Characterized by an extraordinary history and culture, as well as amazing architecture and landscapes, Italy is today one of the most visited places in the world. With a high standard of living, strong GDP, good healthcare and strong education system, Italy has been an attractive place to do business for many decades. If you are considering doing business in Italy, having the right partner to who has extensive knowledge on local laws and regulations can be essential to the success of your business in the region. INS Global has helped hundreds of businesses expand across the world.
Why Start a Business in Italy
As the world’s 8th largest economy and a good quality of life, Italy offers numerous opportunities for new businesses wishing to explore the region. Italy is also the 4th largest economy in the EU, providing a good place for businesses who plan to expand into the rest of the Eurozone region. Depending on the nature of your industry, the northern part of Italy offers a more developed and industrial economy than the south. Some of the major fields Italian companies have had success in include machinery, automotive, fashion, and food and beverage.
Public Holidays in Italy
- New Year’s Day
- Easter Monday
- Liberation Day
- Labor Day
- Republic Day
- Feast Assumption
- All Saints Day
- Feast of the Immaculate Conception
- Christmas Day
- Saint Stephen’s Day
The Italian legal system is based on civil law, with the primary source of law contained in 4 codes (civil code, penal code, civil procedure, and penal procedure). The highest court is the Supreme court (Corte Suprema di Cassazione), whose decisions guide lower courts.
Business entities in Italy
Limited Liability Company (SrL – Società a responsabilità limitata)
This is the most common type of entity in Italy for small and medium sized businesses. This type of entity requires at least 1 shareholder as well as a minimum investment of €10,000 ($12,000). A shareholder’s liability is limited to the extent of their contribution.
Joint Stock Company (SpA – Società per azioni)
A joint stock company is equivalent to a public limited company and is generally used by larger enterprises. This type of entity requires at least 1 director and a minimum capital investment of €120,000 ($145,000). For this type of entity there are 3 management structure options: i) a traditional board with 1 director; ii) a board of directors; iii) or a management board which has been assigned by a shareholder elected supervisory committee.
Limited Liability Partnership (Sas – Società in accomandita semplice)
For a limited liability partnership, the conditions are the same for a general partnership. In the partnership at least 1 partner must be limited and hold limited liability to the extent of their contribution. While the other partner must be a general partner and take full liability for the obligations and duties of the partnership.
General Partnership (Snc – Società in nome collettivo)
A general partnership requires at least 2 partners, who will be fully liable and need to manage responsibility. The partners in a general partnership can be natural persons or legal entities. There is no amount of required minimum capital investment to establish a general partnership.
Tax residence and tax system
An enterprise is considered a tax resident in Italy if its registered office, place of management, or principal business purpose is in Italy. Tax resident enterprises are taxed on their worldwide income, while non-tax residents are only taxed on their income sourced from Italy.
A non-tax resident company may be deemed resident if most of its assets are comprised mainly of units of Italian real estate investments or it is directly controlled by a resident Italian individual or company.
Corporate Income Tax in Italy is currently set at 24%, however banks and other financial institutions are subject to a corporate tax rate of 27%.
Employees in Italy generally have 8-hour workdays or 40-hour work weeks. Working hours should not exceed. The average amount of time working cannot exceed 48 hours (including overtime).
Overtime refers to any work carried out in excess of the normal working period. The overtime policy of a company is subject to agreement between the employer and employee. However, the amount of overtime hours cannot exceed 250 hours per year.
Employees in Italy are entitled to 26 days of annual paid holiday. Unpaid leave is not provided for in the statutes, however employees can negotiate this during their contract negotiation. The minimum prescribed leave cannot be replaced by payment in lieu unless the employment contract has been terminated.
Foreign Investment in Italy
There are no major restrictions on Foreign investment in Italy. The governing body who is tasked to maintain investments and trade relations is the Italian Trade Industry.
Healthcare in Italy
In Italy public healthcare is provided by the national health service known as Servizio Sanitario Nazionale (SSN). This system provides healthcare to all citizens and residents, free of charge. Public healthcare is adequate, and patients may be required to make small payments for tests, medication, surgery and visits to specialists.
European citizens who reside in Italy may benefit from a reciprocal agreement their home country made with Italy. These persons will need to apply for a certificate of entitlement to treatment before they travel to Italy. Non-European citizens will be required to have private health insurance cover before moving to Italy (they will be asked to furnish proof of their health insurance).
For those who reside in Italy and wish to take out private health insurance, they are able to do so. People who have private healthcare cover are able to visit doctors and hospitals of their choice. This grants them access to private hospitals and better-quality healthcare.
INS Global in Italy
INS Global is an HR solutions firm that specializes in PEO and recruitment. We offer high quality, efficient service, that allows our clients to expand into Italy seamlessly. Our client portfolio consists of businesses across a multitude of industries, that have successfully expanded across the world. Get in contact with us today and learn more about how we can help you.