If you are a business owner with a plan to launch an international business, you must be aware that Italy is well-renowned for being one of the 8th largest economies in the world. As a result, there are many businesses that thrive in this country and enable foreigners and locals to run a borderless international business.
However, some newcomers to the Italian business world make common mistakes when applying for a business account. Accumulated over time, these errors can add up and create significant delays to running a successful business in Italy. In this blog, we will cover some of the important things to consider when opening a business account and how you can easily open a business account in Italy.
1) Not researching enough: Do not assume that you will automatically receive an account with your chosen Italian bank. Many banks have stringent requirements for new entrepreneurs and small business owners since they are sometimes considered high-risk clients for the bank. So research the process carefully before submitting an application. It can take extra than the usual time to get your account approved if you don’t meet their requirements.
2) You might need your letter of credit or a commercial guarantee from your existing banking institution to open a business account in a traditional Italian bank. Obtaining such documentation can be difficult and time-consuming but could be demanded by your bank prior to the banking procedures. So, make sure you check with your bank if they have such requirements.
3) Make sure you understand the transfer prohibitions and restrictions that apply to foreign companies doing business with Italy's banks. Many Italian banks have rules governing the transfer of funds domestically and internationally. It is best to check with your bank if you need to follow any specific rules while running a business in Italy.
4) Do not understate your company's financial situation when applying for a bank account. Italian banks are usually prudent with their lending, so make sure you have great credibility and up-to-date documentation that comply with their requirements.
5) Know the fees associated with opening and operating a business in Italy before proceeding - they can sometimes be high depending on the bank or service provider you choose. Additionally, you might come across several hidden fees as well, which often comes out as a surprise for various business owners.
6) Finally, be aware of Italy's taxation norms in Europe as it can be confusing to some new business entrants- Individual income taxes in Italy are called IRPEF, or Imposta sul Reddito delle Persone Fisiche, which range from 23% to 43%. There are additional taxes at the regional and local levels (0.9% to 1.4%).
Those who work in Italy as foreign residents pay only taxes on their local income. In contrast, if you spend more than 183 days a year in Italy and your business and investments are located there, your worldwide income is subject to IRPEF.
Why invest in Italy?
Italy is a country with a rich history and culture. It is also one of the most prosperous European countries, with low unemployment and high GDP growth rates. These factors have contributed to Italy becoming one of the most attractive investment destinations in Europe today. There are many other reasons why businesses should consider investing in Italy:
- The country has an extremely large population with over 60 million people as of 2022 - which means there is plenty of potential for both domestic and international expansion. Italians are generally very responsive to new products or services, so your business will likely be successful if it provides quality products.
- It encompasses almost every type of industry possible - from luxury goods to agriculture and manufacturing. This gives businesses of all sizes the opportunity to succeed, no matter what their sector of operation.
- The country has a very stable political environment, which makes it an attractive location for both foreign and domestic investors. The government is generally supportive of business growth, so there are not too many hurdles that your company will encounter in getting started.
- There are a number of resources available for businesses, including highly skilled employees, strong infrastructure (including airports and seaports), and abundant marketing opportunities.
How can you set up a business account in Italy?
All Italian banks offer tailored services to companies, including business accounts, export credit facilities, and much more. The process of opening a business account in Italy can be pretty straightforward with an accurate set of documents and proper compliance with local regulations.
One of the important aspects of opening a business account is that only a few banks allow you to open an account remotely. But that does not mean you cannot open a business account from your home country. There are numerous financial service providers in the EU that offer remote financial services and enable you to run an international business in Italy from your own country. These financial service providers offer cheaper conversion rates, are usually faster and more flexible than traditional Italian banks and have numerous fee-free services associated with their plans. Some of the best options are:
Additionally, in order to open a business account, you will need a set of documents that include:
Director's passport; Director's proof of address; Tax identification number; Certificate of registration for the company; Company's certificate of good standing; Statements regarding the financial well-being of company shareholders owning more than 20% of the shares
An Italian business account can be used for a wide range of activities, including:
- Sending and receiving international payments
- Generating statements and reports
- Expanding or starting up businesses in Italy
- Selling products and services beyond your home country
If you are ready to get your business up and running, wamo offers businesses of all sizes and corporations an easier, more flexible alternative to a traditional business account. You can register to open a business account in just 10 minutes and your application can be processed in 24 hours. Most importantly of all, wamo places a strong emphasis on providing personal customer service whenever you need it. If you’d like a new kind of business account with all of the features of a traditional bank account plus some smarter ones and with the support of a team that really cares about your success, try wamo! Download the wamo business app from Google Play or the App Store and get your Italian business up and growing, from any part of the world!