Setting up a sole trader in Italy

A foreign entrepreneur who wants to go to Italy and start a small business, with low expenses, may choose to become a sole trader. Any EU citizen is allowed to work as a sole trader in Italy, after he registers with the local authorities. In Italy, there are a few requirements to meet if you need to be self-employed. Firstly, you have to be a permanent resident and hold a residence certificate and then you can be authorized to work as a freelancer, self-employed in the field you choose or sole trader.

The documents required for a sole trader

The document you need in order to work as a sole trader is a work and residence permit (called “Permesso di soggiorno per lavoro autonomo/indipendente” in Italian). According to the type of business you want to perform in Italy, you must register with the appropriate organization that may be the Trade Register, the local tax office etc.

For certain types of activity, you will need to register for VAT. For registering as a sole trader, you need certain certificates that prove your qualifications in that field. If you start working without the authorizations required by the Italian laws, you may be fined and the amount for these type of penalties is large. Also, the Italian authorities may confiscate your tools and they can ban you from working in Italy for the next years.

The responsability for the debts

The sole trader is responsible for his debts, no matter if they are personal or professional and he can be declared bankrupt, if he is not able to pay its dues. Sometimes, it is recommended to open a limited liability company instead of becoming a sole trader. If you need to know which type of business is more appropriate for you, it is advisable to contact an Italian lawyer who will help you on this matter.

Sole trader is a good choice for foreign entrepreneurs who want to spend as little as possible for registration, have a simple accountancy and use the money they gain as they want. On the other hand, if you can’t pay your debts, the creditors are allowed to take parts of your personal wealth even if it is in other country.

For more information about setting up a sole trader and the differences between this type of business and others, such as limited liability company or joint stock company, you may contact our law firm in Italy. Our attorneys in Italy will advice on the advantages and disadvantages of every type of company and they will help you register the form of business you choose for starting your economic activity in Italy.