The Complete Guide to Starting an Ecommerce Business in Italy
Italy is one of the best European countries to start an ecommerce business, and it’s true whether you’re a native, a new resident, or even a foreigner looking to break into the EU market. Italy has no citizenship or residency requirement for incorporation, and the process for starting up a business is very straightforward. Best of all, the demand for online goods is high, as Italy has the 14th largest ecommerce market in the world.
Can Anyone Open an E-commerce Business in Italy?
Almost anyone can set up a business in Italy, but it’s easier for some people than for others. For instance, residents of Italy and elsewhere in the EU can just register with the appropriate regulatory agencies. Foreigners from outside the EU can register as long as they reside in a reciprocal nation — in other words, a nation that is likewise open to Italian entrepreneurs.
If you don’t meet any of the aforementioned criteria, you still have a couple of options for establishing a business in Italy. For instance, you can establish a business if you have an Italian partner with at least a 50% stake in the organisation. Since this is seldom the case, though, the more common path for foreign entrepreneurs looking to open a business in Italy is to establish residency within the country.
In order to open a business in Italy as a foreigner from a non-reciprocal nation, you’ll need to establish a long-term permit to stay. This can be done by contacting the Italian consulate in your country or by applying for a full self-employment visa in Italy. There are different types of self-employment visas that you can apply for, including the Italy Startup Visa, Italy Freelancer Visa, and Italy Entrepreneur Visa.
To qualify for the Italy Entrepreneur Visa, you’ll have to present a business plan that includes an investment of at least €500,000 in the Italian economy. For an ecommerce business, however, you may be able to get by with a more cost-effective Startup Visa, assuming that your product or business model is innovative in some way.
How to Open an E-commerce Business in Italy
Once you’ve determined your eligibility for business ownership and established residence in Italy (if required), you’ll need to take the following steps to open your ecommerce business:
Choose a Business Structure
As an ecommerce business owner, you will most likely register your business as either a limited liability company (LLC) or sole trader (sole proprietor).
The LLC is more labour-intensive to establish for companies in Italy, but it’s also open to more people. To register as a sole trader, you must be a resident of Italy and meet the qualifications of a freelancer.
To establish an LLC:
- Register all directors and shareholders with the Italian Tax Authorities. This can be done in person at any office of the Italian Revenue Agency. You just need a valid ID or passport, and you’ll be presented (often same-day) with your Italian tax identification number (codice fiscale).
- Draft your articles of association, and execute them with a public notary. The articles must be signed in the presence of a notary, who is then responsible for registering your organisation on the local Companies Register. The register is overseen by the Chamber of Commerce in the municipality where you open your online business. If you’re not yet present in Italy, you can appoint a special attorney to execute the articles of association on your behalf.
- Obtain a VAT number (Partita Iva). Every company must obtain a VAT identification number in order to track value-added tax contributions. In Italy, this number is issued by the Agenzia delle Entrate. You can request your ID number online, and you should receive it same-day.
- Obtain a certificate of incorporation (Visura). You’ll need to file all of the business information that you’ve already accumulated, including the codice fiscale, VAT number, articles of association, and other documentation with the Chamber of Commerce in your municipality. After your documents are reviewed and approved, you should receive your Visura within a few days. You can then commence with your business operations.
The process for setting up shop as a sole trader is much more streamlined. You just need to fill out a basic application with the Trade Register or the local tax office. When your application is approved, you’ll receive a certificate that you can then use to apply for your codice fiscale and VAT number. Once you have all of the necessary documentation, you can commence with your business operations.
Open a Business Bank Account
After you obtain your Visura, you will be eligible to open your business bank account. This is an important step, as you must separate your personal assets from your business assets — even if you’re operating as a sole trader.
In addition to the Visura, you’ll need to present your proof of address, tax ID number, and passport. You may also be required to present a Certificate of Good Standing, which certifies that you have satisfied all legal requirements to operate a business within the Italian borders. This should be provided to you by the Chamber of Commerce in your municipality.
All major banks in Italy work with businesses, so you shouldn’t have trouble finding a financial institution assuming you’ve been approved to operate in the country. Italy is also home to many large foreign banks and may have branches for banks that you already have relationships with.
Acquire Your Product
When you’re ready to build your ecommerce shop, the first step is to prepare your product line. If you’re planning to acquire or develop your products in Italy, you can start selling right away. However, if you plan to import your product from another country, your goods will need to pass through customs and be declared using the EU’s Single Administrative Document.
Note that all products imported into Italy must adhere to all local EU regulations. In most cases, you won’t need to obtain a formal import license, but licensure may be required if you’re importing certain types of goods like foods.
If you plan to maintain a permanent establishment in Italy for processing or fulfilling orders, but you also plan to ship all items from another country, you won’t have to worry about the Italian import requirements. Just note that all online orders processed in Italy will be subject to Italian and EU law. For example, all orders must come with a 2-week, no-questions-asked return policy and a two-year legal guarantee against faulty goods per EU rules.
Register Your Website
The website is the foundation of any ecommerce business. In order to create your website and start selling products in Italy, you’re going to need the following:
- A website domain that contains the name or purpose of your business. If you plan to sell predominantly within the Italian market, we recommend going with a .it domain as it will be best optimised for your audience. If you plan to sell outside the local market and offer your goods to customers throughout the world, a .com domain might be a better solution.
- Web hosting. It’s best to go with dedicated (as opposed to shared) hosting. This will result in a better user experience and greater security for your site.
- Merchant services. A merchant services provider enables you to accept credit cards, debit cards, and other forms of payment from customers. Make sure to work with a merchant provider that has its own secure, dedicated payment gateway and is accustomed to accommodating Italian consumers as well as customers throughout the EU and beyond.
- Online shopping cart software. A good shopping cart software will enable you to customise the design of your site and also streamline your checkout process. Popular examples include WooCommerce, BigCommerce, Shopify, Volusion, and Magento.
Familiarise Yourself With E-commerce Regulations in Italy and Europe
If you’re coming from outside of Italy and especially outside of the European Union, you’ll need to take some time to learn the ecommerce regulations. These regulations are stringent and detailed. For example:
- You must make your company name, physical address, e-mail address, and other identifying information clearly accessible to customers in your online store.
- You must maintain PCI compliance at all times to secure your customers’ credit card data. A reliable merchant provider like Unicorn Payment can help you with this.
- You must make all transaction information available to customers (including an itemised purchase list and complete pricing information) before they complete the checkout process.
For more information, check out our complete guide to ecommerce regulations in Europe.
Should You Start an E-commerce Company in Italy?
There are definitely pros and cons to setting up your ecommerce shop in Italy. On one hand, Italy has some of the highest business registration costs in the EU (€2,000 just to get started), but once your organisation is off the ground, there are myriad benefits to running an Italian ecommerce business.
For example, with its prime central location along the Mediterranean Sea, Italy is positioned in the heart of valuable trade routes across the European Union, Northern Africa, and the Middle East. In addition, Italy offers one of Europe’s most business-friendly climates, affording you access to investors from all over the world and allowing you to benefit from a tech-savvy customer base that loves to shop online.
And then there is the prestige. If you’re working in the luxury goods sector, there’s a certain cache that comes from having an Italian brand. After all, Italy is home to names like Valentino, Armani, and Gucci.
So if you’re thinking of starting your ecommerce business in Italy, you’ll be in excellent company. As long as you take the time to learn the rules and build a solid foundation for your online business, you can absolutely prosper in the Italian Republic.