Obtaining A Business License In Italy: The Ultimate Guide

Back to News

Obtaining a business license in Italy: what you need to know

Following the most recent reforms, opening a business in Italy has become more streamlined for foreign investors even though certain procedures are still required in order to obtain a business license in Italy. Despite images of red tape, high taxation and a stiff labor market, Italy remains a country that continues to offer excellent opportunities in many traditional sectors such as fashion, food, tourism, luxury real estate and newer ones such as ICT and renewable energy.

Who can open a business?

Foreign investors who want to set up a business in Italy must carry out some preliminary steps in order to find out whether they would be able to obtain a business license. Being an EU citizen is a big perk, since they do not need a residence permit to settle in Italy and can therefore obtain their business license easily.

Non-EU Citizens are still potentially eligible to set up their business, but they should first make sure they meet the two following conditions:

If they are settled abroad or if they are willing to settle in Italy, the first aspect to check out is if their home country meets the conditions of reciprocity, which means that a foreign citizen can set up a company in Italy if an Italian citizen can set up a company in the country where that citizen is from. American citizens won’t have to worry since reciprocity is most often met between the United States and Italy, but it can be more difficult to set up a business in Italy for citizens of other countries. A list of all the countries that meet the reciprocity requirement can be found on the official website of the Minister of Foreign Affairs.

If they are willing to settle in Italy, the second preliminary step to undertake is to make sure you are eligible for a visa, preferably issued for self-employment reasons, which is necessary to obtain a residence permit. It is pivotal to consider that the application for a self-employment visa and the following residence permit can take up to a year.

Preliminary steps

The first question to have clear in mind is the scope of business activity you would like to carry out in Italy since, for certain sectors, setting up a business is subject to the granting of licenses, authorizations and permits by the local Chamber of Commerce (Camera di commercio).

Once you have established the scope and the range of business activities to carry out in Italy, it is relevant to find out what kind of business model might suit your needs better. Every specific business structure differs on the risks you’re willing to bear and the amount of money you’re willing to invest.

A Società a responsabilità limitata (limited liability company) and the Società per Azioni (similar to a corporation) allow investors to be protected by the “corporate veil,” so that in the event of a crisis they will only lose the capital invested. This higher protection however comes at a higher cost in terms of initial investment and taxation. Another option is the Società a responsabilità limitata semplificata which requires a lower capital investment and has generally less red tape to deal with. In terms of unlimited liability companies, where the investors are personally liable for debts undertaken by the company, Italian law offers a wide range of business structures with easier and cheaper procedures to endure, known as società di persone.