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WORKING IN ITALY

‘Smart working’? What you need to know about going self-employed in Italy

The pandemic has triggered a shift in how businesses operate, priming the culture for a freelance boom and with it, creating new living and working opportunities. Is now the time to set up as a freelancer in Italy?

If we can now work from anywhere, why not work from Italy?
If we can now work from anywhere, why not work from Italy? Photo: Unsplash

The lockdown-induced rise of ‘smart working’, as remote work or working from home is referred to in Italy, has provided a fresh perspective on how workers and entrepreneurs can do business. A different and more flexible way of doing things has now established itself as the norm since work-from-home measures were first ordered around a year ago.

READ ALSO: Freelance or employee: Which is the best way to work in Italy?

The Italian government has recommended remote working where possible throughout the Covid-19 emergency, and it’s set to continue as the crisis measures roll on.

Some 90% of large businesses and 73% of medium enterprises switched to a remote system, according to Istat, the Italian statistics body. Over a third of small businesses also took up agile working in order to ensure business continuity, while movement continues to be restricted.

The country wasn’t prepared for the sudden shift to working from home, with many areas suffering internet connectivity issues or simply having no internet at all. However, the pandemic is dragging Italy into a digital future, accelerating the supply of fast internet services to meet the demand of this changed working environment.

High speed fibre will pass 202 million houses in the European Union and Britain by 2026, according to a joint report by consultancy firm IDATE and industry group FTTH Council Europe. Italy is one of the countries expected to experience significant growth with a predicted 218% rise of homes served by high speed internet.

With the number of freelancers or liberi professionisti in Italy increasing year-on-year and currently making up a quarter of the workforce, now could be the time to jump on the momentum and become your own boss in Italy.

READ ALSO: These are the thousands of job vacancies that Italy can’t fill

It sounds idyllic to be able to make a living from your laptop while enjoying ‘la dolce vita’, but exactly what does it entail and how much bureaucracy is involved?

Here, we drill down the options for those looking to freelance in Italy, the advantages on offer and the drawbacks to watch out for.

As the process is complex and variable, it’s strongly advised you seek professional legal and accounting consultation before setting up your business plans.

Where you come from determines your route to gaining freelance status in Italy.

If you move to Italy from an EU country, you have the right to stay and work in Italy with a relatively straightforward process of achieving self-employment.

On the other hand, if you’re leaving a non-EU country, which of course now includes British citizens, it’s a longer and more tangled process. Getting authorisation to work and a visa for self-employment varies according to your country of origin.

As a rule of thumb, if an Italian would face limitations in setting up a business in a particular non-EU country, then it’s likely the citizen of that country will face the same restrictions if wanting to set up a business in Italy. The Italian Ministry of Foreign Affairs is a good source of information on reciprocity agreements.

Remote work is becoming much more common in Italy – but is it getting easier? Photo: Andreas Solaro/AFP

Non-EU nationals already living in Italy may need to convert their permit in order to be eligible for self-employment.

Accountant and tax advisor, Nicolò Bolla, who runs finance firm Accounting Bolla, advised that some residence permits allow you to freelance, whereas others, such as the ERV (Elective Residence Visa) for instance, don’t.

You can find out which visas can be converted and the relevant application on the www.interno.it website.

It’s important to have a strategy if you’re planning to freelance in Italy, according to Nicolò. He advised to get your papers straight and create a rigorous plan regarding immigration and tax.

As it takes months to go through the bureaucracy, even for an accounting professional, he recommended taking a long-term view of moving to Italy to freelance.

“If you fail to set up a proper immigration and business strategy, it could cost you time and money. Make your calculations before making any decisions,” he said.

If you’re coming from outside the EU, what visa and permit do you need?

To be self-employed in Italy, you need to apply for a self-employment visa before leaving your country. This applies to non-EU nationals and those exempt from the Schengen visa.

The process can be tricky and take months, so it’s best to ensure you account for long timescales before hopping on a flight.

READ ALSO: What type of visa will you need to move to Italy?

It’s also far from guaranteed, even if you’re ready to take on the bureaucracy. Tax advisor Nicolò warned that this visa has one of the highest rejected application rates.

What’s more, there is a cap on how many foreign national workers are allowed to come into Italy each year, which is determined by the so-called Inflow Decree, or ‘decreto flussi’. This only opens for a few months every year and it’s the only time non-EU nationals can apply for a work visa.

