Why becoming a freelancer in Italy in 2023 and best destinations

Becoming a freelancer in Italy can be a great option for those looking to work independently and enjoy the flexibility that comes with it. In this article, we'll explore why Italy is the best destination for freelancers and what makes it an attractive place to work and live and we’ll highlight some of the best destinations within the country to pursue this career path. 

Italy has a supportive business environment. The country offers a range of incentives, subsidies, and tax breaks to freelancers, making it easier for them to choose Italy as a destination to get their new business off the ground. Moreover, the Italian government has made significant investments in research and development, which can provide access to cutting-edge technology and resources. These initiatives have helped create a favourable environment for any freelancer to thrive in Italy.

Why is Italy a great destination for Freelancers? 

There are many other reasons why Italy is an excellent destination for freelancers in 2023. Italy is a beautiful country with a rich history and culture that attracts millions of tourists every year and offers an ideal environment for freelancers to thrive. This means that there are many opportunities for freelancers in industries such as tourism, hospitality, and travel. In this article, we'll explore why Italy is the best destination for freelancers and what makes it an attractive place to work and live.

Beautiful scenery and rich culture 

Italy is known for its beautiful landscapes, stunning architecture, and rich cultural heritage. From the picturesque towns in Tuscany to the historic ruins of Rome, there is always something new and exciting to explore in Italy. For freelancers who value inspiration and creativity, Italy offers a wealth of opportunities to engage with the local culture and immerse themselves in the beauty of their surroundings.

Low cost of living 

Compared to other European countries in Europe, Italy has a relatively low cost of living, especially outside of major cities like Rome and Milan. This means that freelancers can enjoy a comfortable lifestyle without having to spend a fortune on rent, groceries, or other necessities. Additionally, the cost of healthcare in Italy is relatively low, which can be a significant benefit for freelancers who may not have access to employer-provided health insurance. 

An economy that offers opportunities for freelancers 

Italy has a thriving economy with many opportunities for freelancers to work in various sectors. The country is known for its expertise in industries such as fashion, food, and tourism, and there are many opportunities for freelancers in these sectors. Additionally, Italy is home to many startups and small businesses, which can provide freelancers with a wealth of opportunities to collaborate and grow their network. Many Italian companies are beginning to rely more heavily on freelancers to complete their projects. This is particularly true in the tech industry, where there is a high demand for skilled workers who can work remotely.

Entrepreneurial spirit 

Italy has a strong entrepreneurial spirit, with many individuals starting their own businesses and pursuing their passions. This entrepreneurial culture creates an ideal environment for freelancers, who can benefit from the support and guidance of a community of like-minded individuals. Additionally, the Italian government has introduced several measures in recent years to support entrepreneurship and make it easier for freelancers to start and grow their businesses.

High-quality of life 

Italy is known for its high quality of life, with excellent food, wine, and cultural attractions. Additionally, the country has a laid-back, relaxed pace of life that can be an attractive feature for freelancers who value work-life balance. The Italian lifestyle is all about enjoying the simple pleasures of life, and freelancers who choose to live and work in Italy can benefit from this philosophy.

Central location 

Italy is located in the heart of Europe, making it an ideal location for freelancers who need to travel frequently for work. The country has excellent transport links to other European countries, including high-speed trains and well-connected airports. This central location can be an attractive feature for freelancers who need to be flexible and mobile in their work.

Finally, the Italian government has implemented several measures in recent years to encourage entrepreneurship and make it easier for freelancers to start and grow their businesses. For example, in 2019, the Italian government introduced a new tax regime for freelancers called the "Flat Tax," which offers a flat tax rate of 15% and of 5% during the first 5 years for those earning less than €85,000 per year, but we will talk about it more in detail below.

Advantages for freelancers opening a business in Italy 

Freelancing has become an increasingly popular way of working in recent years, and it has also opened up new opportunities for entrepreneurs. Many freelancers are now considering the possibility of opening a business in Italy, and for good reason. There are several benefits to opening a business as a freelancer in Italy, including access to funding, a supportive entrepreneurial community, and favorable tax laws.

