Starting a Business in Italy as a Foreigner: An Expert Guide

Starting a business in Italy as a foreigner is a great chance to be part of a strong and growing economy. In 2023, Italy attracted over €22 billion in foreign direct investment which shows how open the country is to international entrepreneurs. Italy offers a skilled workforce, good infrastructure, and access to the entire European market, which makes attractive for anyone looking for a diverse place to do business.

To start a business in Italy as foreigner you need to follow specific steps such as choosing the right business structure, preparing important documents, and getting the required permits.

This article will explain everything you need to know about starting a business in Italy as a foreigner from business types to paperwork and licenses and more.

• Can I Start a Business in Italy as a Foreigner?
• Business Structures in Italy
• What Steps will be needed to start a business in Italy for foreigners?
• Documents needed to start a business in Italy
• Legal requirements for starting a business in Italy as a foreigner
• How much does it cost to start a business in Italy as a foreigner?
• Licenses and Permits Needed to Start a Business in Italy as a Foreigner
• How to Obtain the Deed of Incorporation
• Taxes on businesses in Italy

Can I Start a Business in Italy as a Foreigner?

Yes, you can start a business in Italy as a foreigner, but the process depends on whether you’re an EU/EEA/Swiss citizen or a non-EU national. Citizens from the EU, EEA, or Switzerland can freely establish and operate a business in Italy without needing a visa or residence permit, following the same procedures as Italian citizens.

Non-EU nationals, however, must first obtain a self-employment visa and a residence permit that allows for business activity. This involves presenting a viable business plan, providing sufficient financial resources, and securing authorization from the local Chamber of Commerce before applying for the visa. Once in Italy, non-EU entrepreneurs must register the business with the appropriate authorities, including the Chamber of Commerce, tax office, and social security institutions.

Business Structures in Italy

What steps will be needed to start a business in Italy for foreigners?

Starting a business in Italy is possible whether you’re from the EU or a non-EU country, but foreign entrepreneurs must follow specific procedures that differ from those for Italian citizens.

The steps below explain what you need to do, why each one matters, and how they apply specifically to foreigners setting up a business in Italy.

1. Choose the right business structure

The first step is to select a legal form for your business, such as sole proprietorship or limited company. The structure determines your liability, tax obligations, setup costs, and level of bureaucracy. For foreigners, some structures, like SRLs (limited liability companies), are more attractive to foreigners because they offer asset protection and make it easier to get a self-employment visa if you’re from outside the EU.

2. Obtain a Codice Fiscale (Italian Tax Code)

You must then obtain a personal tax identification number issued by the Italian Revenue Agency (Agenzia delle Entrate). This is required for almost every legal or financial transaction, including signing contracts, opening a bank account, or applying for a visa. You can apply for it at an Italian consulate abroad, or locally once you arrive in Italy. It’s the first thing you’ll need to do before registering a business or opening a bank account.

3. Apply for the correct visa or permit (Non-EU citizens only)

Non-EU citizens who want to start a business in Italy need to apply for a self-employment visa, which requires a business plan, proof of income, and approval from the Chamber of Commerce.

Other options include the Investor Visa also known as the Italy Golden Visa for those investing large sums in Italian companies. While the Italy Elective Residence Visa does not allow active work, it may suit passive investors. Additionally, the Italy Digital Nomad Visa allows remote work from companies outside of Italy but it does not authorize holders to actively start or operate a business within Italy. EU/EEA/Swiss citizens do not need a visa to start a business in Italy.

4. Register your business with the Chamber of Commerce

This step legally creates your business entity and places it in the official Registro delle Imprese (Business Register). You cannot conduct commercial activity in Italy without this registration.

For SRL or SRLS, you’ll need to draft incorporation documents (e.g., Statuto, Atto Costitutivo) and sign them with a notary. A local commercialista (accountant) often handles this paperwork and files it electronically. Once registered, your business receives a REA number and is legally recognized in Italy.

5. Get a VAT number (Partita IVA)

You will also need a tax ID number for businesses issued by the Italian Tax Agency. It allows you to issue invoices, charge VAT, and operate legally.

Having a Partita IVA is mandatory if you’re self-employed or running a company. You must also choose your tax regime, either the standard regime or the simplified flat-rate scheme (Regime Forfettario), if eligible.

