Italy's real advantage for a new solo business is the regime forfettario, a flat-rate tax scheme that can bring your effective tax rate down to 5% for your first five years if you stay under the revenue cap. Here's what it takes to start a business in Italy in 2026.
1. Which business structure fits you?
Before you register anything, it helps to know what you're actually choosing between.
- Ditta individuale (sole proprietorship). No minimum capital, the default for freelancers and small operators, with unlimited personal liability.
- SRL (and the simplified SRLS variant). A limited liability company, with minimum capital anywhere from €1 to €10,000 depending on the version. The flat-rate tax regime below generally isn't available to SRLs, so this is more of a growth-stage move.
2. Register your business
Nearly everyone starts with a Partita IVA, Italy's VAT and business tax number, obtained through the Agenzia delle Entrate using Form AA9/11 for individuals or AA7/10 for companies. There's no government fee for opening it, though most people use a commercialista (accountant) to handle the filing correctly, typically a few hundred euros. You'll also choose an ATECO code describing your business activity.
Forming an SRL adds a layer: incorporation documents (Atto Costitutivo and Statuto) signed before a notary, then registration with the Registro delle Imprese (Business Register) at your local Chamber of Commerce, usually coordinated by a commercialista. Once registered, you receive a REA number and your company legally exists.
3. Register with INPS (and INAIL if hiring)
Every self-employed person and company registers with INPS, Italy's national social security institute, for pension and contribution purposes. If you plan to hire employees, you'll also register with INAIL, which covers workplace accident insurance. Neither has a registration fee itself, but the ongoing contributions are real: freelancers under INPS's Gestione Separata (without their own professional pension fund) pay around 26.07% of net income.
4. Check licenses and permits
Italy doesn't issue a single national business license. What you need depends on your ATECO code and industry, and regulated professions carry their own authorization requirements on top of standard registration. Check with your Chamber of Commerce or professional association for anything industry-specific.
5. Understand Italian taxes
Freelancers and sole traders under €85,000 in annual revenue can opt into the regime forfettario, a flat-rate scheme: 5% tax for your first five years, 15% after that, with no deductions for actual expenses since the rate is applied to a notional taxable base. Cross €100,000 in revenue during the year and you exit the regime immediately.
Outside that regime, sole traders pay IRPEF, Italy's progressive personal income tax, reformed down to three brackets with a top rate of 43% starting at €50,000 of income. Individuals, freelancers, sole proprietorships, and partnerships alike are exempt from IRAP, a regional production tax that now applies only to corporate entities.
SRLs pay IRES (corporate income tax) at a flat 24%, plus IRAP at roughly 3.9% on top, calculated on net production value rather than pure profit.
VAT is 22% standard, with a 10% reduced rate for food, tourism, and hotel accommodation, and a further reduced rate for essential goods.
6. Stay compliant
Electronic invoicing (fattura elettronica) through the Sistema di Interscambio (SdI) is mandatory for essentially every VAT-registered business, including SRLs and most sole traders. VAT filings are monthly or quarterly depending on your turnover and activity type. The annual income tax return (Modello Redditi) is due by October 31, with estimated tax payments (acconti) split 40% by June 30 and 60% by November 30 under the ordinary regime.
Italy business costs at a glance
| Item | Cost |
|---|---|
| Partita IVA (sole trader/freelancer) | Free (government fee) |
| SRL minimum capital | €1 to €10,000 |
| Regime forfettario (first 5 years) | 5% flat tax |
| Regime forfettario (after 5 years) | 15% flat tax |
| Regime forfettario revenue cap | €85,000/year |
| IRPEF (ordinary regime, top bracket from €50,000) | 43% |
| Corporate tax (IRES), SRL | 24% |
| Regional tax (IRAP), SRL only | ~3.9% |
| VAT, standard rate | 22% |
Frequently asked questions
What is the regime forfettario in Italy?
A flat-rate tax scheme for freelancers and sole traders under €85,000 in annual revenue: 5% tax for your first five years, 15% after that, with no deductions since the rate applies to a notional taxable base.
How much does it cost to open a Partita IVA in Italy?
There's no government fee, though most people use a commercialista to handle the filing, typically a few hundred euros.
How much capital do I need to start an SRL in Italy?
Anywhere from €1 to €10,000 depending on the version, SRL or the simplified SRLS variant.
What's the corporate tax rate for an SRL in Italy?
IRES at a flat 24%, plus IRAP at roughly 3.9% on net production value, for a combined burden around 28%.
Do freelancers in Italy pay IRAP?
No. Individuals, freelancers, sole proprietorships, and partnerships are exempt from IRAP; it now applies only to corporate entities.
Fees and rates above come from the Agenzia delle Entrate and INPS as of 2026, and they do change over time, so double check before you file. None of this is legal or tax advice. Talk to an Italy-qualified commercialista or lawyer about your specific situation.