• Access to funding - One of the key reasons why freelancers should consider opening a business in Italy is access to funding. Italy has several grants and funding opportunities for freelancers, also gender based, women are even more advantaged than men. Access to funding is often what freelancers need to get their business off the ground.
• Co-working - In addition to funding, Italy also has a supportive entrepreneurial community. There are several co-working spaces, throughout the country, where freelancers can work easily and meet other freelancers or entrepreneurs. These communities provide a supportive environment where freelancers can easily work even travelling around the country having a ready-to-go office at hand. More details about co-working in Italian cities can be found later, in this article.
• Favourable tax laws - Another advantage of opening a business as a freelance in Italy is the favourable tax laws. The Italian government has implemented several tax incentives to encourage freelancers to set up their new businesses in the country. We will talk about this topic later in the next paragraph.

In conclusion, there are numerous benefits to becoming a freelancer in Italy. With the right idea, a solid plan, and a commitment to hard work, freelancers can leverage these benefits to create a successful business in Italy.

Flat-tax scheme and its advantages 

Have you had the brilliant idea of opening a new activity as a freelancer, but you are worried about the running costs and related expenses being too high? Are you afraid of being suffocated by heavy taxes at the very beginning of your new freelance journey? Do economic worries stop you from taking the first step?

Freelancing has become increasingly popular in recent years, especially in countries such as Italy where there is a high demand for skilled professionals. One of the benefits of freelancing in Italy is the reduced flat rate scheme, which provides freelancers with a more affordable tax rate. However, not all freelancers are eligible for this scheme. In this article, we will discuss the requirements needed by freelancers to access the reduced flat rate scheme in Italy. 

Having a freelance activity in Italy, under the Flat Tax Regime, can be an attractive option for who's looking to benefit from a simplified tax system. 

Flat rate scheme in Italy 

To clarify, let’s start from the beginning: what is the flat-rate scheme? The flat-rate scheme is a preferential tax scheme, introduced in Italy by the Stability Act of 2016 and meant for freelance VAT registered workers whose gross annual turnover remains within the fixed limit of € 85,000, as established by the Budget Act 2023 No. 197, published on December 29th, 2022 in the Official Journal (Gazzetta Ufficiale). 

There are several requirements to access it and several advantages, the main one being that the tax rate is only 15% of the taxable income. To understand how unique is the advantage of this type of tax system, just compare with the IRPEF taxation of the ordinary system, which varies in brackets from a minimum of 23% to a maximum of 43%, whereas in the flat-rate scheme there is only the fixed and all-encompassing rate, fixed at 15%!

There are benefits, but the premise is that you must know the necessary requirements well, to be able to take advantage of them. When you are a freelancer or you are about to embark on this adventure there are many things to think about, and often you feel quite confused or discouraged. Rely on XOLO, our experts will give you all the information and advice you need to not miss any benefit and use your resources to the fullest and in all serenity!

Requirements needed to access the flat-rate scheme for freelancers 

The following are the requirements needed in order to access the flat rate scheme

1. Natural person: Be a natural person carrying on an activity of business, art or profession, that is to say, a self-employed person or a sole trader or, at most, a family business: all self-employed professionals can access it without age restrictions.

2. Eligibility: If you are a new freelancer, you may be eligible for the reduced flat rate scheme for the first 5 years of your activity. This is provided that you have not worked as a self-employed professional in the same sector in the previous 2 years.

3. Italian residency: it is necessary to be resident in Italy, or in a country that is part of the European Union or in another State that guarantees an adequate exchange of information, provided that, in any case, at least 75% of the income is produced in Italy

4. Annual income: To access the reduced flat rate scheme, your annual income must not exceed €85,000. If your income exceeds this amount, you will not be eligible for the scheme.

5. Employment or pension income: Those who are classified as employees or as pensioners can also join the flat-rate scheme, provided that their annual income does not exceed the threshold of € 30,000."This is to ensure that the scheme is only available to those who need it most

6. Expenditure: Do not exceed the limit of € 20,000 per year for expenditure on employees or collaborators - if you open the VAT number ex novo, the calculation of these expenses will be indicative.

Advantages of the flat rate scheme for freelancers 

In addition to the huge tax relief (15% tax rate in the normal flat-rate scheme and 5% for the reduced flat rate scheme for start-ups), this type of tax regime has other important benefits, which cannot be found in the ordinary scheme. These include, for example:

• VAT exemption H3 (value added tax): that is, the possibility of not applying VAT to the list prices, thus managing to keep more competitive prices than those who, in the ordinary system, are obliged to apply VAT

• Withholding tax exemption H3: on fees, IRAP, IRPEF, municipal and regional additional fees and the submission of the ISA declaration

• Simplified accounting H3: there is no obligation to keep VAT books and in general, all accounting operations are simplified as well as a reduction of accounting records

In conclusion, the reduced flat rate scheme in Italy provides a more affordable tax rate for self-employed professionals. If you meet the necessary requirements, you may be able to benefit from the reduced flat rate scheme and save money on your taxes.