What you need to consider before choosing your type of self-employment

Different professions fall under different laws, regulations and taxation. Each type of employment or source of income has a code, known as a ‘codice ATECO‘, which has to be communicated to the Revenue Agency (Agenzia delle Entrate).

Therefore if you’re working online as a teacher, you’ll have a different code and regulations than if you wanted to join the rising number of donkey farmers in the Alps.

To achieve the libero professionista status, you need to open a ‘ditta individuale’, which is effectively a sole trader company. When you do this, you will get a partita IVA, a mandatory tax number.

Without this code, you can’t legally make invoices or receive payments.

How do I open a ‘ditta individuale’?

If you already reside in Italy, a trip to your local Chamber of Commerce or INPS office ‘Istituto nazionale della previdenza sociale’, the National Institute of Social Security, will allow you to enrol. This is a requirement by law.

You can also list your business with INPS online, but this is notoriously thorny and it’s recommended you get professional assistance with this.

If you’re not already in Italy and are doing this remotely from your non-EU country of origin, your first step is to obtain a Nulla Osta from your consulate. In this case, it serves as work authorisation to allow you to apply for the visa.

“If you manage to secure a self-employment visa, you are then granted entry to Italy”, stated Nicolò.

These are the steps:

  1. Apply for a Nulla Osta (authorization to perform self-employed work) from the local Immigration Desk (Sportello Unico Immigrazione – SUI). You may need to hire a proxy in Italy to do this on your behalf.

  2. Get the documentation relevant to your work activity in Italy.

  3. Apply for the Self-Employment Visa at the Italian consulate of your country.

  4. Enter Italy and apply for an Italian residence permit (permesso di soggiorno) to be allowed to live and work in Italy legally.

The documentation needed to apply for the visa changes according to your country and profession. It may include the following as an example:

  • Italian Long-stay visa application form.

  • Two passport-sized pictures.

  • Valid passport with at least two blank visa pages, which must be valid for at least three months longer than the visa you will be issued.

  • The Nulla Osta authorisation (original and photocopy).

  • Proof of suitable accommodation, such as a purchase or rental agreement.

  • Proof of income from the previous year, which must be higher than the minimum level required by law for exemption from healthcare contribution (€8,400).

  • Certificate issued by the Chamber of Commerce in the area you will be working, recognising you have enough resources for the self-employed work you plan to do

If you’ve made it this far and have been awarded a self-employment visa, you can enter Italy.

Once you’re in the country, you have eight days to apply for a ‘permesso di soggiorno’ (a residence permit), which will be issued by your local Questura (the provincial police headquarters).

The visa is valid for two years initially and can be renewed.

What’s it like to freelance in Italy?

Zoe Adams Green, a British citizen living in Rome with her husband and toddler, has been freelancing as a technical translator in Italy since 2018.

She opened a partita IVA with a commercialista, an accountant. She admits this was relatively smooth as going self-employed wasn’t dependent on obtaining a self-employment visa. Britain was still part of the EU at that time and so Zoe could benefit from the EU’s freedom of movement and work.

However, no matter where you come from, she advised keeping your eyes open and checking the taxation fine print. Zoe believed she was eligible for a tax break for highly qualified professionals who were new to Italy.

“My husband and I were pretty sure I was eligible but my accountant wasn’t familiar with the scheme. So I contracted another commercialista who looked into it and confirmed I qualified for a tax reduction,” she said.

READ ALSO: ‘Do your homework’: An American’s guide to moving to Italy

Thanks to her persistence and diligence, she now only pays income tax on 50% of her earnings for the first five years of business. 

However, she is still liable for full INPS contributions, the payments that provide benefits in the event of illness, maternity or unemployment, for example. For the self-employed, this begins at a rate of 24% of income, so she admits it’s a “heavy tax burden overall”.

“There are other tax regimes which might better suit your circumstances, so it’s worth talking to a commercialista to consider your options,” Zoe said.

You could, in theory, claim a hefty tax deduction on your outgoings. “Petrol, rent, utility bills and other payments related to running your business can all be taken down from your taxes as a self-employed professional,” he added.

Nicolò confirmed there are tax breaks for various skilled professionals coming to Italy. “There are also overheads you can offset, depending on the freelance regime you choose”, he stated.

