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ITALY OVERVIEWMAJOR ECONOMIC INDICATORS
(*) estimate REF Novembre 2007 (**) year 2000 as reference Source: Istat, Bank of Italy elaborated by Aice.
|
| Characteristics |
S.r.L |
S.p.a |
| Company liability |
Limited to invested capital |
Limited to invested capital |
| Minimum capital |
10,000 euro |
100,000 euro |
| Capital deposit requirements |
Yes |
Yes |
| Authorized to issue stock |
No |
Yes |
Both S.r.l. and S.p.A. should have the VAT registration number ad a fiscal code (partita IVA e codice fiscale).
According to the paid-up capital an "SrL" (limited liability company) has a minimum authorised capital of 10,000 euro. Shares can be transferred only by notarised deed. An "SpA"joint stock company has a minimum authorised capital of 100,000 euro.
Capital and earnings can be entirely and freely repatriated, under EU rules. Italy has signed a number of Double Taxation Treaties, which shield income or profits from taxation in more than one territory, usually payable in the territory in which the income or profit is generated. Where Italy has no double taxation treaty with a foreign country, credit is usually given in Italy by way of bilateral relief (withholding tax).
TAXATION ON JOINT-STOCK COMPANIES
| Joint-Stock Company |
Corporate liability |
Partner liability |
| Taxes and Percentages |
IRAP 4.25% IRPEG 36% |
If dividents are distributed:
|
| Tax returns |
Form "modello unico" |
Form "modello unico" |
If you want more information about facilities on Company’s income taxation, see: “Tremonti bis” - Law 383 - 18/10/2001 art.4.
There is no legislation limiting foreign investments in Italy, and there are no local industries closed to private enterprise. There are certain restrictions in the defence sector, which require direct dealings with the Italian Ministry of Defence.
Foreign companies are advised to obtain bank references on prospective customers before undertaking business in Italy, and to consider whether checks by commercial credit agencies are appropriate. Before agreeing a method of payment (see below) it is better to contact the International Division of your bank. Although there will be companies who manage to secure payment in 60 days or less, the period of credit offered by a supplier to a customer tends to be amongst the highest in Europe, anything from 90 to 120 days. The method of payment will need to be agreed when negotiating the contract. It will depend on the degree of commercial trust that exists between the parties involved and whether credit is offered or required by either party.
1) Open Account
Most of the foreign trade with Western Europe is conducted on an Open Account basis - as the most simple, straightforward and flexible method available. However you must ensure that your customer is highly reputable if business is to be conducted on this basis with, for example, your invoice being sent direct to them along with documents and requesting payment within the stipulated term. If he pays by check, all costs associated with clearing the payment are borne by the exporter. If your bank has an operating subsidiary in Italy it may simplify payment by asking them to open a foreign currency account in Italy. Transfer of funds between the Italian subsidiary and its foreign parent bank is then a relatively simple matter.
Payments for open account can be made in three main ways:
Electronic funds transfer (i.e. SWIFT/IMT)
Bankers draft
Buyer's own check
2) Documentary Collection (or Cash Against Documents)
Normally carried out through a bank and a slightly more secure method of trading than Open Account. The exporter delivers all the necessary documents to his own bank which then sends them to a bank in the importer country. Documents are only released in accordance with the exporter's instructions e.g. against sight payment, or acceptance of a bill of exchange
Unless the goods are consigned to a third party, the exporter risks loss until settlement is made, if the importer fails to take up documents by paying or accepting the bill of exchange. There is also an additional risk of a buyer subsequently dishonouring an accepted bill of maturity. As with Open Account the exporter may be able to insure against this by Credit Insurance.
3) Letters of Credit
Though not popular with Italian business, the Letter of Credit is the most effective mean of ensuring payment. It is a useful way for companies to trade with each other until they build up a relationship of mutual trust.
Letters of Credit are not cheap to raise and your customer may be reluctant to incur the additional expenditure without some form of 'compensation' because your foreign competitors may be offering payment arrangements which are less costly to raise but, above all, involve them in fewer administrative chores. In simple terms it involves your customer instructing his bank to pay you after a certain period of time provided all documents are presented to his bank precisely in accordance with all conditions laid down in the Letter of Credit. The exporter must however present documents, which comply fully with the terms and conditions of the credit.
