Wednesday, January 19, 2022

Starting a business in Italy is still convenient in 2022

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Thanks to the EU’s immigration, trade and commercial law policies, a non-resident foreign citizen can establish a company, open a bank account, register a trademark, sign commercial agreements in Italy, both by applying for a working visa, or by entrusting a business partner with the task of founding a company in Italy. For more details about the costs of registering a foreign company or founding a company in Italy, International Law Firm Damiani&Damiani provides consultancy to start a business in Italy as a foreigner, as well as fiscal advice on how to pay taxes on profits for the main company in its country of residence, and for the subsidiary company in Italy.

Why it is useful to start a company in Italy

To be able to trade between the company’s country of origin and Italy, it is advisable to gain knowledge of the laws and rules concerning import and export of merchandise, double taxation system, and how to register a company in Italy. Before knowing how to open a company or a branch in Italy, however, it is important to understand why. There are several reasons why a third-country company might want to extend their business in Italy:

  • the Italian market is one of the most active in Europe. After the first covid wave in EU, it was one of the few markets to register rates of economic growth at 4.7% in 2021;
  • since 2010, the foreign market in Italy is experiencing growth, following the recovery of domestic consumptions after the crisis of 2008 and the emerging of new external markets;
  • Germany and France are Italy’s main export destinations, followed by China, Russia, USA and Switzerland;
  • Italy and France have recently signed an important agreement to exchange knowhow, facilitate trade between the two countries, and find a common solution to the problem of illegal immigration;
  • the UK is one of the most interesting countries, although Brexit has over-complicated and over-priced all import/export procedures with the EU.

Costs of opening a foreign company in Italy

Given these general data, it is not difficult to imagine, according to the nature of your business, what the most interesting market to conquer is. The procedures to establish a company in Italy are not expensive. The shared minimum capital of a joint-stock company is 50,000€. A limited company is required to have a shared minimum capital of 10,000€, out of which only 2,500 must be deposited before registering the company. The capital must be deposited on a corporate bank account before the company is registered at the Italian companies’ register (Registro delle Imprese). After the registration, the new foreign company in Italy will be provided with an incorporation act, taxpayer code and VAT number - all fairly rapid bureaucratic procedures. Alternatively, it is possible to open a representation office of the company in Italy, a subsidiary company or a company branch.

It is possible to found a foreign company in Italy through a partnership

In order to create a company in Italy, it is possible to enter a partnership through a so-called società in nome collettivo (general partnership), whereby all partners are responsible with their own capital for the company’s debts, or alternatively through a società in accomandita semplice (limited partnership). Other than that, the Italian law indicates capital companies, which can be società per azioni (joint-stock companies), società a responsabilità limitata (limited companies), or simplified limited companies. Such company models operate in different production fields. Their main element is the partners’ stock capital. The shares in such companies are represented by stocks or company shares. Cooperative companies are also categorized in capital or stock companies. They are founded in order to collectively manage a business providing its own partners with the goods or services produced.

To open a business in Italy it is advisable to consider logistics

In case these few but crucial data were not enough to convince you to open a foreign business in Italy, you might want to consider up to what extent logistics can help you save on your company’s expenses to reduce customs, check exports, increase the business’ competitiveness within the international market. Italy features central ports on the most important commercial routes of the Mediterranean, as well as being connected by land with all the most important destinations in the EU. One of the most successful businesses by foreign companies operating in Italy is actually that of shipping brokerage, i.e. maritime intermediation for shippings.

The most interesting markets for a foreigner wanting to crate a company in Italy

For a foreigner looking to open a business in the EU, Italy represents an important country. Fashion is one of the most interesting markets, having established in the last decades the value of the Italian brands among customers abroad. According to the data provided by the Italian Chamber of Fashion’s official page, exports volumes have been constantly increasing between 2012 and 2019. Data show that the biggest export markets for clothing are Germany (688 million dollars), the UK (529 million dollars), France (400 million dollars) and China (392 million dollars).

The real estate market in Italy

An update on commercial real estate can help to really understand how convenient it is to fund a company in Italy. Real estate experts in Italy have gathered at the MAPIC 2021 event. Despite it being held in a toned-down version because of covid restrictions, the atmosphere has been positive. Market operators wanted to meet in person, chat, and create new business opportunities. Retail has been the sector most affected by the pandemic. In the last 20 months Italy has been subject to Sunday closures, travel restrictions and shop closures, which all had a strong impact on the numbers of customers and sales. Shopping centers have shown a 34% decrease in visits in 2020 compared to the previous year, and a 30% decrease in sales, compensated by the change in purchase behavior, migrated from retail to digital.

Retail and large distribution in Italy

Despite the last two years’ contraction due to the pandemic and the consequent investors’ disinterest towards the retail industry, the softening of covid-containment restrictions has immediately shown that Italians have come back to shops, and new tendencies have emerged, showing an increase in offline retail shopping. A recent analysis by Coldiretti/Censis based on ISTAT data from last October shows the first decrease of 3.7% in online sales, whereas physical shops have increased their sales of 5.8%. It is estimated that with the reopenings, more than 64% Italians have moved part of their purchases from ecommerces to traditional shops.

If you are a foreigner and wish to establish a company in Italy, you have good reasons to do so. Starting a business in Italy as a foreigner can definitely be a smart investment.

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