Where in Italy is best to set up as a freelancer?

If you’ve met all the requirements and secured the relevant self-employed visa, you need to consider the best spot to base yourself. You’ll need to weigh up rent prices, which fluctuate considerably from north to south and from city to countryside.

The impact of the pandemic saw a surge in demand for homes in the south, where properties are often cheaper. If you can cut your overhead costs such as rent, your profits will clearly rise, making it a more viable career choice.

However, it’s also a good idea to check that the internet speed in your area is up to scratch beforehand if your business is online.

READ ALSO: Foreigners rank Italy ‘worst in Europe’ for internet and paying without cash

Once the coronavirus restrictions are lifted, there are also many bars in the cities offering wifi connectivity thanks to the rise of freelance activity. This can also be a good way to curb the loneliness that is sometimes a drawback of working alone.

The idea of being your own boss in a country where you can reward yourself with a spritz in the sun just might be enough to push you through the tricky red tape.

If the spoils are great enough to justify the endeavour, it’s wise to seek professional help throughout the process. Even once you’re up and running, you’ll likely need advice with declaring taxes to ensure you are legal and compliant.

Get through all that and you’ve most definitely earned that spritz with a ‘bella vista’.

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WORKING IN ITALY

Remote workers: What are your visa options when moving to Italy?

Italy does not (yet) have a special 'digital nomad' visa - so what other options are available to freelancers and remote workers? Here's what you need to know if you're planning a move.

Remote workers: What are your visa options when moving to Italy?

Italy has announced that a new visa option for ‘digital nomads’ or remote workers is on the way for non-EU nationals wanting to move to the country.

Though the government is yet to give details of how the application process will work, it’s hoped that the new visa will mean a far easier route to a new life in Italy for the growing number of people who can work from anywhere with just a laptop and an internet connection.

READ ALSO: What do we know so far about Italy’s digital nomad visa?

The idea of swapping a spare bedroom office in colder climes for a new life in Italy is proving especially tempting in combination with the country’s growing number of discount home purchase or rental schemes aimed at repopulating remote, rural villages.

While it is possible for many non-EU nationals to spend up to 90 days in Italy without any visa at all, those wishing to work legally while here must apply for a visa and work permit

And the current visa options available are not always viable for self-employed freelancers and remote workers, immigration law experts say, due to the strict quotas and requirements involved.

Here’s a breakdown of the other visa options available at the moment for those hoping to make the move to Italy.

Self-employment visa

The self-employment visa, or visto per lavoro autonomo, is the permit that most non-EU freelancers would probably expect to apply for when seeking to move to Italy for work.

Successful applications, however, are rare.

So rare, in fact, that Costanza Petreni, a senior immigration consultant at the immigration firm Mazzeschi, says she actively discourages clients from taking this route.

READ ALSO: Working remotely from Italy: What are the rules for foreigners?

“We have so many clients asking for this type of application, because in the absence of a digital nomad visa there’s almost no other option. But what we tell them is it’s extremely hard and uncertain,” Petreni says.

The visas are released in annual quotas, via Italy’s decreto flussi, on a first come, first served basis. For the last few years, including in 2022, only 500 have been made available each year.

Petreni says one of the main issues they face, however, is less a lack of available permits than the absence of clear guidance from consulates as to exactly what documentation they need.

A common obstacle, for example, is that the consulate will require the applicant to be registered with the relevant professional body or guild for their profession – but won’t specify which one they have in mind.

READ ALSO: How many people does Italy grant work permits to every year?

If you work remotely, can you just move your life and laptop to Italy?
Just 500 self-employment visas were released by Italy in 2022. Photo by Persnickety Prints on Unsplash

In Italy, membership of such bodies is standard, but in most other countries, it tends to be only very established professions that even have their own guilds or royal societies – making this a significant stumbling block for many applicants.

“Even for photographers, they’d say, well, you need to register with the relevant body; but there isn’t one, that’s the problem,” says Petreni.

She says the process can sometimes be a little easier for those who are already in Italy on, say, a study visa.

That’s partly because those who are already present in Italy and applying to convert their existing residency permit into a work permit come under a different quota, with more spaces available (7,000 in 2022).

It’s also because once you’re in Italy, it’s your local prefecture, rather than an Italian consulate, that handles the application process – and in Petreni’s experience, dealing with the prefecture can be simpler.