Flat-rate scheme: other factors to take into account 

What happens if the annual turnover exceeds the imposed limit? 

 Well, as per the Budget Law 2023 n.197: if one exceeds 85,000 €, but not over 100,000 euros, the exit from the scheme is not immediate, but it will start from the following year. If instead 100,000€ are exceeded, one will have to apply value added tax (VAT) from any subsequent transactions. However, if in the following years the turnover falls below the limit of € 85,000 again, one can re-enter the flat-rate scheme.

What  happens at the end of the five years from the date the VAT number is opened?

One simply joins the "traditional" flat-rate scheme, which provides for a 15% tax rate on the taxable income, and not the ultra-subsidized 5%, anymore.

There is one last consideration to keep in mind: freelancers benefiting from the advantages of the preferential or reduced flat-rate tax system are, however, excluded from tax deductions, normally provided for in the Ordinary scheme, such as the deduction of medical and health costs, deductions for minors or other family members, deductions from accommodation costs of the premises where the activity takes place and other such advantages. For this reason, it is therefore necessary to carefully assess on a case-by-case basis what is the most convenient tax framework for each activity you intend to undertake.

Get informed on Italian Legal Terms for Freelancers 

As an expat freelancer in Italy, it's important to be familiar with some key legal terms. Here are a few to get you started:

• Partita IVA: This is your VAT number, which you'll need to operate legally as a freelancer in Italy.

• Codice Fiscale: This is your tax code, which is used to identify you for tax purposes in Italy. You'll need to have a codice fiscale to open a VAT account.

• Ditta Individuale: This is another term for a sole proprietorship, which is the most common legal form for freelancers in Italy.

• Registro delle Imprese: This is the business register, which is maintained by the Italian Chamber of Commerce. You'll need to register your business with the Registro Imprese to operate legally in Italy.

Steps to become a freelancer in Italy 

If you're an expat looking to become a freelancer in Italy, there are a few key steps you'll need to take to ensure you're operating legally and effectively. In this article, we'll cover the main requirements for becoming a freelancer in Italy, including choosing a legal form, opening a VAT account, and other related topics.

Choose the legal forms for freelancers in Italy

Before you can start operating as a freelancer in Italy, you'll need to choose a legal form. There are several options available, including sole proprietorship, SRL, SNC, and more. Here's a brief overview of each option:

• Sole Proprietorship (Impresa Individuale) : This is the simplest and most common legal form for freelancers in Italy. As a sole proprietor, you'll be responsible for all aspects of your business, and you'll be liable for any debts or liabilities that arise.
• SRL (Società a Responsabilità Limitata): This is a limited liability company, which means that your personal assets are protected from any debts or liabilities of the company. This is a good option if you plan on hiring employees or if you want to separate your personal assets from your business assets.
• SNC (Società in Nome Collettivo): This is a partnership where all partners have unlimited liability for the company's debts and liabilities. This option is less common for freelancers, but it can be a good choice if you plan on working with other freelancers or partners.

Opening a VAT account in Italy 

Once you've chosen your legal form, you'll need to open a VAT account in Italy. This is a tax identification number that you'll use to pay taxes on your business income. You'll need to register for VAT with the Italian tax authorities (Agenzia delle Entrate) and you'll need to provide your business details, including your legal form and your expected annual revenue.

Other considerations for freelancers in Italy 

Becoming a freelancer in Italy can be a rewarding and lucrative career choice, but it's important to take the necessary steps to ensure you're operating legally and effectively. By choosing the right legal form, opening a VAT account, and staying up-to-date on your accounting and tax obligations, you can set yourself up for success.In addition to choosing your legal form and opening a VAT account, there are a few other things you'll need to consider as a freelancer in Italy. Here are a few key considerations:

• Business Insurance: You'll need to have liability insurance as a freelancer in Italy, which will protect you in case of any legal claims or damages.

