Many people harbor dreams of moving to Italy, renovating a villa, and toasting the sunset with a glass of chianti. The Italian “pull factors” are indeed numerous. Throw in government incentives and the oft-repeated “one-euro home for sale” scheme (read the fine print!), and it’s easy to come up with many convincing reasons to move to Italy.
As a pillar of the G7 and a European economic mainstay, Italy has much to offer a foreign prospective business owner. Thinking of starting a new business in Italy? A little research goes a long way.
A KPMG report recently stated that “Made in Italy” is the third best-known branding in the world. Of course, this rings true for those thinking about food and fashion, but there are other notable Italian brands in the Automotive sector as well as emerging markets By establishing your startup in Italy, you will have the chance to leverage Italy’s most celebrated sectors, add value to your products and scale up your business. Compared to more celebrated global innovation hubs, Italian talent is available at reasonable costs.
At the risk of sounding clichè, it is pretty much true. Strategically situated in the middle of the Mediterranean, Italy represents the main thoroughfare linking Southern Europe to Northern and Central Europe by land. With the second highest road network and the fifth largest rail network extension in the EU to say that Italy is interconnected is an understatement. It is pretty much the center of the world, and for international businesses a convenient way to manage global timezones and communications across borders.
For those with distribution-driven business models, Italy is a gateway to 500 million consumers across the European Union and 270 million more in North Africa and the Middle East. Not to mention access to the domestic market, with 60 million residents, and to unique export know-how.
Corporates, business angels and VCs investing in Italian innovative startups can benefit from the second-highest tax relief in the European Union. Your startup can raise capital in exchange for shares through dedicated online portals, protected by an establish legal framework. In fact, Italy is the first country worldwide to introduce a specific set of regulations for equity crowdfunding and Italian startups benefit from flexible, tailor-made employment law.
Turin is rapidly emerging as a world-class destination in Italy for technology-based ventures.
The concept of reciprocity is a cornerstone of Italian international business. A foreign national who is not a resident of Italy may establish a new company in Italy only if an Italian citizen can likewise in the other country. If an Italian is restricted from investing in a foreign market, the citizen of that foreign country will correspondingly be restricted in Italy. An Italian attorney or notary can verify entrepreneurial reciprocity between the two countries, but this step is not necessary if the foreign investor is an EU citizen or if they hold a valid permesso di soggiorno in Italy. Reciprocity usually exists for U.S. citizens while for Australians and Canadians, this is less often the case.
Italy recently streamlined the procedures required to start and operate a business. Businesses may be operated either as a sole trader or as a company. A person can conduct a business as an individual by establishing a new company, or by purchasing shares of an existing company. That said, different legal structures exist for the establishment of companies in Italy:
In general, a partnership is not a legal entity but is still a company under Italian law.
The simplified type, or S.r.l., limited liability company was introduced as a way to encourage entrepreneurship by offering significant incentives, including: a minimum share capital from €1 to €9,999.99; the absence of notarial fees; and, an easier process to establish the business.
You can also hire EU nationals to work for your Italian company. You must obtain the proper visa for yourself if you plan to reside in Italy. Additionally, it is recommended that you retain a qualified commercialista to help you navigate Italian tax requirements.
This option is more expensive but may be right for some. After proving to the Italian consulate that you possess sufficient capital to invest, you incorporate a new company in Italy. At least €500.000,00 in capital must be designated to the company then purchase the quotas from the shareholders. This requires at a minimum two complex business operations: first, the incorporation of the new company; and second, the merger or acquisition with the company of the seller.
Startups have become a hot topic in Italy in recent years. While the Italian government maintains a dedicated website that describes public policies and visas for startups and non-EU citizens, how it works in practice is another matter.
Overall, the Italian Ministry of Economic Development maintains an excellent and thorough website in English through the Italian Trade Agency. The website provides a wealth of vetted information for doing business in Italy, including the application process, and listing all the required forms and documents for the Italian startup visa application. There is also an interactive map feautring incubator activity throughout Italy, including essential data about each business.
The Italian Startup Visa is available to non-EU innovators and entrepreneurs who are still residing in their home countries yet seek to join the Italian startup ecosystem to establish their innovative business and activity.
Startup entrepreneurs may submit their application directly to the Italian Ministry of Economic Development to apply for the Italian startup visa. These steps can all be completed from your current residence and submitted directly to the committee. After you apply, the Nulla Osta, or approval, will be issued, including a provisional police Nulla Osta document to aid your entry into the country.
If you are already supported by a certified startup incubator in Italy, they can help you with your application. The steps are similar but simplified.
There is a lot to love about Italy. The bureaucracy and administrative proceedings is definitely not one of them. With the advantages of setting up shop in this blue-ocean market, comes an equal amount of challenges. For those that are really looking to for a work-life balance, however, Italy is certainly top-notch. Not only can Italy serve as your next home-base, it can also be a great launching pad.
Dig-deeper into relevant topics about starting a business in Italy, and connect with qualified Advisors who can address your questions along the way.
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