Italy Country Facts

We provide comprehensive information regarding, Culture, Work life, Taxation, Visa’s & immigration, Labour Law, recruiting in your country of choice and employment contracts.

Global Expansion Made Easy for You

Expanding into Italy generally comes with challenges, however, partnering with us and using Employer of Record (EOR) eliminates the frustrations you could encounter.

Italy Visas, Work Permits and Migration

Italian visa, residency and permit regulations require expert guidance as they vary according to the country foreign nationals live in – the European Union, the European Economic Area and other foreign nationals are all affected by these complex regulations.

Our team is trained to research the latest information on Italian visas and work permits – therefore, we created a guide to introduce you to the rules and requirements

What Types of Work Visas, and Permits for Italy are there?

Italy forms part of the Schengen area – so citizens from this area are free to migrate throughout without a need for a visa. For those outside the Schengen area, and non-EEA individuals, there are a few visas/permits that they may apply for.

Types of Permits:

Italian residence permit – An Italian residence permit must be obtained by the foreign national upon arrival to Italy. It allows them to live in Italy for more than 3 months and is valid for 2 years.

Work Permit – For non-EEA citizens, this is part of a work authorization that must be applied for by the employer, on behalf of their prospective employee.

Types of Visas:

Airport Transit Visas (Type A) – Allows the individual to transit through the international area of a Member State’s airport.

Uniform Schengen Visas (Type C) – the individual may enter and move freely in all countries of the Schengen area. This visa type is valid for a maximum of 90 days in a 180-day period.

Visa with Limited Territorial Validity (Type C) – This type of visa only applies for the territory of the issuing state, or for the territory of some states, but not all of them.

Long-Stay Visa (Type D) – this type of visa permits the individual to stay within the territory that has issued it for more than 90 days, with the maximum validity depending on the visa’s use.

Italian Tax Laws

Dealing with tax, payroll, and employment regulations for your staff from overseas is a tricky process. Italy is no exception, with fines, sanctions and other penalties applying for not complying with the complex and many-layered aspects of taxation.

Global expansion is a great way to grow your business and Italy offers many appealing opportunities. However, the tax laws can be complex and require time-consuming research. By using our PEO service we will take care of the complicated legwork so that you can focus on your business goals in Italy.

Overview of Taxes in Italy

  • Individual Income Tax – Progressive
  • VAT – 22%
  • Corporate Income Tax – 24% (income tax), 3.9% (regional production tax)
  • Employer & Employee Social Security Contributions – 29-32% (Employer), 10% (Employee)
  • Capital Gains and/or Withholding Taxes – 26% (yields on loans and securities)

Italy Individual Tax – Single, Married

In Italy, the individual’s ability to pay income tax depends both on their residency status, as well as the source of their income. All Italian residents are taxed on their worldwide income, regardless of their nationality, whilst non-residents are only taxed on their Italian-sourced income.

Income Tax in Italy is progressive, based on the amount of income that the individual receives. This applies for both residents and non-residents. For income in 2021, those rates are:

  • EUR 0 – 15,000: 23%
  • EUR 15,001 – 28,000: 27%
  • EUR 28,001 – 55,000: 38%
  • EUR 55,001 – 75,000: 41%
  • EUR 75,001 +: 43%

In Italy, there are two types of income tax returns that can be done, which depend on specific tax rules:

  1. Mod. 730 (Modello 730) – this is a simplified tax return, which only applies for incomes subject to ordinary taxation, and taxpayers must meet the following conditions in order to qualify for this return type:– the individual must be an Italian tax resident in the year of filing this return, as well as the previous one
    – the individual has a withholding agent (or employer) in Italy in the period of the filing of the Italian income tax return
    – the individual does not have a VAT numberFor this type of tax return, the taxpayer is not obliged to prepare any calculation – the balance is withheld by the employer or refunded to the employee in their pay slip. For this type, married couples can file jointly.The Mod. 730 must be submitted to the Italian Revenue Agency by the 30th of September, via electronic filing.
  2. Dichiarazione dei Redditi – this tax return type is applicable in cases where the Mod. 730 is not applicable. The individual must then file this tax return through self-assessment.This tax return type must be filed by the 30th of November via electronic filing. Married couples cannot file this tax return type jointly.On employment income, the Italian employer acts as a “withholding tax agent” and must effectively withhold both income tax on the basis of the progressive income tax rates, as well as social security benefits.

