Italy Market Entry
- Market entry
- Forms and conditions of operation on the market
- Marketing and Communications
- Issues of intellectual property protection
- Public procurement market
- Payment terms, payment ethics and resolution of commercial disputes
- Visas, fees, specific conditions of travel to the territory
- Employment of citizens from the Czech Republic
- Fairs and events
According to cheeroutdoor.com, Czech companies that are interested in entering the Italian market should first target a specific region, conduct market research and analyze the conditions for the use of products on the market. Export companies should perform preliminary price calculations and an objective comparison with the competition’s offer. The occurrence of industrial clusters, within which individual sectors are concentrated, is typical for Italy. The Italian market is completely full in a number of fields, and new products usually have a chance to be used if they are sold at a lower than usual price, or if such a product has exceptional technical parameters. Speed and accuracy of delivery according to the agreed conditions is a matter of course. The Italians are exerting great pressure on the price, looking for cheaper supplies from non-European countries, or displacing production outside the Apennine peninsula. However, as a result of the pandemic, support for the return of production to Italy or EU countries is being considered for strategic sectors. Italian awareness of cheap Czech goods often prevails. It is necessary to properly prepare for negotiations on business terms and leave room for an additional discount. In practice, it is very common that Italian companies do not recognize the sales conditions of the Czech supplier and insist on their own. It is very important that Czech companies insist on partial or full payment of goods in advance.
The usual prices on the Italian market for a number of commodities can be checked – for example, the Milan Chamber of Commerce regularly publishes summary material that contains wholesale price indications for selected types of goods. To promote products, it is advisable to use several ways at the same time: follow trade fair events – participate as a visitor or exhibitor and use information, industry studies, lists of members and news published by business associations – e.g. information about prices of real estate, raw materials and products in online wholesale offered for a fee by the Milan Chamber of Commerce.
In the field of food and non-food retail in Italy, compared to most other EU countries, small independent shops still have a significant share. Major retail chains in Italy include Coop, Conad, Eurospin, Billa, Bric, Carrefour, Colmar, Crai, Despar, Decathlon, Esselunga, Emmelunga, Gigante, IKEA, Iper, Lidl, Leroy Merlin, Pam, Rinascente and Selex.
When concluding business contracts, from the point of view of preventing possible future disputes, it is in the interest of both partners to conclude all contracts in writing. The so-called general conditions on which the business partners mutually agree are decisive for the given contract. It is advisable to put them in writing (this practice is common especially with standard commodities or services – the conditions are stated in fine print on the back of the contract). The conditions specified in this way can be referred to in the event of a dispute.
It should be borne in mind that Italy consists of twenty regions that are very different from each other. Only a very small fraction of large companies cover the entire Apennine peninsula with their distribution network. Due to the differences between individual regions, it is also likely that Czech products (mainly consumer goods, food) will not be suitable for all regions. Italy is characterized by a large number of small and medium-sized industrial enterprises, often family-owned in internal trade. It is a good idea to choose one or two regions to begin with and organize sales as an exclusive/non-exclusive importer or sales representative. For the south, it is desirable to find a representative with knowledge of local conditions. The promotion of Czech goods in Italian regions is helped, among other things, by the pro-export actions of the Ministry of Foreign Affairs of the Czech Republic, the Chamber of Commerce of the Czech Republic and the PaulTrade agency. numerous seminars,
Forms and conditions of operation on the market
Despite all efforts to simplify procedures, setting up a company in Italy remains a relatively complicated and time-consuming matter. Especially for foreigners. Entrepreneurs setting up a company can turn to tax, financial and business advisors (it. “dottore commercialista”) who deal professionally with this issue. However, it is also possible to use the services of a notary or a law firm to establish a company. On the website of the Embassy of the Czech Republic in Rome, you can find contacts for legal offices with Czech-Italian experience, some of which also have a branch in the Czech Republic. When establishing a business company, it is necessary, among other things, to be registered in the commercial register maintained by the local chamber of commerce (Registro Imprese). Some large chambers of commerce (membership is mandatory for all companies in Italy) have specialized counters for foreigners. Branches (it. sede secondaria) can exist in Italy without having to establish separate legal entities. They can be financed through the current account of the parent company, which also appoints the director and legal representative of the branch. Even here, however, the unit must be registered with the relevant chamber of commerce.
