or through a designated representative.³
• Italian tax identification number (Codice Fiscale): All directors and shareholders must obtain a Codice Fiscale, a unique tax identification number issued by the Italian Revenue Agency.⁴
• Migration and residence permits: Non-EU foreign business owners seeking to live and work in Italy will need to obtain a Permit of Stay, which serves as proof of their legal status. This permit requires a valid passport, evidence of business establishment, and registration with the Italian Chamber of Commerce.⁵

Italy upholds the principle of reciprocity in international trade, ensuring that foreign citizens enjoy the same business rights in Italy as Italian citizens do abroad.

Choose a Legal Structure in Italy as a Foreigner

Selecting the optimal legal structure depends on various factors—some key factors to consider include:

• Liability: Do you want to protect your assets from business liabilities?
• Taxation: What are the tax implications for different structures?
• Capital requirements: How much capital are you willing to invest?
• Size and scope of your business: Is your venture a small startup or a larger enterprise?
• Plans: Do you intend to grow your business and potentially seek external investors?

The business structures you can choose for starting a business in Italy include:⁶

Sole proprietorship (Ditta Individuale)

• Best for: Ideal for solo entrepreneurs
• Pros: Offers simplicity, less costly
• Cons: Comes with unlimited personal liability for business debts

Limited liability company (SRL)

• Best for: Small-to-medium sized businesses
• Pros: Provides limited liability for owners, most common option for entrepreneurs
• Cons: Requires share capital (minimum €1 to €10,000) and potential contributions from directors

Joint-stock company

• Best for: Larger companies and involves issuing shares to the public
• Pros: Limited liability for owners and more credibility with investors
• Cons: Higher minimum share capital requirement of €50,000, more stringent reporting requirements

By understanding these aspects and seeking guidance from local experts, you can confidently embark on your entrepreneurial journey in Italy.

Obtain Licences and Permits for Your Business

The business licenses and permits for starting a business in Italy can vary significantly depending on several factors:

• Business type: Different industries have specific licensing requirements.
• Location: Some regions or cities may have additional local regulations and fees.
• Size of the business: Larger businesses with more employees or higher revenue might face higher permit fees.

While specific licenses vary by industry, all businesses will need the SCIA (Segnalazione Certificata di Inizio Attività). This self-certification permits the start of various business activities. It often requires accompanying documentation and compliance with specific regulations.⁷

You might also need authorization for specific activities or certain sectors, like food service, tourism, and healthcare, require special authorizations. if your business impacts the environment, you may need permits related to waste disposal, emissions, or resource usage.

What Documents Do You Need to Open a Business in Italy?

Italy welcomes entrepreneurs with a range of business opportunities. However, before you can join the ranks of successful Italian businesses, there's essential paperwork to gather. Understanding these requirements will help you navigate the process smoothly and efficiently.

Here are the key documents to opening your business:

• Identification documents: Passports for all company directors and shareholders
• Company registration documents: Articles of Association and Certificate of Incorporation.
• Codice Fiscale: Italian tax identification number for all relevant parties.
• Proof of Address: Business address in Italy.
• Business plan: A detailed overview of your business activities and financial projections.

To get your business up and going, you’ll also need a business visa.

How to Get a Business Visa in Italy

If you're a non-EU citizen, obtaining a business visa is usually necessary. Italy offers various options for your business visa, including:⁸

• Startup Visa: This visa is specifically designed for innovative startups. To qualify, your business must meet certain Italian law criteria.
• Self-Employment Freelance Visa: This visa is suitable for freelancers and independent contractors.

Each of these visas has specific requirements. However, there is a standard set of documents that everyone must have, including:

• An Italian visa application form
• Valid passport
• Civil status documents
• Travel insurance
• Proof of accommodation
• Proof of sufficient financial means

Additionally, business visa applicants may need additional documents based on their employment status.

The fees for a business visa vary depending on the type of visa and its validity period. The fee for a long-term visa valid from 91 days to a year is €116.

