How to start own business
Italy has long been a premier tourist destination, but in recent years it has become ever more enticing as a destination for small businesses. The power of the ‘Made in Italy’ brand carries immense respect in a number of fields, particularly in food and drink, fashion and crafts. The economy has also begun to broaden and has posted strong showings in the last three years under its new government, ending a previous triple-dip recession.
Starting a small business in Italy is a popular past-time, with more than 3 million SMEs employing 50 people or fewer. There are a number of incentives and support structures available, and the fourth largest market in Europe to take advantage of. However, the substantial amount of bureaucracy and paperwork, all of which has to be dealt with in Italian, can put some business owners off. While many businesses in Italy now conduct their operations in English, the process of starting a small business in Italy is still complex. Everything including the online single point of contact is conducted in Italian, and several steps must still be undertaken by yourself or a representative in Italy.
Most small businesses will choose to incorporate as a limited liability company, known in Italy as an SrL. This requires a minimum share capital of 100,000 EUR, to be deposited in an Italian bank account. Italian banks are not known for giving out loans easily, so you will want to have this available up front. While you are not obliged to draft a business plan as part of the formation process, you will still want to put one together. Starting a business anywhere is a complex process, but the extra pressures of expanding to a new country mean you will want to be as organised and rigorous as possible.
Next you’ll need to draft and submit your Articles and Memorandum of Association, along with your company bylaws. These will have to be executed by a public notary, to which you will also pay the requisite registration fees. These will include a set incorporation fee of 356 EUR, as well as notary fees in the region of 1% of your business’s initial capital. You are also required to keep certain books for accounting and meeting minutes, although most businesses now choose to log this information online. Authenticating these books requires another modest flat payment.
A number of forms must then be attached to a notice of registration, which is filed with the Registro Imprese (Register of Enterprises). This process ensures that your business is registered with key services, providing you with a VAT and tax number after 2-5 days. An official email address must also be registered, and made publicly available alongside your business information.
Once all documentation has been sent and confirmation received, you are more or less ready to go. All that remains is to notify the Centro per l’impiego (Labour Office) a minimum of one day before hiring workers. You should now begin the process of setting up the premises, marketing, and all the other requirements needed to make a small business a success.
Italy is home to a wide variety of business types, covering the full gamut of industry, agriculture and luxury goods. The country is among the most prolific producers of cars and wine in the world, holds an extremely strong and varied manufacturing base, and maintains the world’s third largest gold reserve. These factors, along with the sunshine, mean Italy has the eighth best living standards in the world. The biggest opportunities in 2017 are still those that capitalise on Italy’s core strengths of prestige and tourism, but which offer a new, modern twist on an existing formula. Popular choices at present include perfumeries, hotels & B&Bs, catering, property investment, and businesses relating to specific trades and skills, such as a dentist’s surgery. Many entrepreneurs looking to start a business in Italy cater exclusively to the country’s large expatriate population, or to potential expats. This includes translation and relocation services, importing ‘home comforts’, and advisory services, ranging from teaching languages to offering support and advice for new arrivals.
Foreign investors are free to adopt any form of business investment in Italy, and may acquire a stake in or take control of a company which has already been set up. Selling business to Italy is best done by delegating an agent or distributor. However, caution must be taken in planning a written contract, probably best overcome with the assistance of a professional advisor. Verbal agreements can also be held good at law. Furthermore, it is not advised that you enter into contracts from a distance or on the foundation of meeting on neutral territory. Make sure you are familiar with your representative, his capabilities, assets (offices, staff, etc), customer base and industrial relations.
Setting up business in Italy should be approached similarly to any other developed and competitive market. Exporters need to be aware of cultural differences. Generally speaking, you need to develop an effective and reliable business relationship at a personal level. Vital personnel should be involved from the start and must be of a quality sufficient enough to converse with their Italian counterparts. Businesspeople should find a way to communicate in English, whether written or spoken. Major businesses will have staff on all levels that are fluent in English, and English is more common in the business sphere than in the public.
Inaugural correspondence, as well as product literature and tender documents, should be translated into Italian by a professional, and ideally followed with an e-mail or telephone call. There are many business schools that can offer placements to aid you with this. Additionally, using the Italian language in documents, such as invoices, will help to clarify your intentions and eliminate confusion or misunderstanding.
Essential for companies is getting a product or service to the market on time. The main options for this are:
- rail and air-freight
- post, air parcel post or express/courier services
All these methods, of course, are dependent on the product requirements for time, expense and safety.
Italy generally has a sound transport infrastructure; although heavy traffic occasionally causes bottlenecks in and around the main northern and city centres. This can often lead to severe traffic limitations, making local delivery arduous. Heavy goods transport on motorways in is usually limited or sanctioned on Sundays and some public holidays. Infringement of this rule can at times lead to heavy fines, confiscation of driving licences and impounding of the vehicle. Freight transportation companies should also be alert of becoming the innocent targets of smugglers (i.e. drugs and tobacco).
Italian State Railways offer an inexpensive and reliable means of passenger transportation. Commercial freight is foremost carried by road, but the railways are also taking increasingly more long distance goods. Although, beware that some international rail freight services from have been the subject of infiltration by illegal immigrants travelling via to.