Expand your organization into Italy with or without an Italian entity
The Mediterranean country of Italy is famous for its rich history, culture, and high standards of living. Italy’s economy is also impressive, ranked eighth in the world in terms of nominal GDP, and composed of a diverse range of successful industries from agriculture to manufacturing, luxury goods, financial services, and many others. For these reasons and more, Italy is a popular country for foreign businesses to expand.
If your company is planning an expansion into Italy, then you should be prepared for a complex process. While the rewards are worth it, Italy’s unique business and employment regulations, cultural customs, and language can all result in delays to any expansion efforts.
At Horizons, we help organizations of all kinds to expand abroad, including into Italy. Our professional employer organization (PEO), employer of record, and payroll services can provide your organization with everything you need to begin your Italian expansion in a matter of just days, not the weeks or months it could otherwise take, even if you don’t have an established entity in the country.
And as the only Italy PEO & Employer of Record with an in-house recruitment team, we can also take care of the sourcing, hiring, and onboarding of your Italian workforce, along with any ongoing HR and compliance admin. Our bespoke services can save you thousands in expansion costs and provide you with a faster route into Italy.
How can Horizons help you expand into Italy?
Horizons enables your business to expand its operations into Italy, even if you don’t have an Italian subsidiary
Hiring in Italy: Employment law overview
📝 Employment contracts in Italy
In Italy, employers are legally required to produce formal employment contracts for all workers. These contracts should always include any relevant details of the role, such as salary/wage, working hours, benefits, and entitlements. They should also be written in Italian and use the currency of the Euro.
⏰ Working hours in Italy
A normal working week in Italy is 40 hours long, made up of five eight-hour days, usually Monday to Friday.
📅 Public holidays in Italy
New Year’s Day
Liberation Day, Feast of St. Mark
Feast of St. John the Baptist
Saint Peter and Saint Paul
Feast of St. Rosalia
Feast of St. Gennaro
Feast of St. Petronius
All Saints’ Day
Feast of St. Giusto
Feast of St. Nicholas
Feast of St. Ambrose
Immaculate Conception Day
St. Stephen’s Day
🏖 Vacation leave in Italy
Employees in Italy are entitled to a minimum of 20 days of paid vacation leave from work. This is based on a five-day working week.
💸 Bonuses in Italy
An annual ‘13th-month’ bonus payment is regularly given to employees in Italy, although it is not legally required. The payment is usually given around Christmas.
😷 Sick leave in Italy
Employees in Italy are entitled to at least three days of paid sick leave if they present a medical note. Employees may be able to take up to two years for serious illnesses or family issues.
👶 Parental leave in Italy
Female employees in Italy can take two months before and three months after giving birth. During this time, they receive 80% of normal salary. Male employees can take one day of paternity leave, however, they can also take up to two days of the mother’s leave if mutually agreed upon.
💰 Terminations and severance in Italy
Employers in Italy can only terminate employees in specific circumstances, such as breaches of the employment contract or for economic reasons, and there are strict procedures to follow in most cases, so it is important to fully understand the regulations relevant to your specific situation.
Employees are also entitled to a payment at the end of their service, called the TFR, for which an employer must withhold 7% of pay.
🏦 Taxation in Italy
Both employees and employers in Italy generally need to contribute toward social security funds. For employees, the contribution is roughly 10% of salary, and for employers, it is roughly 35%.
Income tax is progressively scaled in Italy, with rates ranging from 23% to 43% depending on income.
The corporate tax rate in Italy (called IRES) is 24%, but businesses are also usually required to pay a regional production tax (IRAP) of 3.9%.
🏥 Health coverage in Italy
Italy has public healthcare, so businesses do not need, nor are expected to, offer private medical insurance. However, some employers do choose to offer private medical benefits.
💳 Italy compensations & benefits
Compensation laws in Italy
There is no fixed minimum wage in Italy. Instead, collective bargaining agreements are usually in place to dictate wages for specific industries/roles.
Benefit management in Italy
Setting up a system of employee benefits for your employees in Italy can be difficult. The complex regulations and organization can require a lot of time, effort, and investment on the part of employers.
Outsourcing your benefit management process ensures that you fully understand and adhere to the rules, ensuring your compliance and speeding up the process significantly. At Horizons, our Italy Employer of Record & PEO and employment experts will help you to find and arrange your benefits, advise on your strategy, and ensure compliance with the law.