Six procedures are compulsory to start a new business in Italy: depositing minimum capital, executing a public deed of incorporation, buying corporate books, paying a government grant tax, registering the company with the Chamber of Commerce, and notifying the local Labour Office. Italy ranks relatively low for ease of doing business due to its bureaucracy and number of procedures required. The main forms of business include sole proprietorships, partnerships, limited liability companies, corporations, cooperatives, and limited partnerships. Corporate income tax is 27.5% while VAT ranges from 4-22% depending on the good or service.

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DOING BUSINESS
IN ITALY
OVERVIEW ON THE ITALIAN CONTEXT
Eugenio Tonin – Matteo Biagini – Simone Iorio Gnisci

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ITALY IN BRIEF
n Capital: Rome
n Government type: Parliamentary Republic
n Area: 301.340 km2
n Population: ca. 61.50 million
n Average density: 189 people per km2
n Currency: EURO ( € )
n GDP per capita: ca. 34.000 USD
n GDP 2012: ca. 2.000 trillion USD
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3. +
ITALY IN BRIEF
20 regions, 110 provinces and 8092 municipalities
Every region has different:
n Culture
n Economic
n Politics
n North and the Centre: highly
industrialised with good
infrastructure and a highly trained
workforce.
n South: ranks low in these
characteristic indicators and
signigicant incentives are offered to
nvestors to develop in the area.
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START-UP STEPS
PROCEDURE TIME TO COMPLETE COSTS
1 Deposit at least 25% of the
minimum capital in cash with a
bank
1 day no charge
2 Execute a public deed of
incorporation and company
bylaws before a public notary
and pay registration tax
1 day (simultaneus with
previous procedure)
2.583€(Notary fees)+168€
(Registration fee)+156€(bollo)
3 Buy corporate books and
accounting books
1 day (simultaneus with
previous procedure)
14,62€ stamp fee for each 100
pages (3 books), 25€ registration
fee per book
4 Pay government grant tax to the
post office current account
1 day (simultaneus with
previous procedure)
310€
5 Register the Company through
Comunicazione Unica
2 days 200€(membership fees)+90€
(registration fee with chamber of
commerce)
6 Notify the competent Labour
Office of the employment of
workers
1 day (simultaneus with
previous procedure)
no charge
Six procedures are compulsory to start a new business:
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START-UP STEPS
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
ITA 23 13 13 13 13 10 10 6 6 6 6
GBR 13 13 13 13 13 13 12 12 12 12 12
DEU 45 45 45 24 18 17,5 17,5 14,5 14,5 14,5 14,5
POL 31 31 31 31 31 31 32 32 32 32 30
USA 6 6 6 6 6 5 5 5 5 5 5
0
5
10
15
20
25
30
35
40
45
50
Average Time to Start a Business
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START-UP STEPS
The Italian Constitution guarantees all citizens:
n the right to health in the workplace;
n the right to the pension and to the severance indemnity;
Two public institutions have been created to give effectiveness
to these rights:
n INAIL is the national health insurance institute for accidents
at work;
n INPS is the national social pension institute.
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START-UP STEPS
30 days after the begennig of the activity the company have to
communicate to INPS and INAIL:
n the type of activity exercised
n the name of the owner or the corporate structure of the
company
n the number of employees
Each year, the employer is required to pay into the INPS
account contributions for all employees. At any time, workers
have the right to verify their balance contributory.
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LEGAL FORMS OF DOING
BUSINESS
• Società
Cooperativa
• S.p.A
• S.r.l
• S.a.p.a
• S.n.c
• S.a.S
• Sole
proprietorship
Individual
Forms
Partnerships
CooperativesCompanies
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Individual form: Sole Proprietorship
LEGAL FORMS OF DOING
BUSINESS
n Is a type of business entity that is owned and run by one
individual and in which there is no legal distinction between
the owner and the business.
n The owner receives all profits and has unlimited
responsibility for all losses and debts. Every asset of the
business is owned by the proprietor and all debts of the
business are the proprietor's
n A sole proprietor may use a trade name or business name
other than his or her legal name.
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Partnerships
LEGAL FORMS OF DOING
BUSINESS
Snc
Società in nome collettivo or
General Partnership
• A partnership where all
partners are jointly liable for all
of the firm’s debts and
obligations.
• Formed by two or more
persons.
Sas
Società in accomandita semplice
or Limited Partnership
• Partnership with two different
categories of partners:
• Silent partners (soci
accomandanti): the liability is
limited to the extent of their
per capital contribution ;
• General Partners (soci
accomandatari): the partners
are jointly liable for all debts
and obligations of the
partnership;
• Only one partner is required
to be a general partner
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LEGAL FORMS OF DOING
BUSINESS
S.p.A
Società per azioni or Corporation
• Participant’s equity is
represented by shares
• Minimum capital
required is € 120.000
• Intent to limit the risk
• Legislation requires that
the powers are strictly
distributed among
different organs
S.r.L
Società a responsabilità limitata
or Limited liability company
• Capital stock is
represented by quotas
and not by shares
• Minimum capital
required for a S.r.l. is €
10.000
• Liability of the
shareholders to
creditors of the
company is limited to
the capital originally
invested
S.a.p.a
Società in accomandita per azionI
or Limited partnership by shares
• Combines some of the
features of both a
limited partnership and
a limited liability
company
• At least one member has
unlimited liability (socio
accomandatario)
• Liability of remaining
members is limited to
the extent of their share
capital subscriptions
(socio accomandante).
Companies
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n Formed to jointly manage a company that aims to provide
first of all to the same shareholders (mutualistic purpose)
those goods or services for the attainment of which the
cooperative is sort.
n The distinctive of all types of co-operative is summed up in
the fact that while the ultimate goal of both the company and
partnerships is the realization of profit, co-operatives have a
mutualistic purpose
n Minimum number to constitute a cooperative is 3 members.
LEGAL FORMS OF DOING
BUSINESS
Cooperatives: Società cooperativa or Co-operative company
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TOPICS ITALY (67) POLAND
(48)
UK (11) USA (4)
Starting a
business
84 124 18 11
Dealing with
construction
permits
101 104 26 30
Getting
electricity
86 138 64 13
Registering
property
54 63 71 24
Getting credit 105 3 1 3
Protecting
investors
51 51 10 6
Paying taxes 135 104 17 69
Trading across
borders
58 50 16 21
EASE OF DOING BUSINESS
Ranking of the most influencial factors of 189 countries
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CORPORATION TAXES
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IRES
Imposta sul reddito della società
Italian Income tax for corporate Income
• Established by Legislative Decree no. 344/2003
• Has replaced the corporate income tax and actually
entered into force January 1, 2004
• 27,5%
IRAP
Imposta sul reddito delle attività produttive
Italian tax for corporate revenue
• Established by Legislative Decree December 15, 1997
• 3,9%
• Charged on the net value production in commerce and
manifacturing
• 10% of IRAP can be duducted for IRES purposes
• Tax interests paid and payroll costs are not deductible
• Gross Turnover
+
• Increase in stock trade and work in progress
-
• Expenses of production (depreciation included)
=
• NETVALUE OF PRODUCTION