6. Open a Business Bank Account

A corporate bank account used exclusively for business activities. It is required for handling payments, paying taxes, and (for SRLs) depositing the initial share capital.

Most Italian banks will ask for your codice fiscale, business registration documents, ID or passport, and possibly your residence permit for non-EU citizens. Some banks may require a business plan for non-residents opening an account from abroad.

7. Obtain any necessary licenses and permits

Another important step is legal authorization from the local Comune (municipality) to carry out your specific business activity. Without the proper licenses, your business may be fined or shut down.

• For retail, food service, tourism, or regulated professions, you must submit a SCIA (Certified Start of Activity) and comply with zoning, health, and safety regulations.
• Always check local requirements with your municipality or Chamber of Commerce.

8. Register with INPS and INAIL

A Social security (INPS) and workplace accident insurance (INAIL) registration is also needed. This ensures compliance with labor laws and covers you and your employees for pensions, benefits, and workplace injury.

• Self-employed workers must register with INPS and pay contributions based on income.
• If hiring employees, you must contribute on their behalf and register them with both INPS and INAIL before their first day of work.

9. Hire a commercialista (Optional but Highly Recommended)

A licensed Italian accountant who helps with business compliance is also highly recommended. Italy’s tax and business systems are complex. A commercialista ensures you meet all requirements, avoid fines, and stay up to date with filings. Having a local expert is especially valuable if you’re unfamiliar with Italian law, language, or tax systems. They can also help with visa paperwork, contracts, and local bureaucracy.

Documents Needed to Start a Business in Italy

• Valid Passport or Identification Document: Required for all founders, directors, and shareholders, especially for foreigners.
• Codice Fiscale (Italian Tax Code): This personal tax identification number must be obtained by all individuals involved in the business.
• Business Plan: Particularly important for non-EU nationals applying for visas or permits, it should outline the business objectives, market analysis, financial forecasts, and operational plans.
• Articles of Association (Atto Costitutivo) and Company Bylaws (Statuto): Required for incorporated entities (e.g., SRL, SRLS). These documents define the company’s purpose, governance, share distribution, and internal rules, and must be signed before a Notary Public.
• Proof of Address for the Business: You need to provide documentation verifying the registered business address, such as a lease agreement or property deed.
• Chamber of Commerce Registration Forms: Documents submitted to the Registro delle Imprese to officially register your business.
• Partita IVA Application: Application for the VAT number through the Italian Revenue Agency (Agenzia delle Entrate).
• Social Security Registration: Registration with INPS (National Social Security Institute) for pension and contribution purposes.
• Insurance Registration: If you plan to hire employees, registration with INAIL (National Institute for Insurance against Accidents at Work) is mandatory.
• Nulla Osta (Authorization) from the Chamber of Commerce: Required for non-EU nationals applying for self-employment or startup visas to prove business viability.

Legal requirements for starting a business in Italy as a foreigner

Italy has made efforts to simplify the business setup process and attract international entrepreneurs. While some rules still apply remains, the legal route is well defined.

These are the key legal requirements for foreigners starting a business in Italy:

Articles of Association: If you are setting up a company like an SRL or SRLS, you must draft the company’s founding documents, also known as the Statuto and Atto Costitutivo, which outline its purpose, structure, and operations. These must be signed in front of a Notary Public, either in person or via a legal representative.

Codice Fiscale (Italian Tax Code): All foreign shareholders, directors, or business owners must obtain a Codice Fiscale, issued by the Agenzia delle Entrate. This personal tax identification number is required for contracts, banking, and business registration.

Business Registration: The business must be registered with the Registro delle Imprese at the local Chamber of Commerce, which makes the company legally recognized in Italy.

VAT Number (Partita IVA): Issued by the Tax Agency, this number is essential for issuing invoices and paying taxes. It must be obtained before starting any commercial activity.

Social Security and Insurance Registration: Entrepreneurs must register with INPS for pension and welfare contributions and, if hiring employees, with INAIL for accident insurance.

Residence and Migration Permits for Non-EU Citizens: Non-EU nationals planning to live and operate a business in Italy must apply for a residence permit, known as Permesso di Soggiorno. This process involves a valid self-employment visa or startup or investor visa, proof of a registered business or business plan, authorization from the Chamber of Commerce known as Nulla Osta, and a valid passport with supporting documents.

How much does it cost to start a business in Italy as a foreigner?

