Work & Business

Be your own boss: start a new life as entrepreneur or freelancer in Italy

The last years’ events have significantly shaken up the labour market in Italy. After a period of crisis that has severely challenged businesses and freelancers, we are now witnessing a desire to reinvent one's work environment: there is a perceived shared urge to abandon the usual life as an employee – the typical 9-5 in the office - to devote oneself to personal projects at a more flexible and less encased pace.

This is done by choosing the path of freelancing or entrepreneurship, by founding a small business, or even opting for a remote job and becoming a digital nomad. Despite the still uncertain and changing historical period, this may be the best time to follow this path in Italy.

In fact, many of the current opportunities were not viable until just a few years ago: the pandemic has greatly accelerated the digitalisation process. This has occurred thanks to a mindset change and especially to the many incentives part that make up the National Recovery and Resilience Plan, or PNRR, which were introduced to encourage digitalisation in Italy.

According to the Ministry of Economy and Finance's VAT Observatory, 549,500 VAT were opened in 2021, registering a +0.7 % increase compared to 2019 (thus pre-pandemic period).

The number of foreign VAT holders in Italy is also substantial and is up 0.5% compared to 2019 (source: finanze.gov.it).

As for the new category of workers known as "digital nomads" we already have a substantial representation in Italy. According to the first report on digital nomadism in Italy that analyses 2021 data (source: nomadidigitali.it), digital nomads or would-be digital nomads are not only the very young as one would assume but most  are 30 – 49 years old. 23 % of the respondents already call themselves digital nomads and 64 percent expresses a desire to become one, confirming an increasing interested in this lifestyle.

Being freelancer or setting up company?

So far, we have explored the freelancing world in Italy, but in practical terms, how does one get to become a freelancer or entrepreneur? First of all, there are two paths that can be followed: either

• open a VAT number and work on your own as a freelancer, or
• open a real company.

Opening a company, in fact, does not necessarily imply having numerous employees and a large turnover: it is possible to set up a srl (equivalent to llc: limited liability company) or srls (simplified limited liability company) which provide a rather streamlined opening procedure, with low costs and an initial share capital that can be as little as 1 euro.

Freelancers and sole proprietors compared

A VAT number is used to open any business, either as a freelancer or as a founding entrepreneur of a company. Depending on the type of business you are going to run, you can set up a sole proprietorship, intended for self-employed people employed in manual activities (such as tradesmen or artisans) or you can operate as a freelancer employed in so-called intellectual activities.

The latter are divided between Regulated profession (such as lawyers, journalists, solicitors) and unregulated profession (such as translators, developers).

In the case of the self-employed, unlike the sole proprietorship, it is not necessary to register with the Registrar of Companies. The differences between the two categories, however, are mostly related to the social security issue and taxation, which is good to investigate together with your local accountant.

In both cases, for entrepreneurs and those foreign freelancers who intend (or have to) apply for an Italian tax code and move their tax residency to Italy, there is a special flat tax, or flat-rate regime that facilitates new openings (for the first 5 years tax consists in only 5% of the yearly revenues, if the annual revenues do not exceed EUR 65,000).

Simplified limited liability company in Italy: advantages and disadvantages

Once you have opened a VAT number, you may also decide to register a real company, which will have to be registered with the Registrar of Companies. The SRLS is inflexible but less expensive than other types of companies, since the standardised articles of incorporation keep notary fees low. The share capital ranges from a minimum of €1 to a maximum of €9,999. At the level of management costs and opening procedures, SRLS and SRLs are equivalent. 

However, if we compare SRLS to freelancing, we find higher management costs (especially for those who can take advantage of the flat-rate scheme as an alternative) and more stringent bureaucratic obligations. Usually, the discriminating factor is the number of people involved and the size of the business: those who open VAT numbers as freelancers or sole proprietorships are single individuals who are unlimitedly liable for any obligations undertaken. For this reason, it suits small businesses with low-risk activity. In the case of SRLS (and SRL too), on the other hand, the company is liable only for the capital contributed and is advisable if there are several partners.

The procedure for opening an SRLS consists of these steps:

1. registration of the director(s) and shareholder(s) of the proposed company with the italian tax authorities (i.e. obtain an Italian fiscal code or Codice Fiscale);
2. execution of the articles of association, that can be done personally, through power of attorney or virtually
3. issuance of the company VAT number and certified email address
4. issuance of the certificate of incorporation
5. open bank account opening

Coming to Italy and working as self-employer: visa requirements

To ensure that you are working legally in Italy, you should carefully check whether you meet the right requirements.

For those who are EU citizens, the "183 days" rule applies, meaning that, as long as you work as a freelancer in Italy for a total of no more than 183 consecutive days (or more non-consecutive days), you do not need to move your tax residency to Italy.

If you are coming from outside the European Union you need to apply for:

• A certificate of No Impediment issued by the competent Chamber of Commerce;
• a Certificate of No impediment issued by the competent Police Headquarters;
• a National Visa (Type D), issued by the competent Italian Consulate;
• a residence permit to reside and work in Italy as a self-employed (within 8 working days of entry).

The residence permit has a variable duration (depends on the type, it may be of 1 or 2 years for example) and is renewable.

At the moment there is no specific visa for digital nomads in Italy, but this is planned

So, working in a foreign company and coming from a non-UE country while living (or better “nomading”) in Italy might not be possible yet (but the Italian government is working on it). Currently, the most suitable VISA for a self-employer is the “visa for freelancers”, dedicated to those who wish to conduct their work in Italy as freelancers, whether regulated or unregulated profession (if they are represented by trade or professional associations or not), and can demonstrate that they have Italian clients already.

Directors of Italian Companies can apply for a self employment visa for directors only after 3 years of activity of the Company and as long as they are granted a compensation for their role of director. It is important to remember that these types of visa / residence permits fall within the so-called “flow decree”, so the number of visas for freelancers that are issued annually for Italy is limited to a fixed quota.

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To request legal advice on opening a company or VAT number in Italy and the procedures for obtaining visa and residence permit, contact the ITALIAN COMPANY FORMATIONS division of Lexia Avvocati law firm.

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 Author: Sponsored |  2022-12-11 07:54:46

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