Reasons to invest in Italy
- Doing Business in Italy
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The attraction of foreign investments in Italy has always been one of the priorities of the Italian government. Investing in Italy allows you to access a wealth of intellectual and specialist knowledge in all fields and exceptional know-how in strategic sectors where Made in Italy is a pioneer throughout the international market.
Among the most coveted sectors are the agri-food sector, the production of oil and wine, fashion and design, the automotive industry, automation and machinery. Furthermore, recently, Italy has expanded its borders to foreign investments even in sensitive sectors such as networks, telecommunications and energy. Finally, even the Italian tourism sector has always been considered a strength: Italy ranks first in the UNESCO ranking by the number of sites and fifth in tourist destinations globally (UNWTO 2018).
From a legal point of view, the non-EU foreign citizen who wants to be self-employed in Italy or wants to set up a company must wait for the Flows Decree (Decreto Flussi) issue in Italy. This decree, issued periodically by the Council of Ministers, establishes the entry quotas for non-EU foreign citizens who can enter Italy for self-employed, subordinate, and seasonal works. In the context of self-employed workers, the Decreto Flussi includes the following categories: entrepreneurs who intend to implement an investment plan of interest to the Italian economy, which provides for the use of own resources of no less than 500,000 euros, as well as the creation of at least three new jobs; freelancers who intend to exercise regulated or supervised professions, or profession unregulated but represented at national level by associations registered in lists kept by public administrations; holders of corporate administration and control positions expressly provided for by the interministerial decree of 11 May 2011, n. 850; well-known artists or artists of high and renowned professional qualification, hired by public or private bodies and foreign citizens who intend to set up "innovative start-up" companies who have requirements defined for by the same law and who are holders of an autonomous employment relationship with the company. Otherwise, executives or highly specialized personnel of companies with headquarters or branches in Italy or representative offices of foreign companies that have their primary place of business in the territory of a member state of World Trade Organization, or managers of principal offices in Italy of Italian companies or companies of another EU member state. In these cases, the regulatory reference is art. 27 of the Consolidated Law on Immigration (Testo Unico sull’Immigrazione).
The issue of the Flows Decree is preparatory to the entry visa request. In addition to the point of the Decreto Flussi, the non-EU foreign citizen must own further moral and professional requisites, demonstrate that they have accommodation, and have an annual income of an amount higher than the minimum level required by law for the exemption to health expenditure.
As an alternative to the Decreto Flussi there are other legal instruments that help to become entrepreneurs on the Italian territory. For example, it is possible to open a secondary office of one's foreign company with a stable representation on the Italian soil , or it is possible to set up a representative office of the foreign company in Italy. Finally, it is possible to establish a subsidiary in the Italian territory or a company or an entity with complete legal autonomy.
Suppose you opt for the start-up of a secondary location of your foreign parent company with permanent representation in Italy, also called Branch. In that case, the company must be identified in the territory through the figure of the commercial representative, and must be registered within the competent Register of Companies. To proceed with opening an additional office in Italy, it is necessary to be assisted by professionals, such as an expert lawyer in the field. Once you have obtained the VAT number and the tax code of the company, it is sufficient to communicate the start of the activity (SCIA) before being able to operate as a subject resident in Italy for all legal purposes. The secondary office of the foreign company present on Italian territory is not liable for civil liability, which falls exclusively on the foreign parent company. Otherwise, the secondary office of the foreign company in Italy has full personality from a fiscal point of view for the italian tax authorities.
If it is considered more appropriate to open only a representative office of the foreign company in Italy, the procedure to be addressed will be more straightforward. First of all, it is essential to emphasize that the representative office can only pursue purely and exclusively promotional functions, carrying out only a preparatory activity for the possible opening of an operational branch. In this case, the secondary office can be established with the simple opening of a local unit, and this means that there is no need to use a notary. Furthermore, the Branch with purely promotional functions is not a fiscally relevant subject on the Italian territory, and for this reason, it will not be able to issue invoices.
From a bureaucratic point of view, there are a series of mandatory steps to be taken to start a business in Italy, and these are:
the opening of a VAT number at the VAT office,
the registration of the company in the Business Register at the Chamber of Commerce,
the registration with the INPS for social security contributions and
the communication to the Municipality of the beginning of the activity (SCIA).
Finally, if you want to use Italian personnel, the process of hiring depends on the continuity you want to give to the collaboration. In Italy, you can strictly use the word hiring only for employees. In all other cases, it is a question of collaboration. Obviously hiring a worker has a much higher cost than signing a contract with a freelancer: in the first case you have to consider the employer's obligation to pay contributions aimed at ensuring the worker in periods of absence from work due to illness, accident, maternity, or retirement purposes.
Avv. Cristiano Cominotto – A.L. Assistenza Legale