The definitive guide to work as a freelancer in Italy

Freelancing has become an increasingly popular career choice around the world, and Italy is no exception. With its rich cultural heritage, stunning landscapes, and thriving economy, Italy offers a wealth of opportunities for self-employed professionals. However, starting a business in a new country can be daunting, especially if you are not familiar with the legal and tax systems. 

In this article, we will provide a step-by-step guide on how to become a freelancer in Italy.

So, let’s get started! 

What does working independently as a freelancer mean? 

A freelancer is a self-employed person who can offer his services to several clients. It is an increasingly widespread professional figure, for several reasons: 

• the ever-increasing flow of the labour market, where fixed jobs are no longer at all times guaranteed, as was the case twenty or thirty years ago. 
• the growing need for flexibility, so the freelancer can choose - at least up to a certain extent and depending on the sector in which he/she operates - hours, locations and working methods. 

What are the differences between employee and freelance work?

Let’s see briefly what the differences between employee and freelance work are, with the pros and cons of each, so be sure not to underestimate any aspect in the choice of your career.

There are three main points to consider:

• Times, methods and places of work 

An employee has a fixed and predetermined working time and, as a rule, a fixed place of work, that is, an office to go to daily. 

A freelancer, as the name indicates, literally means "free from constraints", instead adjusts his work according to the amount of activity to be performed (which is both a pro and a con!) and can decide to work when and where he/she wants to (obviously respecting the fixed deadlines). The drawback of this is that there is a risk that the freelancer can never completely "pull the plug", since he is solely responsible for his work.

• Profits and/or earnings 

The employee has a fixed monthly salary, which does not vary (if we do not consider any premiums, bonuses or one-off increases), while the freelancer can have different profits every month and if things work well, it can even be much higher than that of an employee. 

In addition, the employee has included, in his salary, guarantees such as severance pay, leave, sickness benefit, unemployment, the thirteenth and any other bonuses, while the freelancer has none of these safeguards Therefore, you must always provide this possibility and equip yourself accordingly with the management of income and expenses, to avoid staying broke.

• Expenses, taxes and contributions 

Daily expenses are usually much lower for a freelance worker, just because he/she can work from home, thus eliminating the transport costs and meals away from home. However, the freelancer must consider an initial investment to start his/her own business. 

When it comes to taxes and contributions, in the case of the employee, they are deducted from the employee’s monthly payroll and paid by the employer directly to the Revenue Agency, and the employee will thus receive a net salary. A freelancer, however, will issue an invoice to his customer, at the end of a professional activity. The net profit of the freelancer, paying taxes and other contributions, is significantly lower than the gross figure written on the invoice: it is good to pay close attention to this fact, so as not to have bad surprises at the time of the payment of taxes.

The first step to not complicate your life as a freelancer? Have the right ally to manage all the tax and accounting aspects of your business. With Xolo you will no longer be alone! Bye bye bureaucracy, welcome serenity!

How to become a freelancer in Italy

In recent years, self-employment has become an increasingly popular option for workers across Europe. While some countries have seen a rise in the number of self-employed workers, others have seen a decline. In this article, we will take a closer look at the self-employment rate in Italy in 2022 and compare it to the rest of Europe.

First, let's define what we mean by self-employment. Self-employment refers to individuals who work for themselves, rather than for an employer. This includes freelancers, consultants, entrepreneurs, and other types of independent workers.

According to recent data from Eurostat, the statistical office of the European Union, the self-employment rate in Italy was 23.4% in 2021. This means that roughly one in four workers in Italy is self-employed. This is higher than the European Union average of 16.9%.

So how does Italy's self-employment rate compare to the rest of Europe? According to Eurostat, the highest self-employment rates in Europe in 2021 were in Greece (31.6%), Romania (31.4%), and Bulgaria (30.1%). The lowest self-employment rates were in Denmark (8.2%), Luxembourg (9.4%), and Belgium (10.6%). Italy's self-employment rate falls somewhere in the middle of this range, above the EU average but below some of the highest self-employment rates in Europe.