Letters of Credit are irrevocable, unless specifically stated otherwise, which means that they constitute a definite undertaking and cannot be revoked or amended without the agreement of all parties.
4) Interbank payment system
In an interbank payment system funds are collected via a pre-authorised debit on the current account of the debtor. The service is particularly useful where there are regular payments (e.g. insurance premiums, leasing instalments, utilities etc).
The procedure, which is completely electronic, enables the creditor, via the bank to collect at agreed times, funds due, by means of debit being passed to the debtor's account at a bank.
Advantages to Creditor
the collection account can be sent to any bank
exemption from stamp duty
the timescale for presenting for collection or for stopping payment is up to 5 days before maturity
payment advice is communicated rapidly - the debtors bank advises the presenting bank within two working days of the payment/non-payment
the debtor's bank may not advise non-payment if 15 working days have elapsed from maturity
Advantages to Debtor
payments administration is totally automated: at maturity date, the bank debits the debtor's current account and effects the necessary transfer without the intervention of the debtor
a stop can be made on the payment in the event of a dispute
limits can be placed on the maximum sum to be paid, as well as on dates within which payments are to be effected
Transports
An important requirement for companies wishing to do business is to get the goods to the market on time. The main options for Italy are road, rail and air-freight, post, air parcel post and express or courier services, depending on product requirements for speed, cost and reliability.
Roads
Italy has a generally good road transport infrastructure, although
heavy traffic causes bottlenecks around the main Northern and other
industrial conurbations, and in city centres, where there are often
severe traffic limitations, making local delivery onerous. Heavy
goods transport on motorways is usually banned on Sundays and some
public holidays. These restrictions apply in most continental EU
member states; an infringement can lead to heavy fines, confiscation
of driver's licence and impounding of the vehicle.
Travel on most of the extensive motorway (Autostrade) system is subject to tolls. The most important international border crossings for the motorway network are at Ventimiglia on the Riviera, the Mont Blanc (currently closed for repairs) and the Frejus tunnels to France; at Chiasso north of Milan into Switzerland, across the Brenner Pass; at Tarvisio into Austria and at Trieste to Slovenia.
Rail
Italian State Railways (Ferrovie dello Stato) lose money, but provide
a cheap and efficient means of passenger transportation, increasingly
through a high-speed inter City and European train network. Commercial
freight is carried principally by road, but the railways are also
taking more long distance goods traffic.
Sea
Italy has important ports serving all parts of the country. Genoa
(which has regained competitiveness, through the development of
trans-Alpine routes to southern Germany), La Spezia and Livorno
are the main ports in the northern part of the Tyrrhenian (western
Mediterranean) coast. The new port of Gioia Tauro in Calabria, handles
substantial volumes of container traffic and oil. Naples, Palermo,
Bari (in the south), and Trieste (in the north-east) mainly handle
dry cargoes, while the main ports in Sicily (Gela, Milazzo, and
Augusta) and in Sardinia handle crude oil and products.
*As far as the numbers of harbours and countries linked in the Mediterranean
sea are concerned, Italy ranks at the top list (followed by Egypt,
Turkey and Greece).* (* Source: CNEL-Major)
Warehousing
Warehousing is available in most main cities, offering flexibility
and speed of delivery. However, legal advice should be sought before
entering into any agreement.
Standards and technical regulations
ISO 9001/9002 standards are growing in influence in Italy. There may be special regulations affecting particular types of products, which need to be met before these products can be sold in Italy. The EU harmonisation of safety requirements and related standards is being implemented for industrial products through EU directives.
For more information:
Ente Nazionale Italiano di Unificazione (UNI) www.uni.it.
Labelling and packaging regulations
A CE Marking which indicates that the product meets all the essential requirements as stipulated in EU directives is now required on many goods before sale in Italy.