“In theory, the requirements are the same whether you convert your permit or whether you do a one-time visa application for self-employment. But the authorities checking are different.”

One key difference, she notes, is that prefectures will generally be able to tell you whether they have any spaces left in their quota and whether it’s worth filing an application as a result, whereas consulates typically won’t share this information (“I don’t know if they know”).

READ ALSO:

She warns, however, against assuming that entering the country on a study visa and then converting to a self-employment visa is a silver bullet, as success is by no means guaranteed.

“If I were proposing this to a client, I would have to be very careful in managing expectations, so that after one year of a study permit they don’t become very cross that they didn’t convert it,” Petreni says.

How to work remotely in Italy.
Moving to Italy on a study visa may smooth the path for those hoping to apply to work there as a freelancer. Photo by Hannah Wei on Unsplash.

Intra-company visa

If the barriers to obtaining a self-employment visa are so prohibitively high, what other options are out there?

One alternative that Petreni will sometimes suggest to clients is the Intra-Company Transfer (ICT) work permit.

This entails setting up an Italian branch of a foreign-headquartered company, which she says can work for clients who have “even a small company in the US or UK”.

In this case, the worker would be applying for a visa not as a freelancer but as the employee of a foreign company that has posted them to Italy. The visa has a five-year duration (as opposed to the self-employment visa, which is valid for an initial period of two years).

One of the advantages of this visa, says Petreni, is that it’s outside of the decreto flussi, and therefore not subject to quota limits.

READ ALSO: EXPLAINED: How to get an Italian work visa

“This is an option we have proposed, and it has worked in many cases,” she says.

“The problem is that it’s quite hard financially, and tax-wise, so it’s not for everyone… you need to put quite a bit of money in the Italian branch and have it running, so you have your yearly taxes, and you need to show that the parent company is reliable.”

“We will suggest having €20,000, €25,000 for an intra-company at least, just to show that it’s in good standing order.”

'Not just extra paperwork': What it's like moving to Italy after Brexit

An ICT work permit might be a viable option for some remote workers looking to move to Italy. Photo by ALBERTO PIZZOLI / AFP

The EU Blue Card

The EU Blue card, introduced via an EU directive, is another option Mazzeschi sometimes proposes to potential clients.

Those coming to Italy on the card must earn a minimum salary of €24,789.93 and have a three-year university degree at minimum.

This scheme allows an Italian company to locally hire highly qualified non-EU nationals, and again operates outside of the decreto flussi quota system.

READ ALSO: ‘Not just extra paperwork’: What it’s like moving to Italy after Brexit

In this case, instead of setting up an Italian branch of a foreign company, the applicant registers a company under Italian law. Checks on the company will be stricter than they are for an intra-company office. 

“They want to see that the Italian company has the funds to hire a non-EU employee,” says Petreni. “For that option, we suggest at least €50,000 share capital for the Italian company.”

“It’s usually someone who already has a company running abroad, and then they decide whether to do the intra-company or the EU Blue Card. But for self-employees, the most-used option would be the intra-company, when they can do it.”

What type of visa will you need to move to Italy?

The EU Blue Card could be the best option for some would-be Italian residents. Photo: Filippo Monteforte/AFP

Petreni says that people considering applying for the EU Blue Card often want to know whether it allows the holder to move around freely and work anywhere within the EU once they arrive.

It’s not quite that simple, she says – in the beginning you can only work from the country where the company you’re working for is based –  but holding the card can facilitate the worker’s move to a different EU country.

In the case of Italy, someone who has worked in another country in the European Union for eighteen months can move to Italy and apply for an EU Blue Card permit to work for an Italian company within one month of arriving.

Final tips

To the average freelancer just wanting some mobility, these two latter options might sound somewhat daunting.

For those who want to attempt a self-employment visa application in spite of the challenges involved, Petreni has some advice: contact your consulate to get as much information as possible before starting the application process.

“See if they have very specific requirements, because the information is not clear and it can be discordant for self-employment options, so it’s very important get in touch and see how the consulate is and what kind of answer they can give.”

“Self-employment is a bit of a jungle, it’s crazy,” says Petreni.

Find more information on the Italian Foreign Ministry’s visa website here.

Please note that The Local is unable to advise on individual cases. For more information on visa applications, consult the Italian embassy or consulate in your country or an immigration law professional.

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