Corporate & commercial Law

Business Registration and Success in Italy: Common Challenges for Foreigners

milan skyline business in italy

Some of the most common reasons foreign businesses shut down in Italy are the complex regulatory environment, the complex labor market, and quite simply, language barriers. With many different legal considerations, it can be difficult for foreign businesses to keep track of everything. Now, we will discuss some of the significant legal considerations that foreign businesses face: employment law, intellectual property protection, contractual agreements, and regulatory compliance. 

Employment Law

Of course, when operating a foreign business in any new country, there are many legal considerations. One significant consideration is that Italian labor laws are extensive. These laws extend over numerous categories, including: 

  • Employment Contracts: In the Italian workplace, there are various types of contracts. Each one of these contracts is required to follow all legal regulations, in terms, rights, and conditions.
  • Working Hours: In Italy, the typical work week does not exceed 40 hours. However, the overtime law is not completely consistent, and it depends on numerous factors.
  • Wages and Benefits: While Italy does not have a set minimum wage, it is important to pay employees a respectable wage. Foreign businesses must also be aware of Italian laws regarding vacation days, sick days, and other benefits.
  • Leave of Absence: Businesses and employers must follow the laws surrounding personal leaves of absence. For example, they must offer maternity leave that is consistent with Italian law.
  • Health and Safety: Health and safety is prioritized, and all businesses must comply with the Italian regulations. 

ILF will guarantee that you and your business are fully aware of all employment laws and regulations before opening in Italy.

Intellectual Property Protection

When opening a foreign business in Italy, protecting your business’s intellectual property is crucial. You need to register your trademark, protect your know-how in terms of patents and designs. In addition, it is essential to make sure you do not violate another business’s intellectual property. 

Businesses must stay vigilant and consider various things that protect intellectual property, including:

  • Patents: Legal protection for inventions. In Italy, they are granted by the Italian Patent and Trademark Office.
  • Trademarks: Distinguishable signs used to differentiate one business from another. In Italy, a trademark is obtained through the Italian Patent and Trademark Office or through common law rights.
  • Copyrights: Protection of original works of authorship (literary, musical, software, databases, architectural designs, etc.), and in Italy, copyright does not require registration. Still, you can register your work with the Italian Society of Authors and Publishers to provide evidence and enforcement. 
  • International treaties: Outline the minimum standards for intellectual property protection.
  • Enforcement: To prevent infringement and protect intellectual property assets, civil litigation, criminal prosecution, and administrative proceedings are carried out.

By partnering with ILF, we will ensure your business’s intellectual property is fully protected and you are not violating the intellectual property of another business.

Contractual Agreements

Foreign businesses operating in Italy must be aware of several contracts and agreements. Some contractual agreements to note are:

  • Commercial Contracts: Contracts for the sale or purchase of goods or services
  • Employment Contracts: Outline the relationship between employers and employees
  • Intellectual Property Contacts: Detail rights regarding creation, use, licensing, and transfer of intellectual property rights
  • Distribution Agreements: Establish the relationship between suppliers and distributors. The agreement includes terms about marketing, pricing, inventory, termination, etc
  • Franchise Agreements: Outline the terms and conditions between the franchisor and franchisee 
  • Joint Venture Agreements: Establish rights and responsibilities of each partner in a joint venture
  • Real Estate Contracts: Agreements for the sale, purchase, or rental of a property
  • Agency Agreements: Authorize the agent to act on the principal’s behalf in certain duties or transactions
  • Technology Transfer Agreements: Include terms regarding licensing fees, royalties, confidentiality, warranties, and more

With so many different types of contractual agreements to keep track of, foreign businesses can struggle. When you work with ILF, you will be made aware of all contractual agreements relevant to your business, and we will help you manage them.

Regulatory Compliance

Operating in a different country requires compliance with that country’s regulatory measures. These regulations will differ from those of your own country, so it is easy to forget some of them. Some of the important factors that may differ country to country are: 

  • Company Registration: In Italy, company registration often involves registering with the Italian Business Register. Depending on the business type, the requirements will differ.
  • Taxation and Tax Residency: Foreign businesses must pay Italian taxation on their income that comes from Italian sources.
  • Commercial Regulations: Businesses must pay attention to commercial regulations, like contracts, sales transactions, and advertising.
  • Import and Export Regulations: These regulations encompass regulations governing the movement of goods across borders. Trade restrictions and custom duties are examples that fall under this category. 
  • Environmental Regulations: Waste management, pollution control, and sustainability mandates all fall into this category of regulations that businesses must comply with.
  • Health and Safety Regulations: These regulations are established to ensure safety in the workplace, and all businesses must comply with these guidelines.

With so many different factors, it is easy for foreign businesses to overlook the differences of regulations between countries. We recommend partnering with ILF, as we fully understand Italian law and stay informed on legal changes, which will minimize your legal risks.