The employer is also obliged to issue an annual employment certification or Model CU, within or before the 31st of March of the following year. This certificate must certify the individual’s taxable income as well as the withholding taxes done for them during the fiscal year.

If foreign individuals have no employment relationship with an Italian company, they are then obliged to declare their tax income through the second tax return type, Dichiarazione dei Redditi or the ‘self-assessment’ method.

Other income taxes

Individuals are also subject to two other types of income taxes that an individual must compensate:

  • Regional income tax – this tax depends on the individual’s region of residence in Italy, and ranges from 1.23% – 3.33%.
  • Municipal income tax – this tax depends on the individual’s municipality of residence in Italy, and ranges from 0% – 0.8%. Municipalities also have the option to establish progressive tax rates that apply to the national income bracket.

Italian Entity Set Up

Global expansion into Italy generally means that you need to set up an in-country entity. However, by partnering with us you create the possibility to bypass this process and utilize our Italian entity. By using our PEO service we take care of the complicated paperwork.

Expanding into a new country is always an adventure, but we believe this adventure should be exciting instead of just frustrating and time-consuming. Therefore, we have been supporting companies in over a hundred countries with their expansion plans.

How to set up an Italian Subsidiary

Setting up a subsidiary requires these steps:

  1. Decide on the company type that suits the nature of your business, your business goals and matches your own capabilities to meet establishment requirements. Common company types include: the Limited Liability Company (SRL), the Public Limited Company (SpA), The Free Zone Company, Branch Office (Filiale), Representative Office (Ufficio di Rappresentanza)
  2. Obtain a local business address in Italy.
  3. Decide on a company name and check on its availability.
  4. Prepare the appropriate registration documents.
  5. Open a local business bank account in Italy and deposit the appropriate share capital.
  6. Notarize registration documents at a notary’s office and acquire an Apostille Certificate for them.
  7. Register your company at the Trade Register and the Register of Enterprises.
  8. Register with the Tax Revenue Authority.
  9. Register with the National Social Security Institute.
  10. Register for a VAT Number.
  11. Receive a Certificate of Incorporation and a Company Registration Number.

Benefits of setting up a Subsidiary in Italy

Italy is an attractive destination in Europe for subsidiary establishment and growing a business’ influence. There are also other significant benefits to establishing an entity in Italy:

  • Subsidiaries in Italy are taxed the same as any other resident company.
  • Subsidiary entities in Italy also benefit from close to 100 double taxation treaties, making the country an investor-friendly tax regime with an extensive network.
  • Businesses in Italy have a gateway to the European Single Market, with access to over 50 million consumers in over 30 national markets.
  • Subsidiaries in Italy also benefit from Italy’s strategic location, with its advanced infrastructure offering access to the rest of the European Union, as well as Northern Africa and the Middle East.
  • The Italian government offers numerous tax credits and incentives for subsidiaries and other foreign investments, especially in research and development.
  • Italy is one of Europe’s largest manufacturers, with a large and extensive network of experts in a wide range of sectors.
  • Italy spends over EUR 25 billion in research and development, making it the fourth highest investor in Europe. The government agency, Invitalia, also provides extensive incentives to both local and foreign companies by financing projects in sectors such as industry, tourism, and environmental protection.

The Italian Market

Foreign companies who wish to expand into Italy will be met with an attractive business hub that includes a highly educated workforce, attractive tax rates and incentives, as well as low labor and administration costs.

However, setting up shop in an unfamiliar place comes with its own challenges. Foreign businesses must comply with employment, tax, payroll, and corporate legislation whilst ensuring that their employees are working productively and efficiently.

Starting a Business in Italy

Italy’s geographical position benefits from access to diverse marketplaces in Europe, North Africa, and the Middle East. With strong retail services, communications, and manufacturing sectors, as well as high-quality logistics and infrastructure, this creates an attractive environment for any business owner who seeks to expand their business.

To start a business in Italy you must go through a company registration procedure, which is straightforward and designed to be executed easily. These steps can be done in person or online through the Trade Register website.

