Being self-employed and having your own source of income, your own business, is the dream of many, doing this living abroad is even more so. Today we will talk about how to open a company in Italy. The type of company you will open will depend mainly on your annual turnover.
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Which professional should I hire to open a company in Italy?
In Italy there are several types, categories and subcategories of legal entity, in Italy it is called ‘PARTITA IVA’. When you open a company, you are opening a partita iva. I can already tell you that you cannot do this on your own. If you are starting to think about opening a company in Italy, you need to hire a professional that is called ‘COMMERCIALISTA‘, which is nothing more than an accountant, and he will help you in deciding the best company option for you and in opening the partita iva itself.
It is very important to make this clear, in no way, this article can replace the hiring of a professional to help you in all the processes for your specific case. Here you will learn a little better how opening a company works in practice. So the first step is to hire a commercialist.
What are the main categories of company in Italy?
There are two main categories of company that you are likely to fall into when opening your own business, and they are:
- Libero professionista: The free or self-employed professional.
- Ditta individuale: It is the individual company.
In the first option, which is freelance professional, fit all service providers who do not necessarily have a physical location to work. It is very simple to differentiate between self-employed and freelance professionals, because self-employed professionals are all service providers who do not need a degree or a specific qualification in order to work in their field. This is the case of professions such as plumber, electrician, bricklayer, painter and even sales representative, for example.
Liberal Professional ‘Libero Professionista
On the other hand, the “libero professionista”, which is nothing more than a freelancer, is every service provider who, in order to be able to work in that area, needs a specific degree and an inscription in some kind of register. In Italy this type of professional is called intellectual professional (professionista intelletuale) precisely because it is required a formation in that area. This is the case of the accountant, the notary, the architect, the lawyer, even the lawyer is a good example because it is a profession that needs to have a registration. In Italy, all these intellectual professions are called that because they need to register.
It is very simple to identify what type of worker you will fit into, whether you will be self-employed or a free-lancer. The two main advantages of this type of partita iva are the opening of a company, which is a very simple process, and the tax regime, which can have many discounts and advantages depending on the amount of turnover. For this case, the tax regime can be ordinary, which is the traditional one, or flat-rate, which is the one that has more advantages and more discounts in the payment of taxes.
Individual Company ‘Ditta individuale
The second category of company you can probably fit into is the ‘ditta individuale’, which means sole proprietorship. This type of company is open to all those people who want to be self-employed, autonomously, but want to have some kind of physical business. The self-employed person who wants to open a bar, an ice-cream parlour, a restaurant, a salon, a warehouse, any type of physical business without any partner, will probably fit into this sole proprietorship, of course, always considering the amount of turnover and this will be assessed by the accountant himself.
INPS and INAIL in Italy
Different from the first category, in this case the process of opening the company is a little more complicated because it requires more documents to be presented.
The first reason is that you need to register that company with the companies register.
The second reason is that the tax regime will be the traditional ordinary regime, that is, it will not have any type of discount in the payment of taxes and duties.
The third difference is that in this case you need to register with certain public bodies such as the INPS (https://en.wikipedia.org/wiki/Istituto_nazionale_della_previdenza_sociale Istituto Nazionale della Previdenza Sociale), for example for the payment of pensions, and the INAIL (Istituto Nazionale per l’assicurazione contro gli infortuni sul lavoro).
What is the ‘Codice Ateco’?
For all these reasons the process is a little more bureaucratic and time consuming. One of the main things that you will do in both cases right at the beginning of the process of opening the company is the definition of the ‘CODICE ATECO‘ (Economic Activity Code). The Codice Ateco is nothing more than a code that identifies each specific type of company and defines what that company can do or sell or offer as a service. This is a very strict type of thing in Italy and there is control over this in companies, that is why a salon, for example, cannot sell sweets, because the definitions of what a salon can do and offer as a service do not include the sale of food.
And it is the same for many other types of businesses, from the application until you receive your partita iva, the deadline is very short, it’s very fast, it’s only 24 hours. But don’t be fooled, before that there is all that study and evaluation done with an accountant, what type of company you are going to open, what ‘codice ateco‘ you are going to have, and from the moment that everything is defined you will request your partita iva. From that moment on, within 24 hours you will have your code in hands.
What is the cost of opening a company in Italy?
Another great advantage besides the short deadline, is that the opening of the company itself is totally free, the other costs you will have will be additional costs, such as the monthly fee of your accountant, the monthly fee of the electronic invoicing system to issue your invoices (in Italy it works through a system), the licenses if you need them to work, the registration in the companies if you are a sole proprietorship, and obviously all the taxes and duties related to your company.
If you think about having your own business, your own source of income in Italy, I hope this article has helped you. Any questions and clarifications, leave your comment here below.