There are several factors that may contribute to the self-employment rate in Italy. One possible explanation is the prevalence of small and medium-sized enterprises (SMEs) in Italy's economy. SMEs make up a large portion of Italy's businesses, and many of these are run by self-employed individuals. Additionally, Italy's high unemployment rate may push some workers to pursue self-employment as an alternative to traditional employment.

In conclusion, while the self-employment rate in Italy is higher than the European Union average. Understanding the factors that contribute to self-employment in Italy can help policymakers and businesses to support this segment of the workforce and promote economic growth.

So, if you are considering becoming a freelancer in Italy, there are several key steps you will need to follow. From registering your business to managing your finances, here is a guide on how to become a successful freelancer in this Country.

1. Decide on a Legal Structure

   Once you have determined your skills and services, you need to decide on a legal structure for your business. The two most common options for freelancers in Italy are to register as a Sole Proprietorship (Ditta Individuale) or as a self-employed professional (Libero Professionista).

2. Sole Proprietorship 

   A Sole Proprietorship refers to an individual who operates a business on their own, without the need for a separate legal entity. This is the most straightforward legal structure for freelancers in Italy, and it is suitable for those who do not need to employ staff or have complex financial arrangements. The sole proprietorship is a particular type of enterprise (or natural person, not legal) that has - as the name suggests - a single owner, that is, the entrepreneur, the one who is the only promoter and the only responsible for the professional activity. This activity, unlike the self-employed, is not of an intellectual type, but is instead inherent in the production or exchange of goods and services: this means that it is an artisanal activity (from the bricklayer to the hairdresser, from the beautician to the electrician, from the baker to the plumber) or a commercial activity (from the wholesaler to the retailer, from the owner of an e-commerce to the door-to-door seller to the street vendor).

3. Self-Employed Professional 

   A self-employed professional is an individual who operates a business in a regulated profession, such as accounting, law, or medicine. This legal structure requires a higher degree of specialization, and it is subject to specific regulations and requirements.

4. Register Your Business 

   After deciding on your legal structure, you need to register your business with the appropriate authorities. To do this, you will need to obtain a VAT number (Partita IVA) from the Italian Revenue Agency (Agenzia delle Entrate). You will also need to register with the Social Security Administration (INPS) and the Chamber of Commerce (Camera di Commercio).

5. Register the VAT Number 

   The VAT number is a unique identification number that is used for tax purposes. It is required for all businesses that operate in Italy, and it is obtained from the Italian Revenue Agency. To obtain a VAT number, you will need to provide proof of identity, a copy of your business plan, and other supporting documents. The application needed to open the VAT number can be sent directly to the Revenue Agency, but since important choices must be made when opening the VAT number, such as that of relating one’s business activity to the ATECO code (which identifies the type of activity carried out), it is advisable to be assisted by a qualified professional regarding the bureaucratic process to be completed.

6. National Social Security Institute (INPS)

   The National Social Security Administration (INPS) is responsible for managing social security contributions in Italy. As a self-employed worker, you will be required to pay social security contributions, which will entitle you to certain benefits, such as healthcare, pensions, and maternity leave. You will need to register with the INPS and pay your contributions on a regular basis.

7. Chamber of Commerce 

   The Chamber of Commerce (Camera di Commercio) is responsible for registering businesses and providing support services to entrepreneurs. Only as a sole proprietorship, you will need to register with the Chamber of Commerce and pay an annual fee. This will give you access to a range of services, such as business advice, networking opportunities, and training programs.

We, at Xolo, can provide the freelancer all that is needed for the opening of the individual company, so you can start your new professional adventure right away!

Advantages and disadvantages of a Sole Proprietorship 

Having your own company has both advantages and disadvantages. Let’s analyze them in detail to understand when and to whom it is convenient to open the sole proprietorship.