The main legal forms of Italian commercial companies
Joint-stock company/Società per azioni (SpA): the articles of association must be in the form of a public document and contain the object of business, the amount of subscribed and paid-up capital, the names and powers of the statutory, supreme and supervisory body, etc. The minimum capital is EUR 120,000. It can be founded by at least two partners.
Limited liability company/Società a responsabilità limitata (Srl): The minimum capital is EUR 10,000. The conditions for establishment are similar to those of a joint-stock company, at the time of establishment there must be at least two partners. This is the most widespread form that combines the advantages of capital and personal business companies.
Public company/Società in nome collettivo (Snc): it usually consists of two or more partners who guarantee the company’s obligations without limitation with all their assets.
Limited partnership /Società in accomandita semplice (Sas): general partners are jointly and severally liable, manage and represent the company, limited partners are liable only up to the amount of their paid-up share.
Società in accomandita per azioni (SapA): a combination of a limited partnership and a joint stock company. Sole proprietorship, sole proprietorship/lavoratore autonomo: is a very common form of business, which requires registration in the commercial register at the chamber of commerce in the place of operation.
A limited liability company is one of the variants most often chosen by entrepreneurs for reasons of limited liability of partners for the company’s obligations.
Marketing and communication
Promotion of products or services in the form of advertising in the press is common. Advertising of goods is also done by sending out prospectuses. Billboards or advertising broadcasts on radio and television can be used. Advertising on the Internet and social networks is also common.
The field of media in Italy is very large and varied.
In addition to many periodicals with distribution throughout the country (e.g. economic daily Il Sole 24 Ore, then Corriere della Sera, Il Messaggero, La Stampa, La Repubblica) there are hundreds of larger or smaller local publications and other media such as TV and radio stations . Small-format newspapers Metro (similar to the Czech Republic), Leggo and City are distributed free of charge in large cities. The spaces of stops and stations in urban public transport are mainly used for the distribution of these printed materials.
Although promotion in the media can influence public opinion, it is a relatively expensive form of advertising. An effective alternative is presentation at international or local fairs and exhibitions, which are very numerous in Italy. The promotion should be in the Italian language.
Leading PR agencies include Alkemy, Marketing Italia, Caffeina, AQuest and We Are Social. The most important HR agencies in Italy are Randstad, Adecco, In Job, Gi Group, e Manpower.
Issues of intellectual property protection
The protection of intellectual property rights in Italy corresponds to the standards of EU countries. However, it is possible to come across copies of consumer goods of well-known brands at street stall sales. The protection of intellectual property in Italy is governed by Law No. 30 of February 10, 2005 “Industrial Property Code”. The Ministry of Economic Development of Italy is entrusted with the management of the intellectual property protection agenda.
Public procurement market
Italian public sector procurement rules correspond to EU Single Internal Market and GATT rules. Public procurement is carried out at both the government and regional levels, with local government procurement volumes sometimes exceeding government procurement volumes, which is related to increasing levels of fiscal federalism.
The contracting authority may require the submission of documents that the supplier:
– is registered in the commercial register
– has the necessary financial resources and economic capacity
– has the necessary technical capacity
In addition, the contracting authorities may request a bank statement, or the presentation of a trade balance sheet or a statement of total turnover for the last three years. Certificates of no debt to the Social Security Administration and to the tax office are also required.
Public tenders are published in official papers: the Official Gazette of Italy (GazzettaUfficialeItaliana ), the Official Regional Gazettes (le Gazzette Ufficiali Regionali) and in Italian dailies or technical magazines, which inform about the tenders issued as part of normal advertising. At the same time, letters are sent to selected suppliers with details of the competition. Tenders for public tenders must be submitted in the Italian language, in the case of a German- or French-speaking autonomous region, they can also be submitted in these two other languages.
The monitoring of announced tenders is carried out on a national scale by the TELEMAT company, which maintains an updated database of newly announced tenders and the results of tenders. Manufacturers of individual components can therefore turn to, for example, the winner of a tender for the construction of a hospital, to whom they can offer their products as subcontractors.