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CORPORATION TAXES
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n Two advance payments plus a balance payment
n The first advance payment (40% of the total) and tha balance
payment are due within the 16° day of the sixth month from
the end of the financial year
n The secod advance (60% of the total) is within the 11° month
of the financial year
n Advances are calculated on 100% of IRES and IRAP of the
previous fiscal year
Corporation Taxes Payment

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INDIVIDUAL TAXES
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n IRPEF: Imposta sul reddito delle persone fisiche, Italian Income tax for
personal Income
n As of 1° of January 2007, personal income tax is applied to individuals on a
progressive basis, with rates ranging
n In addition, a regional tax of up to 2,03 % and a local communal tax of up to
0,8% are applied on all individual’s income
n All employers have to withhold part of their salary and pay it to the TAx
Authorities
Annual Income in € Rate %
Up to 15,000 23
From 15,000 to 28,000 27
From 28,000 to 55,000 38
From 55,000 to 75,000 41
Above 75,000 43

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VAT
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n Standard VAT rate: 22% (1st Oct 2013)
n Reduced VAT rates: 10%
n Pharmaceuticals,
n Passenger transport
n Admission to cultural and entertainment events
n hotels, restaurants
n Reduced VAT rates: 4%
n Foodstuffs
n Medical
n Books

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BUREAUCRACY
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Indicator ITALY USA Germany Poland UK OECD
Procedures (number) 6 6 9 4 6 5
Time (days) 6.0 5.0 14.5 30.0 12.0 11.1
Cost (% of income per
capita)
14,2 1.5 4.7 14.3 0.3 3.6
Paid-in Min. Capital (% of
income per capita)
9,8 0.0 0.0 12.6 0 10.4
Coprruption Percetion Index
(0-100)
43 73 78 60 76 /
Transparency of Public
action in the economic field
3,2 4,0 4,0 3,7 4,0 /
Transparency of economic
policy
4,0 4,0 4,0 4,0 4,0 /
STARTING A BUSINESS
(RANKING) 90 20 111 116 28 /

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USEFUL TIPS
Where ever business takes you, learning the culture, etiquette and
protocol of the host country is a key step to success.
In Italy there are some unwritten rules that have to be followed
during a business relation. So keep in mind that:
n Public and private life are strictly linked (don’t be surprised if
you will be asked about your family situation during a formal
meeting);
n Italians prefer doing business with someone they know or have
introduced to;
n Italian lenguage is a must for communication;
n Italians give great importance to appearance (dress to impress);
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USEFUL TIPS
n Good manners and courtesy are essential;
n Moving away or keeping your distance can be perceived as
unfriendly;
n Mantain good eye contact to show you are sincere and honest;
n Never instill a sense of urgency to your presentation
(urgency=weakness);
n Show an interest in anything italian such as food, art, fashion and
sports;
n Italians are often guided by emotions and business relationship
are based trust (1° trust, 2° contract);
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