The advantages of the individual company

• Being the owner of a sole proprietorship allows you to have total autonomy in the decision-making and management of the business, since you are the sole owner and entrepreneur
• It is not necessary to allocate a minimum capital to start the professional activity
• Operating costs tend to be very low
• One can access the simplified accounting system, which allows considerable savings in time and money, since all the procedures can be carried out more easily and quickly.
• The settlement process can be carried out economically and immediately, simply by closing the VAT number and giving notice of the cessation of the activity to the INPS, to the INAIL and to the Chamber of Commerce of its Municipality of reference 
• For small businesses, such as family businesses, it is undoubtedly the most appropriate legal form 

The cons of the Sole Proprietorship

• The main disadvantage is that the principle of unlimited liability applies, namely that the owner of a sole proprietorship is completely exposed to entrepreneurial risk, since, in this type of legal form, there is no division between the entrepreneur personal assets and those of the enterprise: this means that, in the case of debts of the individual firm, creditors can rely directly on the owner's personal assets, since the liability is unlimited
• From the fiscal point of view, everything that the sole proprietorship obtains is added directly to the owner’s property, thus increasing the taxable assets and amounts
• It is more difficult, compared to a Srl. company (limited liability company), to obtain finances, precisely for the reason analyzed in the previous point
• The fact that the entrepreneur is the sole owner has also a downside: the fate of the company is all on his shoulders, he has no partners, and everything depends only on his/her own resources

If you are planning to start your own business and you still have some doubts, do not hesitate and ask for personalized advice! Contact our experts who can give you all the answers quickly and accurately and all necessary indications to proceed smoothly, avoiding errors and delays in the different steps. We, at XOLO believe in the power of independent work and we strive daily to make freelancing truly accessible to everybody. 

Choosing the right tax regime

Freelancers in Italy are subject to several tax regimes, and choosing the right one can be a complicated process. Here are the main tax regimes available to freelancers in Italy:

1. Flat-rate tax regime

   This is a simplified tax regime that is available to freelancers with a turnover of up to €85,000 per year. Under this regime, freelancers pay a fixed amount of taxes based on their profession, regardless of their actual income. This can be a good option for freelancers who have a low turnover or who are just starting out.

2. Simplified tax regime

   This is another simplified tax regime that is available to freelancers with a turnover of up to €30,000 per year. Under this regime, freelancers pay a fixed amount of taxes based on their profession, but they are also entitled to a range of tax deductions and exemptions. This can be a good option for freelancers who have a low turnover but who also have significant business expenses.
   
   

3. Ordinary tax regime

   This is the standard tax regime for freelancers in Italy. Under this regime, freelancers pay taxes based on their actual income and can deduct business expenses from their taxable income. This can be a good option for freelancers who have a higher turnover or who have significant business expenses that they want to deduct from their taxable income.

Choosing the right tax regime for your business will depend on your turnover, your expenses, and your personal circumstances. It is important to seek the advice of a tax professional who can help you make the right choice for your business.

Advantages of the flat rate scheme 

From an economic point of view, becoming a freelancer is a path that does not involve excessive costs. 

These Freelancers, as we have seen, can in fact benefit from the flat-rate scheme, a type of VAT scheme that guarantees tax concessions for those who start a new business and have an income of up to 85,000 euros per year, with a 5% tax for the first 5 years, which rises to 15% from the sixth year. Freelancers who join the flat-rate scheme also have fewer accounting obligations, such as VAT exemption. Thus, even being assisted by an accountant for the management of the activity is on the whole less expensive than other self-employed categories.

Now, let's talk about the advantages of the flat-rate scheme. 

One of the biggest benefits of the flat-rate scheme is that it simplifies the tax process, making it easier for freelancer or self-employed individuals to be and stay compliant with the law. 

1. Flat rate tax calculation for freelancers

   One of the major advantages of the flat-rate scheme for freelancers is the ease of calculating and paying taxes. There is no need to keep detailed records of expenses or calculate taxes based on them, as freelancers simply pay a fixed percentage of their income. That makes it much easier for freelancers to understand their tax obligations and file their taxes without the help of a professional. 

2. Flat rate tax deduction for freelancers 

   Tax deductions take place independently of the expenses incurred, but according to a fixed lump sum established by a coefficient of profitability associated with the ATECO code (The ATECO code is an alphanumeric combination that identifies an Economic activity. The letters identify the economic macro-sector while the numbers represent, with varying degrees the subcategories of the sectors themselves), that is according to the professional category they belong to. 