An overview of tendered public contracts, e.g. in the healthcare sector, is available on the website of the Italian Ministry of Health. Another private company that, among other things, offers advice to potential participants in tenders in the health sector is, for example, Sanità Appalti, on whose website you can find a complete overview of tenders issued in Italy, and Infoplus, which specializes in tenders in the health sector in the Salus program.
The share of foreign companies that successfully participate in tenders in Italy is estimated to be relatively small. Italian culture puts a lot of emphasis on personal relationships and this also applies in business, which can also affect the results of some tenders. Foreign companies can compensate for this disadvantage by finding a suitable local partner. Some large companies maintain a register of suppliers, and the tenders issued are intended only for these registered entities, which as a rule can also be applied for by foreign companies.
Payment terms, payment ethics and resolution of commercial disputes
Purchase contracts between Czech and Italian business entities are recommended to be concluded in writing to minimize potential disputes. The customer is obliged to report any product defects or complaints to the seller in a timely manner – usually within eight days after discovering them, in writing. The complaint should also be acknowledged in writing. The claim expires one year after the delivery of the goods.
Part of the contract between the supplier and the customer should be the determination of the relevant law (Czech or Italian), according to which the details of the contract will be governed, or the arbitrators who will resolve the disputes. All disputes in case of non-determination of this condition are resolved according to private international law. Due to the difficulty of enforcing the right through the Italian judiciary, caused by the considerable length of court proceedings in Italy, the resolution of commercial disputes is offered by way of arbitration. However, the risk of arbitration is, of course, the subsequent impossibility of applying remedies (appeal against the decision).
When negotiating business contracts with Italian partners, it is recommended to take good care of the payment terms and especially to ask for guarantees from new partners. Due to the presence of organized crime, the risks of doing business with companies from the southern regions may be higher. This results in, for example, risks in charging and paying VAT in intra-community trade in the EU, etc. Before concluding business contracts, it is possible to request information about a potential business partner from chambers of commerce for a fee.
Verification of the client’s creditworthiness is also a standard service provided by the PaulTrade office in Milan.
Visas, fees, specific conditions for traveling to the territory
A citizen of the Czech Republic may enter and reside in the territory of other EU member states without special restrictions, and only on the basis of a valid travel document or identity card (issued after 1993). It is essential that minor passengers are equipped with their own travel document. If you stay longer than three months, you need to register for your stay at the relevant municipal office according to your place of residence (so-called Ufficio anagrafe). Detailed and updated information can be found on the website of the Italian Police: www.poliziadistato.it. No formalities are required for stays of less than three months.
Driver’s license, driver’s license and green card are required. A vaccination certificate is required for pets, vaccination age between 12-20 days. Current document requirements related to the pandemic should be monitored. Information can be found on the website of the Embassy of the Czech Republic in Rome: https://www.mzv.cz/roma
A toll is charged for using the motorways (for orientation, it can be stated that the Brenner Pass – Rome section costs approx. 60 EUR). Motorways in the southern direction from Salerno, in Calabria, Apulia and Sicily are not tolled. Gasoline and diesel prices are among the highest in Europe. When parking, it is advisable to use central parking lots on the outskirts of large cities, parking in the center is difficult. Rail transport is more expensive and faster than bus transport. Tickets for public transport must be purchased in advance, all stops are marked. Before traveling to Italy, it is usually advisable to find out whether there is a strike going on or about to go on strike (of airport staff, rail and bus transport, fuel sellers, etc.). Information about ongoing strikes can be found on the website of the Italian Ministry of Transport.
Ch. city of Rome – transport from the airport to the center and back:
By bus: There are several bus lines from Fiumicino Airport. The most used are the blue buses of Cotral, Terravision or SIT SHUTTLE. From Ciampino Airport to the city center you can use Atral, Terravison and SIT SHUTTLE buses.
By train: from Rome Fiumicino Airport (also called Aeroporto Leonardo da Vinci), there is usually a Leonardo Express train (14 euros) every 30 minutes.