There are specific regulations for marking and labelling food products and their packaging, textiles, pharmaceuticals, certain cosmetics and toilet requisites, and for products containing toxic substances. Though there may not be specific regulations for other products, exporters are advised to consult their agents or customers in Italy to ensure that their goods comply with local requirements.
Italy has issued regulations to enforce packaging sizes and weights for numerous products in line with EU directives. Labelling for imported goods should be metric.
To protect their intellectual property rights abroad, exporters should obtain professional advice about protection for patents, designs and trademarks in any country where they have a potential market.
Italy is a signatory of the Patent Co-operation Treaty of 1970. Patents are valid for twenty years from the date of filing the application. Trademark registration is not compulsory. An unregistered trademark can be defended if it is widely known. Italy has a product liability law based on EU directive 85/377.
Manufacturers and traders are advised to patent their inventions and register their trademarks in Italy. Applications should be made to:
Italy
Patent and Trademark Office
Ministero dell'Industria, del Commercio, e dell'Artigianato
Ufficio Italiano Brevetti e Marchi
Via Molise 19
00187 Rome
Tel: +39 6 47053010
The office is divided into 10 branches each responsible for different applications.
Italy is
also party to the Paris Convention, the World Intellectual Property
Organisation and Patent Co-ordination Treaty and the European Patent
Convention.
Goods produced in the EU are not liable to pay import duty on entry into Italy. If goods have entered the EU from a non-member country and have had the necessary import duty paid on them, they can enter Italy without any further import duties being levied.
For more information see taxation and custom rules by European Commission.
VAT( known
as IVA in Italy).
Goods supplied by EU exporters to VAT registered traders in Italy
are zero rated for VAT by the exporter who must obtain the customer's
VAT registration number to do this. The buyer in Italy then accounts
for the VAT. VAT is applied on a non-discriminatory basis to all
goods and most services in Italy, whether imported or locally produced.
The standard Vat rate is 20%.
Internet usage is currently lower than in the USA and in some other European countries, because of the low level of domestic PC penetration. But more and more companies in Italy now sell products or services via the internet, and this sector is expected to grow substantially, with the advance of WAP and mobile technology. Italy has about 30 million mobile telephone users, which should maximise adoption of third-generation mobile technology.
Milan
Served by two airports.
LINATE
It is just 5 km from central Milan. Bus (ATM n° 73) to city centre located outside the arrivals area. They run frequently and the journey time is 25 minutes . Cost 1 euro.
Average taxi fare to city centre approx. 14 euro.
MALPENSA
It is about 45 km from central Milan. Malpensa Express trains runs every half-hour. A single journey costs 8 euro. They depart from Milan at the Stazione Nord, Cadorna. Average taxi fare to city centre 70 euro.
Rome
Fiumicino (also known as Leonardo Da Vinci) - is 30km from the city centre. Express rail service direct to Termini central station. Journey time about 30 minutes and runs hourly. One way ticket cost 8 euro. Normal stopping service is also available and runs about every 15 minutes.
Taxi fare into the centre 35 euro approx.
Milan
In Milan one ticket (current cost 1 euro) can be used on all forms
of public transport for up to 75 minutes. Tickets are on sale at
newsstands, bars, and tobacconists displaying the orange Vendita
Biglietti signs. The ticket must be stamped at the beginning of
the journey. The stamping machines are located near the entrance
of the tram or bus, but at the turnstiles for the metro where the
ticket is valid for a single journey.
Remember also to validate your rail ticket at the barrier before boarding railway trains, or you may be subjected to pay a fine.
Rome
Single journey ticket costing 1 euro on all buses and one metro
ride valid for up to 75 minutes. Daily ticket 3 euro. Weekly ticket
12 euro.
In Italy luxury hotels are mainly in the city centre. The cost of single rooms ranges from 140 euro to 470 euro per night.Four star - centrally located vary in price from 70 euro to 230 euro for a single room.Three star - from 35 euro to 110 euro.
Credit cards are widely accepted.
Restaurants
There is a wide a range of restaurants offering menus to suit all budgets in Italy and food is of a high standard. Many restaurants offer set menus which offer good value for money.