3. Flat rate tax rate for freelancers 

   Another important advantage freelancers benefit from is the lower tax rate, which can result in significant savings for freelancers. Instead of paying taxes calculated on their earnings, they pay a fixed percentage of their income therefore they may end up paying less taxes. The flat-rate scheme in Italy, guarantees a 15% tax rate, reduced to 5% for the first five years for those who start a new business. 

4. Flat rate simplified record-keeping for freelancers

   Additionally, the advantage for the freelancer is the simplified Record-Keeping: The flat-rate tax scheme eliminates the need for detailed records of all sales transactions, making it easier for freelancers to manage their VAT compliance.

Do you want to be a freelancer then? Join Xolo, your go-to source for dedicated tax and accounting assistance whenever you need it. Our experts will follow you step by step in starting up and running your business. Get on board and discover all the benefits! Contact us for more information!

Flat-rate scheme for start-ups

Reduced flat rate scheme for start-ups 

If you have a start-up, the flat-rate scheme can become even cheaper, with a rate lowered from 15% to 5% of taxable income.

This occurs in the first five years of the start-up, provided one has some specific prerequisites and keeps them for the first five years.

Let’s see together which are the requirements needed to access to the flat-rate scheme for start-ups:

• it has to be a new activity, it cannot be the continuation of the same or similar activity, previously carried out - with the exception of internship activities set out for example, for lawyers and doctors;
• have not carried out professional, artistic or business activities in the three years preceding the start-up opening, even in partnership or family business;
• In the event that one takes over someone else's activity, the previous entity must not have exceeded 85,000€ of the annual turnover.

Earnings and rates of a freelancer 

Freelancers earn gross income and must therefore cater for contributions too in order to compensate the gross. Do not be afraid to make high demands and at the same time do not distance yourself too much - neither upwards nor downwards - from the market prices proposed by your competitors.

There are also formulas that can be applied for the calculation of an average hourly rate and that take into account the various factors that we have listed as follows: 

Minimum hourly rate = (potential salary + 44% - Freedom Tax) / (50x20) 

This formula translates as follows:

• The potential salary represents the net salary that the freelancer would have if he was an employee
• 44%: this value represents the average tax rate applied in Italy; this figure must be added to the potential salary because then the freelancer will have to pay it to the Revenue Agency 
• Freedom Tax: this is a value that is arbitrarily attributed by each freelancer on an annual basis and that represents the value that your "freedom" of being freelance has. It can be around 20% of annual earnings
• 50x20: this value indicates the hours that in a year can be invoiced, considering 50 working weeks and 20 average working hours per week.

To be able to easily support the expenses provided by the VAT management, such as the payment of contributions and taxes, and get the right income, the freelancer will have to propose to his customers rates that take into account all this. It will therefore be necessary to propose prices on the basis of the time the freelancer takes to carry out a specific activity, but also considering his own added value, experience, skills and networking, so not just charging on an hourly basis.

How to find work as a freelancer in Italy

Preliminary steps to become a freelancer 

We’ve seen that, on a practical level, becoming a freelancer is a pretty simple procedure. However, to start a career with a minimum of security, you need to move on time and with foresight, without making rash choices, since there will no longer be the certainty of a fixed monthly income and the matter of expenses related to taxes and contributions, are not to be underestimated. 

There are several activities to be carried out, both before and during the career as a freelancer, in order to be always competitive and be the best choice for their customers.

For this reason, in the period before the date in which you plan to start your own business, it is good to put in place some useful measures, including for example making an accurate calculation of the monthly expenses that one should incur (also to understand what fees to ask clients to really be able to make a truly net profit) and doing market research in order to identify which are the competitors and to evaluate the target audience to be addressed and, finally, strengthen your personal branding. 

Finding work in Italy can be challenging, especially if you're not familiar with the local market. However, with the right approach and a little bit of effort, you can increase your chances of finding work and building a successful freelance career and once you’ve taken care of the legal requirements, it’s time to start looking for work. There are a few different ways to find freelance jobs in Italy and  we'll provide you with some tips on how to find work as a freelancer in Italy.

