1LOCATION OF THE COMPANY-LTD-TUSCANY (ITALY)1.Taxa) FOR SELLING PRODUCTSThere are no taxes for selling products in Travel Agencies.b) FOR FOUNDING THE COMPANYIn order to found a Travel Agency direct and indirect taxes must be paid . These taxes must be paidevery year.Direct TaxesDirect taxes relate to the companys profitability, and are therefore calculated on the basis of thecompanys income. The main ones are:personal income tax (IRPEF): applied to revenues of sole proprietorships(43%);corporate income tax (IRES): applied to revenues of business corporations(27%);Italian regional tax on productive activities (IRAP): applied to sole proprietorships, partnerships andbusiness corporations (3.9% ).Indirect TaxesThese are taxes which are levied on capital when it is transferred or is spent .Value added tax (VAT): is levied on the added value of each stage of production and exchange ofgoods and services in Italy, at a standard rate of 21%.Registration tax: applied at the time of registration of documents for specific transactions (e.g.contracts, registered documents, etc.) at a fixed rate or one that is proportional to the specificcase(11%).Legal transcription fee: these are levied on transcriptions, inscriptions and updates in public propertyregisters which follow transactions, at a fixed rate or one that is proportional to the case (1%).Cadastral tax: these are levied on cadastral transactions following transaction, at a fixed rate or onethat is proportional to the specific case(4%).Municipal tax on property: is levied on the value of the property according to a rate set by themunicipality(4‰).
2Administrative ProceduresIncome tax returnThe owner of a Travel Agency submits an income tax return (single form), for each tax year, in whichit indicates its taxable income and the amount of tax (for IRPEF, IRES, IRAP and VAT) based on theincome and the costs recorded for the business year.Procedure Associated CostsDeposit at least 25% of theamounts contributed in cashwith a banknominal (bank commission)Execute a public deed ofincorporation and companybylaws before a public notary;pay registration tax3,638 € notary fees; registration tax isincluded in procedure 5.Buy corporate books andaccounting books14.62 € stamp fee for each 100 pages (3books), 25.00 € registration fee per book (3books)Pay government grant tax tothe post office current account310 €Register online with theRegister of Enterprises at thelocal Chamber of Commerce.168 € for registration tax and 155 € forregistration with the Chamber of Commerce(65€ for stamp fee and 90 € for electronicregistration) and 200 € (membership fees)Notify the competent LabourOffice (DPLMO) theemployment of workersno charge
32.PERMITSA) WHICH PERMITS ARE NECESSARYIn order to set up a Travel Agency in our area, a person has to submit the D.I.A. to the “Province ofPisa”, our District Authority. The D.I.A. is a document stating that the person has all the professionaland personal qualifications and requirements to set it up and the premises chosen have all necessaryrequirements, as well. It is also necessary to submit a certificate stating that the premises can beused as a Travel Agency and documents regarding the corporate details ( address of the TravelAgency, identity of the Technical Director, etc.) as well as the characteristics of the shop to beopened ( the plan of the premises and documentation attesting the right to use it for the intendedpurpose, its Land Registry certificate and safety and health certificate, etc.).As soon as the D.I.A. issubmitted, the Travel Agency can start its activity. The District Authority checks the D.I.A. and thedocuments submitted and gives its approval within 60 days. Before sending the D.I.A., a list of tradingnames chosen for the Travel Agency must be sent to the District Department and the DistrictDepartment chooses the most suitable trading name (different from the trading name of any otherTravel Agency operating in Italy) within 7/10 days.B) WHAT KIND OF QUALIFICATION IS NECESSARY TO GET IT.It is compulsory for a Travel Agency to have a Technical Director .In order to become a TechnicalDirector, you