Employment of citizens from the Czech Republic
The specific nature of the employment of local forces, as well as foreigners in Italy, results mainly from the strong position of trade unions. Italian union headquarters negotiate collective agreements that are valid for the entire sector and the type of work performed, and also cover the working conditions of foreigners in Italy. Collective agreements include agreed limits on working without a break, minimum wages, etc. The average monthly wage is very different in the north of Italy and the south of Italy and can differ by up to 28%.
When sending Czech employees of companies based in the Czech Republic to Italy for temporary work, the Italian Social Security Administration (INPS) is a partner on the Italian side in order to comply with the rules in the field of social security, which acts in accordance with the Community rules. On the Czech side, INPS is a partner institution of the Czech Social Security Administration, which also provides the necessary information regarding the issue of sending Czech employees to work abroad.
If you intend to work or stay in Italy for more than 3 months, you need to obtain a “social security number”, in Italian “codice fiscale”. The number is requested at the local tax office – “Agenzia delle Entrate”.
Health insurance: Depending on where you live, register at the relevant branch of the health insurance company ASL (Azienda Sanitaria Locale) and get a health card.
It is important to determine the tax jurisdiction (tax residence) and determine the scope of taxation in the given state. If a situation arises where two states claim to tax one income (for example, based on residence in one state and work performance in another state), the bilateral double taxation treaty between these states will be used in this case closed. A Czech tax resident, i.e. a taxpayer with unlimited tax liability, is one who has a “residence” in the territory of the Czech Republic or “usually stays” there (at least 183 days in the relevant year). Tax liability applies not only to income from sources in the Czech Republic, but also to income from sources abroad. Since 1984, the bilateral agreement on the avoidance of double taxation No. 17/1985 Coll. has been in force between the Czech Republic and Italy. – download here.
Citizens of the Czech Republic can work in Italy without a work permit from 27 July 2006. Further information can be found on the website of the Ministry of Labor and Social Affairs of the Czech Republic.
Fairs and events
Several hundred fairs are held in Italy every year, attended by approximately 200,000 exhibitors and 20 million visitors. With more than million square meters of indoor exhibition space and million square meters in total, Italy is the fourth largest exhibition country in the world, ahead of only China, the United States and Germany.
The Italian trade fairs bring business worth 60 billion euros, which represents 50% of the exports of the companies that participate.
Lists of exhibitions and fairs in Italy can be found on the following websites:
Comitato FiereIndustria CFI (Committee of Industrial Fairs) (Italian, English)
AssociazioneEsposizioni e FiereItaliane (Association of Italian Exhibitions and Fairs) (Italian, English, Chinese, Russian, Spanish, French, Portuguese, German, Arabic)
Fiera Milano (Milan fair), (Italian, English, Czech)
On the server www.all.biz (international register of companies, goods, services and information for entrepreneurs in several language mutations) you can also find an overview of fairs in Italy, in Czech.
Information on the planned official participation of the Czech Republic in exhibitions and fairs abroad can be found on the website of the Ministry of Industry and Trade of the Czech Republic, and information on fairs with planned Czech participation can be found on the website in the foreign trade – Italy section. The joint participation of Czech companies is also organized by PaulTrade Milan together with the economic section of the Embassy of the Czech Republic in Rome
Among the most important trade fairs in Italy, there is no doubt the Salone Internazionale del Mobile furniture fair, which usually takes place at the beginning of April in Milan. The Smau fair dedicated to technological innovation and IT (information technology). It usually takes place at the end of October. The White fair dedicated to fashion and the latest trends, which takes place in February.
Another important fair city is Parma, in the Emilia-Romagna region, where the Mercanteinfiera, dedicated to antiques, takes place twice a year in March and September/October. Cibus, one of the most important global events in the food industry, takes place in May.
Verona hosts the Cosmo Bike Show, a bicycle trade fair. The reference month is September. Vinitaly, an important event dedicated to the wine sector that takes place at the beginning of April.
Rimini hosts Rimini Wellnes, dedicated to fitness, which takes place every year at the beginning of June. Music Inside Rimini is a fair dedicated to the music sector with professionals from all over the world.
Bologna is also home to a number of extremely important trade fairs, such as Cosmoprof, one of the most important events in the cosmetics industry, which takes place in March. Motor show dedicated to the world of motors.