Setting up a business in Italy

An overview of the process of starting a new business in Italy.

Legal requirements

Starting a new business means having a business idea translated into a concrete and structured business plan. Future entrepreneurs will first of all need to evaluate the feasibility of the entrepreneurial idea through a careful analysis of the product and of its reference market.

In evaluating the entrepreneurial idea, entrepreneurs can count on information and studies provided by the Chambers of Commerce, Industry, Handicrafts and Agriculture (Chambers of Commerce) as well as autonomous public bodies situated in each Italian province which provide information, assistance and support to businesses.

Setting up a business - Italian Chambers of Commerce

How to structure a business

After having evaluated the entrepreneurial idea, entrepreneurs must define the structure of the business according to their needs and type of activity carried out (commercial or non-commercial). A business can be divided into sole proprietorships or companies. In the second case, entire responsibility of the business, with its income and risks, falls on all partners.

Setting up a business: business organisations - Italian Chambers of Commerce

There are various statutory structures (types of business organisation) in Italy and entrepreneurs can choose the one that best meets their economic and fiscal requirements. According to the statutory structure adopted, a series of specific administrative procedures have to be met with a view to starting operations:

Partnerships

• Simple partnerships: aimed at carrying out farming activities, professional activities in associated form, or performing asset management. Simple partnerships must file, within thirty days of drawing up the Articles of Association, an application for registration in the Business Register.
• General partnerships: carry out both trading and non-trading activities. Set up by public or private deed, they must be registered in court. General partnerships must file, within thirty days of drawing up the Articles of Association, an application for registration in the Business Register.
• Limited partnership: established when financiers want to invest their capital in a business activity without taking any risk. They therefore entrust their assets for management to general partners, who have unlimited and collective liability with respect to the business activity. The directors have to file an application for registration in the Business Register within thirty days of drawing up the partnership's Articles of Association.

Business Corporations: (Stock Companies, Partnerships Limited by Shares, Limited Liability Companies) the exposure of each shareholder (except general partners) to the debts of the corporation is limited to the contribution each has made to the company. Within twenty days of drawing up the Articles of Association by a notary public, an application must be filed by the latter for registration in the Business Register. There are three types of Business corporations:

• Stock Companies: carry out business activities by using the capital contribution paid by shareholders to buy stakes, which have the same value and are represented by registered stocks. The legal establishment of a stock company requires the drawing up of a public record (by a notary public) and registration in the Business Register.
• Partnerships Limited by Shares: have the same features of Limited partnerships and stock companies. Shareholders are divided into two groups: general partners, who manage the company and have unlimited, collective and contingent liability; and limited partners, whose exposure to the debts is limited to the shares each has underwritten, and who cannot carry out management activities within the company.
• Limited Liability Companies: this statutory structure is usually adopted, instead of that of stock companies, for medium-sized businesses. The Articles of Association of a Limited Company, drawn up by a notary public, must be registered in the Business Register within twenty days of writing out.

Cooperatives: the main feature of cooperative societies (which must have a minimum of nine members) is that they serve the interests of their members, as opposed to being merely profit-oriented organisations. Their aim is not to make profit to be shared between all partners but to provide goods and services for partners at lower costs compared to market prices. Cooperatives must be set up by public deed and within twenty days of writing out the Articles of Association either a notary public or the cooperative's directors must register it in the Business Register. Entrepreneurs who wish to set up a business must seek a notary to formalise the setting up procedures.

Finding a notary - National Notary Association

As well as smooth start-up procedures, any successful new business requires a sound business strategy and secure financing.

Access to finance — Italy

Administrative procedures

Entrepreneurs must first of all obtain the necessary authorisations needed for the specific sector in which they operate. Certain businesses (for example pharmacies, taxis, tobacconists), need a municipal authorisation. Others (such as hairdressers and beauty parlours) need a specific degree, qualification or similar (such as registration in the Register of Tradespeople for catering activities).

Business activities requiring authorisations or licenses

Entrepreneurs who intend to set up a business must apply for VAT registration (Value Added Tax, a sequence of numbers identifying the person running the business for tax purposes) to the Value Added Tax Office of the Italian Revenue Agency. In order to do this, entrepreneurs must specify their business field.

Italian Revenue Agency [IT]

Classification of Economic activities Ateco 2007 - National Statistics Authority [IT]

Within thirty days of the commencement of trading, entrepreneurs must register with the National Social Security Institute (INPS) and the Business Register.

National Social Security Institute (INPS) [IT]

In order to register in the Business register entrepreneurs must contact the Chamber of Commerce of the Province in which the enterprise is located. Chambers of Commerce have local jurisdiction.

Business Register - Italian Chambers of Commerce

Single entrepreneurs must submit the "I1" form. Partnerships must submit the "S1" or "S5" forms.

Insurance

Businesses which are at risk of incurring work-related accidents (i.e. those that include potentially dangerous machinery and equipment), must register with the Italian Workers' Compensation Authority (INAIL). Within a maximum of five days from the beginning of the activity, employers must supply all employees with insurance.

Businesses and social security contribution - National Social Security Institute [IT]

Italian Workers' Compensation Authority

Dealing with administrative procedures

Italy is gradually introducing online programmes to facilitate administrative procedures. However, to apply for VAT registration it is still necessary to go to the specific office within the Italian Revenue Agency.

Italian Revenue Agency - Offices [IT]

Businesses must submit all the necessary documentation for declaring business start-ups online, using the Telemaco service. Individual entrepreneurs must instead submit paper documents.

Telemaco service [IT]

In the near future business will have to carry out all administrative procedures regarding company start-ups via a centralised internet-based procedure, called "Comunicazione Unica". This will include procedures related to taxes, social security, welfare and advertising. At present it is being tested by a number of Chambers of Commerce.

Introduzione alla Comunicazione Unica [IT]

Programmes

Programmes set out by the Ministry of Economic Development provide incentives for setting up businesses and promoting youth and women's entrepreneurship. These mainly consist of financial support instruments and subsidised loans.

Financial incentives for businesses - Department of the Treasury [IT]

Financial incentives for businesses - Ministry of Economic Development [IT]

The National agency for inward investment promotion and enterprise development promotes and finances investment programmes submitted by existing businesses or start-ups.

National agency for inward investment promotion and enterprise development [IT]

There are numerous economic incentives provided by local (provinces, municipalities, Chambers of Commerce, regions), national and European funds. They are allocated to businesses according to the sector in which they operate.

Personalised help and advice

The Chambers of Commerce, which are found in every region, assist entrepreneurs in administrative procedures aimed at company start-ups. There is a full list of local offices on the Chamber of Commerce website.

Chamber of Commerce

The Enterprise Europe Network provides businesses with information and advice through its local partners.

Enterprise Europe Network – contact points – Italy

SOLVIT helps businesses deal with problems that arise when national authorities wrongly apply EU market rules.

SOLVIT – contact points – Italy

Source: European Commission