have to take an exam in various subjects such as Languages, Law, Economics, AirlineTickets, Accountancy and Geography. After passing successfully the exam, the District Departmentissues a certificate stating the person can exercise the profession of Technical Director of a TravelAgency and a personal Identification Card useful to exercise the profession of Tour Guide and TourOperator.C) TIME FOR GETTING THE PERMITSIt takes about 6 months in order to get all permits necessary to open a Travel Agency.D) COSTS FOR THE PERMITSIn order to set up a Travel Agency the applicant has to incorporate and register it online with theRegister of Enterprises at the Local Chamber of Commerce .He has to file a single notice with theRegister of Enterprises electronically. This includes issuance of the tax identification number, VATnumber, and registration with Social Security Administration (INPS) and Accident Insurance Office(INAIL).Total: 168 € for registration tax with Revenue Agency and 155 € or 185 € for registration with theChamber of Commerce (65 € for stamp fee and 90 € or 120 € for electronic registration with floppydisk) and 200 € (membership fees).A public deed of incorporation including the company’s bylawsmust be drafted and executed before a public notary by the quota holders or their authorizedrepresentatives. The notary drafts company bylaws on standard forms, which the notary provides. Thecost of the forms and stamp duties are included in the notary fees (3,638 € notary fees;registration).Registration tax, due within 20 days of incorporation, is paid to the notary public, whowill also provide the registered public deed of incorporation. A Government Grant Tax is due to theOffice of Revenue every year. The amount is 310 € or 520 € depending on the capital of the TravelAgency . The hiring of employees has to be notified to the Provincial Labour Office one day beforethe beginning of the labour relationship ( no charge).
4E) IT IS NECESSARY TO HAVE A BUSINESS PLANIt is not compulsory to have a business plan but it is advisable to have it.A Business Plan includes:Executive Summary1. Objectives2. Mission3. Keys to Success Company Summary1. Company Ownership2. Start-up Summary3. Company Locations and Facilities Services1. Service Description2. Sales Literature3. Fullfillment4. Technology5. Future Services Market Analysis Summary1. Market Segmentation2. Target Market Segment Strategy3. Market Needs4. Market Trends5. Market Growth6. Service Business Analysis7. Business Participants8. Distribution Patterns9. Competition and Buying Patterns10. Main Competitors
5 Strategy and Implementation Summary1. Value Proposition2. Competitive Edge3. Marketing Strategy4. Positioning Statement5. Pricing Strategy6. Promotion Strategy7. Distribution Strategy8. Marketing Programs9. Sales Strategy10. Strategic Alliaces11. Milestones Management Summary1. Organisational Structure2. Personnel Plan Financial Plan1. Important Assumptions2. Key Financial Indicator3. Break-even Analysis4. Projected Profit and Loss5. Project Cash Flow6. Project Balance Sheet7. Business Ratios
63. Financea. Interests on business loansInterest rates on business loans depend on the bank, the sum of money and the period. Now interestrates are very high because of the economic crisis. Banks do not lend money willingly and they ask forhigh securities for loans. The average interest rate is high and it is about 7% or 8%.b. Subsides (funding from governments)The Regional or District Authority usually offers training courses for the employees and for theTechnical Director of the Travel Agency. They never offer money. They can also offer grants to beused to update its technological equipment.c. Rules to get subsidiesThe rules to get subsidies differ from region to region and from province to province. In order to getfunds from the government the people who want to set up a Travel Agency have to apply to theRegional or the District Authority.d. Capital necessary for foundingThe capital necessary to set up a Travel Agency is generally from 8.000 € to 10.000 €, but it dependson the type, the size and the location of the agency.