The necessary steps to start a business in Italy include needing to:

  • Decide on the company type that suits the nature of your business, your business goals and matches your own capabilities to meet establishment requirements.
  • Obtain a local business address in Italy.
  • Decide on a company name and check on its availability.
  • Prepare the appropriate registration documents.
  • Open a local business bank account in Italy and deposit the appropriate share capital.
  • Notarize registration documents at a notary’s office and acquire an Apostille Certificate for them.
  • Register your company at the Trade Register and the Register of Enterprises.
  • Register with the Tax Revenue Authority.
  • Register with the National Social Security Institute.
  • Register for a VAT Number
  • Receive a Certificate of Incorporation and a Company Registration Number.

Expanding into Italy

Foreign entities wishing to expand into Italy will be met with a successful economy that benefits from attractive corporate tax rates and tax reliefs, a highly-qualified talent pool and attractive labor and administrative costs – which is provided to all entities that enter the market.

Italy’s location benefits from its proximity to all of Europe’s leading markets, which can be reached in a matter of hours or days, according to the type of transport taken.

The country’s position also offers easy trade between continents, with the help of its strong infrastructure. Expanding one’s business into Italy creates a lot of opportunity for expansion both nationally – particularly to popular district capitals such as Rome, Florence, Venice, Milan, Naples, and Bologna, which are popular tourist and commercial destinations – and internationally.

Italian Business Facts

  • Capital City – Rome
  • Population – 60.32 million
  • Cities – Milan, Naples, Turin, Palermo, Genoa, Bologna, Florence, Bari, Catania, Venice, Messina, Padua, Trieste, Brescia, Parma, Taranto, Prato, Modena, Perugia, Ravenna, Livorno, Cagliari
  • Official language(s) – Italian
  • Economy/GDP (2021 estimate) – 2.6 trillion
  • World Ranking (Ease of Doing Business) – 58th
  • Leading sectors – tourism, machinery, robots, aircrafts, electronics, defense systems, iron and steel chemicals, food processing, pharmaceuticals, textiles, motor vehicles, clothing, footwear, ceramics, electric power
  • Main exports – Engineering products, textiles and clothing, production machinery, motor vehicles, transport equipment, chemicals, minerals, foodstuffs, beverages, tobacco, and nonferrous metals
  • Main imports – Engineering products, chemicals, transport equipment, energy products, minerals and nonferrous metals, textiles and clothing, food, beverages, and tobacco
  • Main trading partners – Germany, France, United States, United Kingdom, Switzerland, Spain, Belgium, Poland, China, Netherlands, and Russia
  • Government – Unitary parliamentary constitutional republic
  • Currency – EUR, Euro

Advantages and Challenges of the Italian Market

The Benefits:

  • Italy ranks as 58th out of 190 countries in the World Bank’s report on the Ease of Doing Business Report, which means that it is relatively easy to incorporate companies.
  • Italy-based companies are in easier geographical reach of 500 million potential customers in the EU, as well as countless more in nearby regions of North Africa and the Middle East.
  • Italy’s skilled workforce offers a better overall-cost performance than its European partners – it is lower than the Eurozone average.
  • Italian companies also benefit from the one-stop-shop model of the Trade Agency, that provides support and assistance in new projects and expansion.
  • The Italian government offers numerous tax credits and incentives for subsidiaries and other foreign investments, especially in research and development.

The Disadvantages:

  • Starting a business in Italy may take less time, but costs more than the EU average.
  • Regional regulatory disparities – local regulations and procedures for the same business activities vary according to the municipality, and the local authorities determine the implementation of national laws and regulations.
  • Fines and penalties for failing to comply with employment, taxation, and immigration regulations.
  • Business practices and cultural barriers.
  • Managing payroll and HR obligations of international employees remotely.

The 100 per cent solution is to consider the alternative to setting up a subsidiary by working with Bradford Jacobs. Our Professional Employer Organization (PEO) international recruitment specialists will find the perfect fit for the roles you need to fill.

Limited Company / Subsidiary or Branch in Italy?

In Italy, a subsidiary entity is considered a legally separate entity from the parent company, with independent administration and management, which provides freedom to explore the local market and create international credibility.

A branch, however, does not have any independence from the parent company – but it is taxed and reported similarly to resident entities, and is limited in its commercial activities.

Italian Contracts

If a foreign company is looking to hire resident employees as part of their international expansion into Italy, they must comply with the recruitment regulations concerning tax, social security contributions, employment law, as well as collaborate with or adhere to any collective bargaining, trade unions, or work council agreements.