• Work Permits and Visas: If you're an expat, you'll need to have a valid work permit or visa to legally work as a freelancer in Italy.

• Accounting and Taxes: You'll need to keep accurate records of your business income and expenses and you'll need to file taxes on your business income each year.

Best destinations for freelancers in Italy 

If you're considering becoming a freelancer in Italy in 2023, there are several destinations within the country that are particularly well-suited to this career path. Here are some of the best options:

Milan for freelancers

Milan, besides being the most populous city in Italy, is an international city and it is the financial and fashion capital of Italy and a major hub for business and entrepreneurship. Freelancers in fields like finance, marketing, and design may find many opportunities in Milan, as the city is home to many multinational companies and startups. It offers a lively nightlife and an interesting artistic panorama. From Milan you can enjoy convenient connections by train, plane, and a well-organised city transport system. It is in third place in the report icity Rank 2020, the annual ranking of the most digital cities in Italy and is considered by many digital professionals one of the best Italian cities to live in: work in Milan, then, will give you the opportunity to make contacts with other freelancers from all over the world.

• Connection speed: Milano is one of the most connected cities in Italy, with an average download speed of 100 Mbps and an average upload speed of 35 Mbps. Many areas of the city have access to fiber-optic broadband, which can offer even faster speeds.

• Coworking spaces:  Talent Garden, EcoWorking, Campus Coworking, Freelancer Island

• Cost of living:  index + rent: 65.09 € (compared to the Italian average of 49.13 €)

• Average cost for renting a studio apartment: 1109,25 € in the city centre, 732,50 € outside the centre (the Italian average is respectively 596,41 € and 451,97 €) 

• Monthly cost for public transport: 39,00 € (compared to the Italian average of 35,00 €)

Bologna for freelancers

Bologna is in second place in the list of digital capitals of Italy in the icity Rank 2020 report and is among the top 5 cities in Italy in terms of coworking spaces. You will find a stimulating and artistic environment: the University of Bologna, the oldest in Italy and the western world, attracts students from all over the peninsula and beyond, which makes the atmosphere lively, progressive and in step with the times.

• Connection speed: Bologna has an average download speed of around 65 Mbps and an average upload speed of around 20 Mbps. The city also has several providers offering fiber-optic broadband, which can offer even faster speeds. 
• Coworking spaces:The Student Hotel, Granata coworking, Nuntiabo, Luogo Comune
• Cost of living: index + rent: 53.36 € (compared to the Italian average of 49.13 €) 
• Average cost for renting a studio apartment: 703,70 € in the city centre, 558,89 € outside the centre (the Italian average is respectively 596,41 € and 451,97 €) 
• Monthly cost for public transport: 36,00 € (compared to the Italian average of 35,00 €)

Genoa for freelancers

In Genoa you will find the largest and most important port of Italy, a dream kitchen, and an incredible sea. It is appreciated by digital nomads for its low prices and the beauty of the place and, even if it is less lively than Milan or Turin, it is a perfect destination to alternate work and relaxation in some of the most suggestive beaches of Italy. According to the report icity Rank 2020, Genoa has an "advanced" level of digitization, and there are coworking spaces.

• Connection speed: the average download speed is around 60 Mbps, while the average upload speed is around 18 Mbps. Like other cities in Italy, some areas may have slower speeds due to infrastructure limitations.
• Coworking spaces: Talent Garden, COWO, CWG, Social Hub
• Cost of living: index + rent: 50.77 € (compared to the Italian average of 49.13 €) 
• Average cost for renting a studio: 566,88 € in the city centre, 404,38 € outside the centre (the Italian average is respectively 596,41 € and 451,97 €) 
• Monthly cost for public transport: 46,00 € (compared to the Italian average of 35,00 €)

Florence for freelancers

Florence is not only one of the most famous cities abroad for its artistic and architectural beauty and its history, but it has also been elected the capital of the digital transformation 2020 by the icity Rank 2020 report. This means that if you choose it as the location of your freelance work, you can easily find cutting-edge technology and connection. The Tuscany region also offers a voucher for Italian VAT holders, which covers the rental of a coworking station.