1. Update your professional portfolio

   As a freelancer, one of the things to do is to build one’s professional recognition through tools such as a blog, a website, a social page, a newsletter, your portfolio. Everything must always be taken care of and updated, because it is the first showcase through which you can propose yourself on the market and find new customers. 

2. Build your network

   Networking is crucial for finding work as a freelancer in Italy. Attend as many events in the sector as possible: join local associations and groups, fairs, conferences, aperitifs, seminars to be able to meet and exchange ideas with people with whom, one day, you might find yourself collaborating. This will help you build a network of contacts who may be able to refer you to potential clients or projects. A freelancer can also reach out to local businesses and offer one’s services directly. There are several online communities where you can connect with other freelancers and find out about job opportunities as well as. The most popular option is to use online job boards such as Upwork, Freelancer, and Fiverr. These sites allow you to search for jobs in your field and apply directly to employers. For the freelancer the relational aspect is very important, because from that the sources of work and contacts with potential customers and collaborators can be found. It is therefore good to attend. 

3. Create a professional online presence

   Having a professional online presence is important for any freelancer. Create a website or portfolio showcasing your work and be active on social media to promote your skills and expertise. Make sure your online presence accurately represents your skills and experience, and that it's easy for potential clients to find you. 

4. Invest in your education and training 

   Constant training: the world of work, you know, is always evolving and it is therefore essential to be always updated on all the latest trends and innovations in your industry. For this reason, you should never stop learning through reading books and articles, attending seminars, workshops, meetings and industry congresses

5. Use online marketplaces 

   There are several online marketplaces that connect freelancers with clients, such as Upwork, Freelancer, and Fiverr. These platforms can be a great way to find work, but competition can be fierce, and rates may be lower than what you're used to. Be sure to set a fair rate for your services and carefully review the terms and conditions of each platform before signing up.

6. Contact local businesses 

   Reach out to local businesses in your area and offer your services. You may need to do some research to find businesses that could benefit from your skills, but this approach can be very effective, especially if you have a niche skillset. Consider offering a free consultation or trial period to entice potential clients.

7. Consider government programs 

   In Italy, there are several government programs that offer support to freelancers, including training, networking events, and financial assistance. Look into these programs to see if you're eligible and take advantage of any opportunities they offer.

8. Be persistent

   Finding work as a freelancer can be challenging, but it's important to stay persistent. Don't be afraid to follow up with potential clients and keep applying for new projects even if you don't hear back right away. The more effort you put in, the more likely you are to find success.

In conclusion, finding work as a freelancer in Italy requires a combination of networking, marketing, and persistence. By building your network, creating a professional online presence, using online marketplaces, contacting local businesses, and taking advantage of government programs, you can increase your chances of finding work and building a successful freelance career.

Working as a freelancer in Italy is an amazing opportunity, but it’s important to make the most of your time there. Take advantage of the country’s rich culture and explore the cities, towns, and countryside. Make sure to take some time off to relax and enjoy the delicious food and wine. 

Are you an expat freelancer looking to start a sole-business in Italy? XOLO can help! 

Freelancing in Italy is a great way to make money while living in one of the most beautiful countries in the world.  If you're looking to work as a freelancer in Italy, there are many benefits to going the freelance route, such as flexible hours, the ability to work from anywhere, and being your own boss.

However, navigating the complex Italian tax system can be daunting. That's where Xolo comes in!

Xolo provides an all-in-one platform for freelancers to manage their business finances, including invoicing, expenses, and taxes. With Xolo, you can focus on your work and leave the administrative tasks to them. So why wait? Take control of your freelance career in Italy today and sign up for Xolo! Our platform provides all the tools and resources you need to get started, from registering your business to managing your finances. We have a team of tax experts for freelancers, so we can offer you personalized service, suitable for your business and every stage of your journey. You will have a dedicated consultant, always available to support you, by phone or emailAt Xolo we believe in the power of independent work and we strive daily to make freelancing a truly accessible experience for everyone. If you also believe that the job of the future is freelance and that bureaucracy should not be an obstacle, then we have a lot in common.

More than 120,000 freelancers have already trusted Xolo. Join our community of freelancers! 🚀