National employment legislation, collective agreements, and works council agreements are the main sources of employment law in Italy, which govern employment conditions, benefits, and health and safety regulations. The conditions performed vary according to the industry and sector.

It is important for the employer to know the existing labor laws and employee entitlements, as well as collaborate with the appropriate local employment organizations.

In Italy, an employment contract is not required by law to be concluded in writing. Oral contracts are also practiced. However, for a contract to be valid, certain clauses must be in writing, and they must be presented to the employee within 30 days of starting employment. This document must include:

  • Name and address of the employer and the employee
  • The place of work
  • The commencement date of employment
  • Anticipated duration of employment, specifying whether it is indefinite or fixed term
  • The probationary period
  • The job title or category
  • The employee’s salary
  • The duration of annual leave
  • The working hours
  • The length of the notice period (in case of termination)
  • A reference to any collective bargaining agreements, works or services agreements that are applicable to the employment relationship (if there are any)

There are a few types of contracts that can be applied in Italy:

  1. Indefinite employment contract – the standard type of employment contract in Italy, and as a rule, employment contracts are entered into for an unlimited period. Termination of this contract requires a notice period and a set of dismissal policies.
  2. Fixed-term employment contract – This contract is set by the national collective agreements. Employment law in Italy states that the overall number of fixed-term contracts must exceed a threshold of 20% of the permanently hired workforce. This contract type is limited to a maximum of 36 months and can be extended.
  3. Part-time employment contracts – This contract type must be in writing and specify the employees’ hours of work. The pay and other entitlements of part-time workers are also to be included and are pro-rated to those applicable to full-timers. Two ancillary clauses may also be added to the contract, which can provide the employer a wider flexibility – “elastic clauses” which can permit an employer to increase working time; and “flexible clauses”, which can permit an employer to vary working hours during the day.
  4. On-call job contracts – this type of contract must be drafted in writing, and employees falling under national collective agreements are also eligible to receive an additional 20% of their wages. Employees signed under this contract must declare their availability to work over a certain period, during which they can be called in with short-term notice. In some cases, conditions may provide that the employee is bound to work if called by the employer.
  5. Apprenticeship contracts – This contract type is open-ended and applies for vocational training positions. The employer can hire apprentices within certain thresholds (depending on the number of employees hired) and ensure that the apprentices acquire professional skills and qualifications.
  6. Temporary agency contracts – this contract type can be on a fixed-term or open-ended basis and can only be agreed on with qualified employment agencies. Workers under these contracts must benefit from the same legal and economic conditions available to employees of the user’s or end client’s company. Employers cannot use this contract to replace employees on strike, laid-off or involved in collective dismissals.

Most changes to an employment contract must be made with the consent of both the employee and employer. If the employer wishes to amend the employment terms, they must discuss and agree to the changes with the employee before doing so.

Employee Benefits

Happy and satisfied employees make your business thrive and lead to even better profits. However, the specific benefits for employees in Italy might not all be familiar to you yet. By using our PEO and EOR service we can provide compliant labour contracts for employees in Italy including local benefits.

When expanding your company’s presence in a new country, you need to ensure compliance both in your employment contracts and benefit guarantees. These involve social security contributions, sick leave, health insurance, and unemployment, to name a few. In Italy, benefits are guaranteed by national legislation as well as collective agreements with trade unions or workers’ councils.

What Compensation Laws exist in Italy?

In Italy, compensation laws are set by national legislation and the civil code, but the types of compensation can vary according to the sector the employees are in, regulations of collective agreements, and the internal regulations of the company.

For example, there is both a 13th month and 14th month pay in Italy, but employee bonuses can be given at the discretion of the employer or can be negotiated as performance clauses in the employment contract.

