Setting up a business as a sole trader

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Accountant Filippo as English speaking Italian chartered accountant, Commercialista Italiano che parla Inglese, will help you ensuring you are operating complying with Italian Tax law.

Setting up as a sole trader is one of the most popular way to start a business in Italy as it is easy and cheap.

Sole trader registration is straightforward

Sole trader registration is straightforward and doesn’t require a notarial deed, which is mandatory instead to
open an Italian limited company (S.R.L.) and an Italian joint stock company (S.P.A.). Thus the company
formation is extremely cheaper.
A sole trading company is incorporated directly at the Company House, by filling a single notice with the
Companies House, your trade will be also registered with the Social Security Administration (INPS), with
the Accident Insurance Office (INAIL) and with the Italian tax Authorities. Watch out, you will be required
to provide the Companies House with a certified email address.


Accountancy is simpler than a partnership, and all the earnings can be used for the proprietor’s personal
expenses. A limited company instead can be very expensive (for a small business) to open, to maintain over
the years and finally to dissolve compared to the expenses necessary for a proprietorship.
Sole proprietorships also have the least government rules and regulations affecting it. Owner has complete
control over all the aspects of his or her business and can take any suitable managerial decisions.

The owner bears the burden of the unlimited responsibility.

But it is not all roses and flowers though, as the owner is undoubtedly entitled to all its profits (after
taxation), he bears the burden of the unlimited responsibility for all losses and debts. Every asset of the
business is owned by the proprietor and, therefore, all debts of the business are the proprietor’s. The creditors
can take advantage of the proprietor’s personal wealth even outside Italy, although this usually happens only
for important debts.

The business ceases.

Because a sole trader is deeply connected to the owner’s life, the business usually ceases at his retirement or
death. Before that, it can be formally ended by simply submitting an application to the Chamber of

Taxation: minimum regime

As for the taxation, the government has lately introduced a tax system extremely convenient called “the
minimum regime”, placing some restrictions though on access as regards the value of equipment in use and
the possibility to employ, with a flat tax rate of 5% on net income.
At first it seemed an actual convenient regime, although at a closer look it didn’t appear so convenient.
Simply put, tax for a craftsman started from a minimum of euro 3.444,55 + 5% on the net, whereas for a
trader tax started from euro 3.458,52 + 5% on the net.

Taxation: updates

Aware of the problem and in order to push down the tax burden, the government has eliminated the
minimum annual wage on which the national insurance contribution is calculated and risen the tax rate up to
15% on the net income leaving the insurance contribution rate at 22,20%. Although the tax due will be
calculate on a taxable lump sum this time.
This latest version of this regime looks more convenient than the previous one.
As for professionals without their own pension fund, instead, the national insurance contribution has been
increased to 30.72% on net income.

Accountant Filippo as English speaking Italian chartered accountant, Commercialista Italiano che parla Inglese,  will definitely help you,

for more information and updates feel free to contact us