74. Running CostsThere are various types of running costs per year:a. Costs for employee (1 high-trained person)The costs for a high- trained person is 1,560 € according to the Collective Labour Agreement for theTourism Sector.i. Average IncomeThe average income of a Tourism Sector employee is about 1,200 €.ii. TaxThe taxes an employer has to pay for each employee are very high, the rate that the employer has topay is about 33%.The employee pays a rate of 9% taken from his salary and paid by the employer to the INPS (theNational Institute of Social Security).iii. InsuranceAdequate means for life needs are guaranteed to every resident in case of accidents, diseases,invalidity, old age, and involuntary unemployment.INPS (the National Institute for Social Security) and INAIL (Workers’ Compensation Authority)carry out such functions. The two Bodies provide services such as pension, indemnity and allowance foraccidents, diseases, termination of work contract in case of reaching age limit or invalidity.Employee and employer contributions jointly finance social security costs, calculated on gross earnings.Employers pay two-thirds of contributions while employees pay the remaining third.INAIL manages mandatory insurance to protect employees against work accidents and occupationaldiseases.Compulsory insurance includes coverage in the event of damages incurred while commuting between theemployee’s home and workplace, or between different workplaces.The Italian compulsory state pension system is financed with social contributions paid by the employerduring workers’ working life.b. Cost to rent an office per m²Renting premises in San Miniato is about 18 € a month (per m²).If the premises are 20/ 25 m², the rent is 500 € a month.c. Advertising Costs•The Internet:There are two options:Option 1: a standard web page includes colourful graphics (photos, diagrams, maps, logos etc..)together with the text in Italian, English, German and French on separate pages. It may include anadditional photo-gallery. A standard web page has an internet address (URL). Every year the designand creation of a standard web page is 450 €. Every year a few photographs can be changed and thetext can be updated without any additional costs. The hosting fee is 168 € a year, starting from thedate on which the page is online.Option 2: Google Adwords*. Credits are given to the Agency. It may cost about 100 € a month.* Google Adwords You create ads and choose keywords, which are words or phrases related to your business. When peoplesearch on Google using one of your keywords, your ad may appear next to the search results. People can simply click on your ad tomake a purchase or learn more about you. There is no minimum spending requirement – the amount that you pay for Adwords isup to you. You can, for instance, set a daily budget of 100 euros and a maximum cost of ten cents for each click on your ad. Youare charged only if someone clicks your ad, not when your ad is displayed.• Magazines:The price for an advertisement in a magazine ranges from 30 to 100 €.
85.Rights for employees ( Hire and Fire )Labour is regulated by Italy’s Constitution, Civil Code, the Workers’ Bill of Rights and other relevantlaws and decrees. Employment terms and conditions are also periodically fixed by collective LabourAgreements within the various professional categories.HIREIndividual employment contracts must specify:1) the parties to the employment agreement;2) the starting date of the employment and the duration of the trial period ;3)the expiration date, if the employment is for a fixed term ;4) the salary, method for calculation of the salary, frequency of payment, and any particularterm or condition related to the salary and fringe benefits;5) the working hours;6) the annual entitlement to paid holiday leave; and7) the employee’s duties and the related work “category”.Fixed/Unlimited ContractsEmployment contracts can be executed for a fixed-term or for an indefinite period of time.Specific rules are provided by the law for fixed-time contracts.In addition, a fixed-term contract of employment may be renewed provided that a statutorily fixedperiod based on the initial term passes between the two contracts.Trial PeriodEmployment contracts can provide a trial period. During this period each party is free to terminate thecontract without notice and without the payment of any indemnity.The duration of the trial period is set by the applicable collective agreement (maximum duration being6 months).Pay and BenefitsThe average wage for an employee of a Travel Agency is 1,200 € a month.Collective Labour Agreements regularly define minimum levels of wages and indemnity benefits.Working TimeAveragely, 8 working hours per day are established.Holidays & VacationIn Italy there are 11 religious and national holiday days. The Constitution guarantees everyonethe right to one rest day per week (usually Sundays).Employees are entitled to an annual vacation period of 4 weeks.Absence from WorkEmployees are entitled to a leave for several reasons: sick leave , personal leave and maternity/parental leave.FIREDismissalUnder the Italian Law an employee is dismissible for:1) Just Cause :a serious breach by the employee of his/her duties or other behaviour that makes continuation of theworking relationship unfeasible;2) Justified Grounds:failure to follow important instructions given by the management,low performance3)An objective reason,whereby the employer needs to re-organise production or labour force.