There are, however, benefits and/or compensation that are guaranteed by national legislation:

  • Minimum wage: Italy does not have a government-regulated minimum wage and is one of the few European countries that do not have one. There is no minimum wage at regional level either.The minimum wage rate is determined by collective bargaining agreements (according to their sectors or industries), or individual contract negotiation – but this is not always applied.Employees, however, are entitled to a wage that is equal with the quality and quantity of their work and can guarantee a decent lifestyle for themselves and their family.
  • Social Security Contributions: Both employers and employees must contribute to National Insurance, which depend on the employee’s salary. Social security contributions are also capped at a certain amount. Social security contributions go towards a variety of funds.
  • Termination and Severance: During employment termination, a written notice must be given to the employee in cases of all types of termination, except in cases of dismissal due to serious disciplinary reasons.Notice periods are set in collective agreements or individual employment contracts, and are based on the employee’s length of service, position, and level.
  • Work Hours and Breaks: The normal working week in Italy is 40 hours, however, this may vary according to the industry and sector. Any work done in excess during the work week is considered overtime, according to Italian law. However, it must be with a maximum of 48 hours.The lowest statutory rates for overtime are 10%, but this can be raised by collective bargaining.
  • Sick Leave and Payments: Employees are entitled to paid sick leave in case of sickness of injury, for a specific period, which varies according to the relevant collective bargaining agreement or individual contract.Sick leave is partly paid from the employer, and partly paid from the National Social Security Body – however, this depends on the employee’s qualification and length of service, as well as the business sector.
  • Holiday and Vacation Leave: Employees in Italy are entitled to a minimum of 28 days, or 4 weeks of paid annual leave. Collective bargaining agreements and individual contracts may provide a longer period of holiday entitlement.Two of those weeks can be taken consecutively, at the employee’s request. Two of the four weeks can be taken in the year they were given, whilst the other half can be carried over to the next one for an additional 18 months.
  • Unemployment: Dismissed employees are entitled to, under certain conditions, an unemployment benefit – known as Nuova Assicurazione sociale per l’impiego (NASPI).The benefit is approximately equal to EUR 1,300 per month, which is paid for several weeks. It is equal to half of the contribution weeks of the previous four years. Employers contribute to the benefit’s funding.

Social Security in Italy

Both employers and employees in Italy must contribute to social security contributions, which are settled through the employee’s salary. These contributions are withheld from the employee’s salary, which are then sent to the tax office monthly.

Employers are obliged to make their own contributions to the social security funds monthly, based on the employee’s salary.

Both employer and employee social security contributions are like so:

Employer’s Social Security Contributions

  • Social Security 29-32%
  • Injuries at Work Insurance (INAIL) 0.4%

Employee’s Social Security Contributions

  • Social Security 10%

Like income tax, social security contributions are affected by categories of employment, as well as seniority. The figures listed above are the general rates.

The contributions listed above go towards the following funds:

  • The National Pension Fund (INPS)
  • Unemployment
  • Sickness
  • Maternity
  • Temporary unemployment compensation
  • Social mobility
  • Other minor funds

Statutory Employer Costs in Italy

Statutory Costs in Italy include meeting the standard employee wages, and income, social and corporate taxes.

Employers must meet the minimum wage for their sectors and industries, and ensure that the necessary payments from their wages to the local authorities are made on time, which include:

  • Income Tax – income tax is to be withheld from the employee every month and paid by the employer monthly to the local tax authorities.
  • Social security – social security payments are to be made by both the employer and the employee monthly, which contributes to pension schemes and health insurance.
  • Corporate Tax – corporate taxation on income and profits are mandatory for all businesses in Italy.

Italian Top Talent

Recruitment can be a tricky business, especially when a company is venturing to unfamiliar countries and exploring new markets. This is where we come in to oversee the process for you – Bradford Jacobs’ expertise and over 20 years of experience in international recruitment services is indispensable for expansion into Italy.

Hiring the right talent in Italy to expand your company can result in a thriving business with numerous opportunities. However, the recruitment process can be complicated when you have no physical presence in Italy yet. Our PEO and EOR service can be the solution for your company.

The Recruitment Process in Italy

Employers in Italy can use a variety of recruitment methods to find the best applicants for their businesses, such as external recruitment methods (local job centres, recruitment agencies, job boards, LinkedIn, and other online advertising), as well as internal recruitment methods (such as providing career development opportunities and promotion to the company’s workforce).