• The average download speed is around 60 Mbps, while the average upload speed is around 20 Mbps. However, as with Rome, some areas of the city may have slower speeds due to older infrastructure.
• Coworking spaces in Florence: Smart-hub, 91C, Nana Bianca 
• Cost of living index + rent: 54.47 € (compared to the Italian average of 49.13 €) 
• Average cost for renting a studio apartment: 773,48 € in the city centre, 605,42 € outside the centre (the Italian average is respectively 596,41 € and 451,97 €) 
• Monthly cost for public transport: 35,00 € (compared to the Italian average of 35,00 €)

Rome for freelancers

Rome is the capital city, and it is the heart of Italian political life. It is one of the most important points of trade and services in the country. In the Eternal City you can enjoy a thousand-year history, admire breath-taking views, and enjoy delicious food. Working in Rome also means being able to rely on modern and technological workspaces: the city, in fact, is in fourth place in the ranking of the most digital capitals of Italy according to the icity Rank 2020 report.

• Connection speed: The average download speed in Rome is around 70 Mbps, while the average upload speed is around 22 Mbps. However, some areas of the city may have slower speeds due to older infrastructure. 
• Coworking spaces: Talent Garden, Ala/34, BinarioUno, Cowall
• Cost of living: index + rent: 58.14 € (compared to the Italian average of 49.13 €)  
• Average cost for renting a studio apartment: 912,76 € in the city centre, 624,12 € outside the centre (the Italian average is respectively 596,41 € and 451,97 €)  
• Monthly cost for public transport: 35,00 € (compared to the Italian average of 35,00 €)

Naples for freelancers

Naples, known worldwide as the home of pizza, is an economic city, combining wonderful beaches, some of the most spectacular sites of historical importance in the country and an unmissable cuisine. From a technological point of view, it only got a "decent" score in the icity Rank 2020 report, but it presents a good panorama of coworking spaces.

• Connection speed: The average download speed in Naples is around 50 Mbps, while the average upload speed is around 16 Mbps. While not as fast as some other Italian cities, the network speeds in Naples are still generally reliable and sufficient for most users.
• Coworking spaces: Lavoro, re.work, Lab46 
• Cost of living: index + rent: 46.56 € (compared to the Italian average of 49.13 €) 
• Average cost for renting a studio: 640,62 € in the city centre, 432,35 € outside the centre (the Italian average is respectively 596,41 € and 451,97 €) 
• Monthly cost for public transport: 43,50 € (compared to the Italian average of 35,00 €)

Bari for freelancers

Bari has been classified as an "advanced" digital city. It is a quiet and very economic maritime city: the ideal destination for digital nomads who are looking for an alternative to large metropolises without sacrificing the cultural vitality of a university centre that has more than 50,000 students.

• Connection speed: Residents in Bari have run speed tests on 14 internet providers. This number is 229% above the Italy average of 4.25 internet service providers. The  average download speed in Bari is 45 Mbps and the most popular provider is FastWeb and it is generally enough for most users there.
• Coworking spaces: Spazio14, Impact Hub Bari, Faro Futuro
• Cost of living index + rent: 41.18 € (compared to the Italian average of 49.13 €) 
• Average cost for renting a studio apartment: 506,25 € in the city centre, 385,71 € outside the centre (the Italian average is respectively 596,41 € and 451,97 €) 

• Monthly cost for public transport: 29,00 € (compared to the Italian average of 35,00 €)

Overall, Italy is one of the best destinations for freelancers because it offers a combination of beautiful scenery, a thriving economy, a supportive community, and a high quality of life. Whether you're a writer, designer, marketer, or any other type of freelancer, Italy provides an ideal environment to work and grow your business. With its rich cultural heritage, entrepreneurial spirit, and relaxed lifestyle, Italy offers an attractive destination for freelancers from all over the world. 

If you want to be a freelancer in Italy, rely on Xolo! 

In conclusion, starting a business as a freelancer in Italy can be an exciting and challenging process. With its supportive business environment, combined with a rich history and culture Italy offers the ideal environment for freelancers to thrive.  It is well-positioned to help freelancers turn their business dreams into reality.

We know that in this period of uncertainty many people, both old and young, nurture the dream of opening their own business, in order to improve their lives and that of others: at the same time, unfortunately, It is not always easy to unravel the tangles of laws and taxes that regulate this sector, and the possibility of error is always around the corner. But don’t worry about it! If you are a freelancer and want to start a new business, rely on Xolo experts for any questions regarding opening the VAT number and applying to the preferential or reduced flat-rate scheme designed for freelancers, and you will have no more worries.