The cost of starting a business in Italy as a foreigner ranges from €5,000 to €6,000 in the first year, depending on the business structure and professional services required. In the following years, the cost can drop to around €1,500 to €2,500 annually, covering ongoing legal, tax, and compliance obligations.

Licenses and Permits Needed to Start a Business in Italy as a Foreigner

To start a business in Italy as a foreigner, the licenses and permits you need depend largely on the type of business and its location. Here’s an overview of the common licenses and authorizations required:

Business License / SCIA (Segnalazione Certificata di Inizio Attività): This is a certified notification of the start of your business activity, which must be submitted to the local municipality. It applies to many commercial activities, including retail stores, restaurants, and services. Once submitted, you can start operating immediately unless the municipality raises objections.

Municipal Authorizations: Depending on the business sector, you may need specific permits from the local municipality, such as health and safety certifications, waste management permits, or opening permits for physical locations.

Professional or Sector-Specific Licenses: Certain professions or businesses require special qualifications or licenses. For example:

• Food and beverage businesses need health and hygiene permits issued by local health authorities (ASL).
• Tourism, travel agencies, and hospitality services require licenses from regional authorities.
• Construction and real estate companies may need urban planning or environmental agency authorizations.

Environmental Permits: If your business impacts the environment, you might need authorizations from environmental protection agencies, especially for waste disposal or emissions.

Special Permits for Regulated Activities: Some activities, such as alcohol sales, financial services, or transportation, require additional permits or registrations with national or regional authorities.

How to Obtain the Deed of Incorporation

The Deed of Incorporation (known in Italian as Atto Costitutivo) is a formal legal document that establishes a company’s existence under Italian law. It contains essential information such as the company’s name, purpose, registered address, share capital, founders, and the distribution of shares. Along with the company’s bylaws (Statuto), it sets out the rules governing the company’s structure and operations.

The Deed of Incorporation is a crucial step because, without it, the company cannot be legally recognized or registered in Italy.

• Draft the Document: The Deed of Incorporation and the company bylaws must be carefully prepared. This can be done with the help of a lawyer or notary, ensuring compliance with Italian corporate law and reflecting the specific agreements among founders.
• Sign in Front of a Notary Public: The document must be signed by all founding members before a Notary Public (Notaio). The notary officially certifies the signatures, verifies the legality of the document, and ensures all formalities are met.
• Notary’s Role: The Notary Public files the Deed of Incorporation with the Business Register (Registro delle Imprese) at the local Chamber of Commerce. The notary also confirms payment of the initial share capital, if applicable.
• Payment of Fees and Taxes: The notary will calculate and collect the necessary fees, including registration taxes and notary fees. These costs vary depending on the company type and share capital.
• Company Registration: Once the notary submits the Deed of Incorporation to the Registro delle Imprese, the company is officially incorporated and legally recognized. You will receive a registration number, which allows you to proceed with obtaining the VAT number and other necessary permits.

Taxes on Businesses in Italy

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Frequently Asked Questions about Starting a Business in Italy as a Foreigner

Can foreigners start a business in Italy?

Yes, both EU and non-EU foreigners can start a business in Italy. Non-EU nationals may need a visa and residence permit allowing business activities.

What business structures are available in Italy?

Common structures include sole proprietorships, SRL (limited liability companies), and partnerships. Each has different legal and financial implications.

How long does it take to register a business in Italy?

The registration process usually takes 1 to 2 weeks but can vary depending on the business type and location.

What documents do I need to start a business?

You generally need a valid passport, Codice Fiscale (tax code), articles of association for companies, business plan, and registration forms.

Do I need a visa to start a business in Italy?

Non-EU citizens usually need a self-employment or startup visa. EU citizens do not require a visa or residence permit.

Are there minimum capital requirements?

For SRLs, the minimum capital ranges from €1 to €10,000. Sole proprietorships have no minimum capital requirements.

How much does it cost to start a business in Italy?

Startup costs vary but typically range from €2,000 to €6,000 depending on business type and professional fees.

Do I need a business bank account?

Yes, opening a business bank account in Italy is mandatory for company operations and financial transactions.

What taxes apply to businesses in Italy?

Businesses must pay corporate tax (IRES) at 24 percent, regional tax (IRAP), and VAT on sales, among others.

Can I hire employees as a foreign business owner?

Yes, but you must register with INPS and INAIL for social security and workplace insurance before hiring.