From there, once the right candidate is found, the employer must follow thorough staffing and registration procedures, which include:

  • Registering with the Italian Tax Agency (Agenzia delle Entrate)
  • Registering with the National Social Security Institute (Istituto Nazionale Previdenza Sociale)
  • Registering for Insurance Against Accidents at Work (Istituto Nazionale per l’Assicurazione contro gli Infortuni sul Lavoro)
  • Registering with The Employment Agency (Provincia)
  • Creating employment contracts
  • Applying special expatriation status (if applicable)
  • Calculating monthly salary and creating pay slips
  • Researching available tax-free allowances
  • Submitting wage tax returns and national insurance forms
  • Corresponding with involved parties
  • Creating annual accounts, administration, and year-end statements
  • Creating payment schedule for wage tax, national insurances, and net wages

Legal Checks on Employees in Italy

When commencing the recruitment process in a foreign country, employers must consider their legal obligations regarding personal information. Employers must carry out background checks, which are only considered fair and legal if they relate directly to a job and are necessary for reaching a decision on recruitment.

These background checks may also only be carried out with the consent of the candidate, and all employee information must be protected according to GDPR and data protection laws.

Nevertheless, employers recruiting in Italy may ask for the following background checks or ‘information/pre-employment verification’ (following certain conditions):

  • Criminal record checks: a private employer does not have the right of access to an applicant’s criminal record. This kind of background check may also only be requested if it is in direct relation to the applicant’s future tasks and responsibilities in the job in question.
  • Employment history and qualifications checks: Employers have the right to verify statements made in their job application, such as the academic qualifications, and original copies of reference letters. In the case of reference checks, the employer cannot contact previous employers without the applicant’s consent.
  • Credit history check: A credit history check is only permissible if future duties involve being in a position of particular financial trust.
  • Health checks: Requests for a health certificate and/or a medical/physiological checkup may be admissible if the position requires a certain level of physical and/or mental fitness. However, this must occur with the applicant’s consent, and the results of the checks may only be shared with the applicant’s consent.
  • Immigration compliance: Employers are required to check that job applicants in Italy possess the necessary and immigration papers to work in Italy.

Personal data from rejected applicants may be kept only for six months, without the applicant’s express permission.

Basic Facts on Hiring in Italy

  • An employer’s questions during an interview are regulated and restricted by data protection legislation – they must directly relate to job specifications and requirements.
  • Terms and conditions of employment in Italy are regulated by national legislation, as well as trade unions and collective agreements.
  • For onboarding employees, you will need the following documentation: A social security number, a tax identification number, personal identification, a work permit, and a residence permit.
  • Employers must follow anti-discrimination laws throughout the process of recruitment, which prohibits discrimination on the basis of race and ethnic origin, gender, religion or beliefs, disability, sexual orientation, and age.
  • Collective bargaining is an important part of recruitment in Italy. Collective bargaining mainly takes place at two levels – at industry level, and at company or district level. National-level agreements between unions and employers are also used to implement EU-level initiatives. Collective agreements are used to agree on employment conditions such as wages, working hours, leave, work organization and information rights. An ETUI study on collective bargaining in 2019 estimated that these types of agreements cover about 80% of all employees in Italy (at industry level). Industry agreements are valid for three years.
  • Administration and enforcement of employment requirements are governed by The Ministry of Labor and Social Welfare.
  • Regarding employment contracts, there is no statutory requirement to provide an employment contract in writing, as oral contracts are also valid, as well as no requirement for it to be in Italian.
  • However, for any employment contract to be valid, the employer must inform the employee of certain information, in writing, within 30 days of starting employment.
  • Standard employment contract types include indefinite and fixed-term contracts.
  • The standard working time is approximately 40 hours per week.
  • There is no minimum wage in Italy, but the average monthly salary is regulated by collective bargaining agreements and may differ according to the industry and sector.
  • Working hours should not exceed 48 hours in a week, including overtime. Overtime is usually compensated with an extra statutory pay of 10%. Compensation, however, varies according to the terms of the collective agreement or contract.
  • In a week, employees are entitled to at least one rest day.
  • Employers are obligated to with-hold and pay employees’ personal income tax and social security contributions monthly.
  • During employment termination, a written notice must be given to the employee in cases of all types of termination, except in cases of dismissal due to serious disciplinary reasons.
  • Notice periods are set in the collective agreement, and payment is given for unused holiday leave. Severance pay is also given in all cases of termination.
  • The maximum term of probationary periods in Italy is 6 months. The length, however, may vary according to the terms of the applicable collective bargaining agreement.

Work Culture

To do business in Italy, it is vital to have a good understanding of its business or work culture. Making the right impression with the right people is the key to success in Italy, and it is important to back this up with the right research on the market and potential business associates.