Tips for Opening a Business Account in Italy as a Foreigner

Gathering everything you need to open a business bank account is an essential step when establishing your company. Here are some key tips for opening a business account in Italy to ensure a smooth and successful process:

• Research banks: Find an Italian bank that aligns with your business needs. Consider factors such as fees, online banking services, international transactions, and customer support for foreign businesses.
• Get the required documents: Gather information for the bank you choose, including valid identification, proof of address, and business registration docs.
• Prepare for minimum deposit requirements: Some Italian banks may require a minimum initial deposit to open a business account. Ensure you have the necessary funds available to meet this requirement.

The process of opening a business bank account in Italy or any foreign country can take time and may involve multiple interactions. Be patient and persistent in following up on your application.

If your Italian business will require frequently sending money internationally, consider an account like Wise Business.

Discover Wise Business: The Easy Business Account for Foreign Business Owners

Setting up a business in Italy is complex enough for foreign entrepreneurs. But Wise is here to take the hassle out of getting a business account with Euro account details.

Wise is not a bank, but a Money Services Business (MSB) provider and a smart alternative to banks. The Wise Business account is designed with international business in mind, and makes it easy to send, hold, and manage business funds in 40+ currencies. You can get major currency account details for a one-off fee to receive overseas payments like a local. You can also send money to 160+ countries.

Wise Business is a great solution that caters to the needs of international business owners with:

• No monthly fees, allowing you to avoid unnecessary charges and save on your banking costs.
• International payments at the mid-market rate, getting you a fair exchange rate while minimizing conversion fees.
• Ability to receive payments like a local, making it easier for clients and customers to pay you.

With Wise Business, you can focus on growing your business in Italy while managing your finances hassle-free.

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Getting an Italian business account can take time and require in-person appointments, but with Wise Business you can register online, and get Euro account details with ease. With Wise Business, you'll have everything you need to manage your finances effectively as you navigate the exciting journey of starting a business in Italy.

Obtaining the Deed of Incorporation in Italy

In Italy, the formation of a limited liability company (SRL) requires the execution of a notarial deed, known as the "Atto Costitutivo." This legal document outlines the company's fundamental details, including its name, registered office, business purpose, share capital, and shareholder information.

The process of getting the deed of incorporation in Italy involves the following steps:⁹

1. Draft the deed: A notary public drafts the Atto Costitutivo with your help. This document must adhere to Italian legal requirements and include all necessary provisions.
2. Get it notarized: The founders sign the Atto Costitutivo and the notary verifies the identities of the signatories and notarizes the document.
3. Register it: The notarized deed is submitted to the Italian Business Register (Registro delle Imprese) at the local Chamber of Commerce. This registration officially establishes the company's legal existence.

After filing your incorporation deed, you’ll need to obtain a tax code from the Italian Revenue Agency (Agenzia delle Entrate) and register with the National Social Security Institute (INPS).¹⁰

Helpful Links for Starting a Business in Italy as a Foreigner

Here are some useful resources for further reading before embarking on your new business in Italy:

• Italian Chambers of Commerce: Local organizations that promote business and economic development, such as assisting with exporting and importing procedures.
• Italian Revenue Agency: The Italian government agency responsible for tax collection and administration.
• Italian Ministry of Foreign Affairs and International Cooperation: The Italian government ministry responsible for foreign policy and international relations.
• Invitalia: The Italian national agency for inward investment and economic development.

🔍 Read next:
8 Tips for Starting a Business in Another Country

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Sources:

1. The Chamber of Commerce of Milan Monza Brianza Lodi - Business Register
2. Ministry of Economy and Finance - VAT registration
3. Articles of Association - Italian Trade Registry Smart Portal
4. Italian American Citizenship Assistance Program - Italian Tax ID
5. U.S. Embassy and Consulates in Italy - Visiting/Living in Italy
6. Italian Company Formations - TYPES OF COMPANIES IN ITALY
7. The Chamber of Commerce of Milan Monza Brianza Lodi - SCIA – Segnalazione Certificata di Inizio Attività
8. Ministero degli Affari Esteri e della Cooperazione Internazionale - Visa for Italy
9. Italy Advisor - Deed of incorporation and memorandum of association of companies in Italy
10. Ministry of Economy and Finance - Incorporation and Registration of a Company

All sources checked July 2024.