Starting a business in
🇮🇹Italy
Checked November 4, 2026 · How we score
Corporate tax
24%
Top income tax
43%
Setup from
$2,500
all-in, first year
Time to form
20 days
can be done remotely
Taxes in Italy
| Corporate income tax | 24% IRES 24% plus regional IRAP of about 3.9% on a net production-value base (combined roughly 27.9%). Reduced IRES 20% or lower for qualifying reinvestment from 2025. |
|---|---|
| Personal income tax (top) | 43% 2026 IRPEF: 23% to EUR 28,000, 33% EUR 28,001–50,000, 43% above. Regional and municipal surtaxes of about 1%–3% apply. Forfettario flat regime: 15% (5% for first five years) for sole proprietors up to EUR 85,000. |
| Tax system | Worldwide income |
| Capital gains tax | 26%26% on financial gains and dividends (cryptoassets 33% from 2026); real estate gains 26% if sold within 5 years of purchase. |
| Dividend withholding (non-residents) | 26% |
| VAT / GST | 22% |
| Social security | Employer ~30%, employee ~9%; self-employed INPS gestione separata around 26%. Dividend WHT 26% for non-residents (reduced by treaty; 1.2% for EU companies). |
Forming a company in Italy
| Usual entity | S.r.l. (limited liability company) |
|---|---|
| Minimum capital | $1 |
| Setup cost (all-in) | $2,500–$5,500 |
| Annual running cost | $4,000–$9,000 |
| Time to incorporate | 20 days |
| Form remotely as a foreigner | Yes |
| Local director required | No |
| Local address required | Yes |
| Owners on public register | Yes |
| Statutory audit for small companies | No |
| Business banking for non-residents | Hard |
Residency and visas
Digital nomad visa (since April 2024) needs about EUR 28,000/year income. Investor visa: EUR 250,000 in an innovative startup, EUR 500,000 in a company, EUR 1M philanthropic, or EUR 2M government bonds. Italy is a slow, paperwork-heavy country.
| Digital nomad visa | Digital Nomad Visa, $2,700/month income |
|---|---|
| Golden visa | Yes, from $290k |
| Ease of residency for founders | 4/5 (1 = easiest) |
Special tax regimes
Flat tax for new residents
From 2026 new arrivals pay EUR 300,000 per year (up from EUR 200,000) on all foreign income, plus EUR 50,000 per family member, for up to 15 years; those already enrolled keep the old amount.
Impatriate regime
50% exemption (60% with children) on employment income for five years for those who relocate and meet the work requirements.
7% pensioner regime
Flat 7% on foreign pensions for retirees moving to small southern municipalities, for up to nine years.
Forfettario
15% flat tax (5% for first five years) for self-employed under EUR 85,000 revenue.
Pros and cons
Why founders pick Italy
- EUR 300,000 flat tax on foreign income for HNWIs
- Forfettario 15%/5% regime for sole traders
- Large market, strong brand and EU access
- Startup innovative status incentives
Watch out for
- High combined taxes (IRES + IRAP ~27.9%, top personal rate 43%+)
- Complex bureaucracy and slow notary process
- Flat tax rose 50% in 2026
- Banking and codice fiscale/PEC set-up take time
- Social contributions are heavy
Best for: High-net-worth individuals using the flat tax · Freelancers using the forfettario regime · Founders with a European customer base
Italy: common questions
What is Italy's flat tax for new residents?
A substitute tax on foreign income: EUR 200,000 per year for those who became residents before 2026 and EUR 300,000 from 2026, plus EUR 50,000 per family member (previously EUR 25,000). It can last 15 years and applies to worldwide foreign income and gains, but not Italian-source income.
Can a foreigner open an S.r.l. in Italy?
Yes. A notary must sign the deed; foreigners can use a power of attorney. You need a codice fiscale, a registered address, PEC email and digital signature. Expect 2–4 weeks and USD 2,500–5,500 in first-year costs.
What is the corporate tax rate in Italy?
24% IRES plus 3.9% IRAP (regional production tax), a combined burden of roughly 27.9% for profitable companies.
Does Italy have a digital nomad visa?
Yes. Since April 2024, non-EU remote workers earning about EUR 28,000 per year with health insurance can apply, and the permit leads to residence and Italian taxation.
Is Italy's forfettario regime available to foreigners?
Yes, if you are an Italian tax resident with a VAT number, revenue under EUR 85,000 and no excluded activities. Tax is 15% (5% for five years for new activities), with no VAT charge or deductions.
Sources
- Agenzia delle Entrate
- Italian Ministry of Foreign Affairs – Visas
- PwC Worldwide Tax Summaries – Italy
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Not tax or legal advice. Rates and rules change; we check official sources and update every page, but verify with a licensed adviser in the country before acting. Spotted something out of date? Use the correction form below.