Finance and Business in Italy

As will now be clear, at the heart of the Italian business culture lie small and medium sized companies, often family concerns dealing with a specific product.

The Italian state are keen to help develop the entrepreneurial culture in Italy via the Ministry of Economic Development assisted by the Institute for the Promotion of Industry (Istituto per la Promozione Industriale) and Invitalia, a government agency for inward investment promotion and enterprise development.

Show Us the Money

If Italian SMEs need capital then there are several options open to them:

• banks
• local Chambers of Commerce
• the EU
• the state – the Ministry of Economic Development and associated agencies as detailed above
• the region
• the province

The subsidies and grants available for SMEs generally fall into the following categories:

• to start a new business
• to support or develop an existing business
• to aid the business in reaching the international market
• to fund R&D
• investment funds for acquiring stakes in another company
• funds for non profits

The finds available depend on many factors, including where the business is situated and what kind of business it is. To help wade through the options in a particular region, the local Chamber of Commerce is an invaluable source of information and advice.

It is worth mentioning that in general Italians are not big risk takers and are suspicious of debt and so the take up on loans is quite low among the smaller level SMEs. In his abstract on small business finance in Italy, Luigi Giuso says “The absence of financial debt on the balance sheet of many firms is mainly because they do not want to borrow, not because lenders do not want to lend.”

The Devil is in the Detail

Company accounts are usually dealt with by a commercialista – an accountant. Scrupulous record keeping is essential as the tax legislation is complex and in a constant state of flux.

There is a need for detail in Italian accounts almost verging on paranoia. It is very common for Italian companies to ask for invoices to be resubmitted if they do not have the correct format of the company name for example, even if it is a minor misspelling. It may seem a trifle ridiculous to the overseas supplier to be asked to resend an emailed invoice as a hard copy by post with every ‘i’ dotted and ‘t’ crossed, but everything must be in exactly the accepted format or it has to be done again, there is almost no flexibility in this. You have to learn to love it!

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