Self-employment in Italy is not pretty; you will find that both taxes and regulations are going to be quite painful. One example: the government will estimate your first year's income and require you to pay the estimated annual tax *up front* - you then get to claim a refund, if appropriate, when you file your annual tax return.

Also, what is your current citizenship? If not EU, then you may find moving to Italy as a self-employed individual to be just about impossible.

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If you are an Italian citizen, self-employment is not nearly as bad as it sounds. In fact, there are programs in place to limit your taxes and help spur small business growth.

Doing business as a sole proprietor is probably the easiest. This is exactly what my wife is doing. She has a tax id (partita iva), business name, and business bank account.

While applying for her tax id, she learned of a small business program sponsored by the region. She registered for the program and was assigned a mentor. This person determined the feasibility of her business idea, offered suggestions, and helped her write a business plan. When it was ready, her mentor accompanied her to the bank where they both pitched the idea in hopes of getting a low interest business loan. The loan was approved for €25k. The program lasted about 3 months. During this time she was required to take classes that covered regulatory requirements, taxes, and accounting. Program participants were also encouraged to network and share ideas.

Best of all, for the first 5 years, she only pays 5% tax on profits under €35k. And get this, she doesn't have to charge IVA (sales tax) to her clients for 5 years. That's an immediate savings to her clients.

Finally, if you are not an Italian citizen, see if you can create a business entity in your home country that can do business in Italy. This is just and idea. I have no idea how that might work.

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I forgot to add, my wife was not required to estimate her annual taxes or pay any taxes up front. Certainly not for a year.

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This was a very informative post! thank you. We are considering self employment or a business. We have also heard it is very easy to register a business in Montenegro. Perhaps, researching foreign businesses ability to do business in Italy would an interesting idea.

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Such a timely post! Thanks so much for the information!

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