Italian business culture is hierarchical, flexible, and sociable, and their working practices are both focused and person-oriented. Employees in Italy work long hours and are very productive. Communication between peers is both personal and professional.

Nevertheless, there is a growing appreciation of striking a work/life balance through flexitime and taking opportunities for remote working, but in the office itself etiquette still plays a key role. Here are a few tips and working practices you should be familiar with before starting on your international expansion into Italy:

  • Hierarchy: Italian business culture respects the hierarchical structure – job titles and responsibilities are important, and your position in the company may determine how one can speak with or address superiors and subordinates. Decisions are made from up high, and whilst subordinates may express their opinions, they must be cautious about giving out explicit advice or constructive criticism.
  • Work Relationships/Friendships: In Italy, locals generally like to establish relaxed personal relationships. They tend to be curious, asking questions about you, your family, and personal interests. This is important to the establishment of trust in a business relationship.
  • Introductions: Introductions in Italy tend to be formal. Shake hands with everyone in the room, and address people by their title and last name. Before meetings begin, business cards are exchanged, and they should have an Italian translation on the reverse.
  • Dress Code: A person’s presentation plays an important role in the Italian culture, and a fashionable style is considered as a sign of a person’s social status. In Italy, a conservative style is mostly accepted, but more informal clothing is common outside of large companies and financial circles. The dress code for men is dark suits, and the dress code for women is dark, elegant pant suits or skirt suits, accessorized with simple jewelry and makeup.
  • Punctuality: Punctuality is not a main concern in Italy. Work plans are not taken too strictly, so often some flexibility is built into a deadline. For meetings, guests are expected to be on time for meetings, but be prepared for some delay, due to waiting for their Italian business associate.
  • Negotiations: Business communication is generally carried out in English, although the use of a professional translator is common amongst businessmen in Italy. Negotiations tend to be lengthy and are conducted slowly due to the hierarchical decision-making process. Italians also tend to carefully evaluate advantages and risks.
  • Agreements: The decision-making process is quite lengthy in Italy, due to the hierarchical structure of many of its businesses. Verbal agreements and handshakes bond an agreement. However, most agreements are in writing. It is also expected of business associates to act on their part of the deal, as unreliability is looked down upon.
  • Communication: In Italy, discussions can be very lively. Italians often say what is on their mind, and it is common for them to express any disagreement and constructive criticism during meetings and negotiations.
  • Meals: Hospitality plays an important part in Italy’s business culture. Business meals are used to cement relationships, as well as discuss business. Refusing an invitation will most often be seen as an insult.

Italian Minimum Wage

Italy does not have a government-regulated minimum wage and is one of the few European countries that do not have one. There is no minimum wage at national or regional level either.

The minimum wage rate is then determined by collective bargaining agreements on a sector-by-sector basis, or individual contract negotiation – but this is not always applied. However, employees must receive a salary that is equal with the quality and quantity of their work and is also sufficient to guarantee a decent lifestyle for themselves and their family.

Wages are not capped, but caps are considered for the purpose of social security contributions.

Probation Periods in Italy

In Italy, probation periods may vary according to the individual or collective agreement, but they are limited to a maximum duration of six months. The probationary period must be included in the employment contract.

Working Hours in Italy

The normal working week in Italy is 40 hours, however, this may vary according to the industry and sector.

In the private sector, Italians tend to work long hours – they are typically 9am to 1pm, and 2:30pm to 6:00pm, Monday to Friday. However, you will find employees still at work after 6pm, which is seen especially with higher management.

In the public sector, typical working hours are from 8am to 2pm, from Monday to Saturday. Many public offices tend to compensate for not working on Sunday with working some afternoons.

Workers are also entitled to a rest period of at least 24 hours every seven days, typically not working on Sundays.

Lunch breaks are kept to a minimum – however, when business lunches with Italian business partners, they tend to last long. Business lunches are used to build or reinforce a personal relationship.

Overtime in Italy

Any work done in excess during the work week is considered overtime, according to Italian law. However, it must be with a maximum of 48 hours. The lowest statutory rates for overtime are 10%, but this can be raised by collective bargaining.
If not specified in the employment agreement, overtime cannot exceed 48 hours weekly or 250 hours yearly.

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