Useful Info

Setting up a company

When buying a property or business in Italy you may be advised that you need to use a notaio (notary) for the legal work, but that a lawyer is not necessary. You may be told that Italians never use them. So what should you do? Our advice is always to get a good, professional English speaking Italian lawyer, an avvocato, if you do not speak fluent Italian.

Lawyer or Notary?

If you are used to a different legal system, for example that of the UK, then it can be hard to understand the difference between the two. Both professions require a law degree and have their own independent professional bodies. The notaio goes on to take a state recognised qualification and only the best candidates are selected from those that pass.

An avvocato (lawyer/solicitor) acts for the client, whereas the notaio (notary) is more independent and his or her role is to act for the state and for both parties in the transaction.

If buying a property, the lawyer will draw up the initial contracts and instruct the notary. The notary’s job involves checking title deeds, verifying if there is a mortgage or other charge on the property, witnessing signatures, transcribing the contract onto the public registry and so on. It is obligatory to use a notaio for buying property and they charge a separate fee from the avvocato. Italian notaries are said to be among the most expensive in Europe.

Why use a Lawyer?

We have seen that you are obliged to use a notary, but are you obliged to use a solicitor? Technically, no. Many Italians buy and sell property using only the estate agent and notaio. Estate agents (who cannot practise unless they have passed state recognised qualifications) can draw up contracts, but as they get a fee from both sides they will not necessarily act in your best interests, nor keep too close an eye on the notary. In Italy, the law of subrogation means that debts stay with the property and so unpaid debts, (for example utility bills) become the responsibility of the new owner unless discovered and settled before the final contract is signed. That is the role of a lawyer, who will also check that the correct building permits (permessi) have been obtained from the town council and that there are no charges on the property.

How to Find a Good Lawyer

Unless you speak fluent Italian, it is wise to find an English speaking lawyer who is familiar with the concept of conveyancing, which is not something Italian lawyers normally deal with. Contracts have to be written in Italian and the lawyer can explain exactly what you are signing, although it is good to also have the services of an accredited translator if you feel it necessary. It is worth making sure that the avvocato does not double up on the work that the notaio is legally obliged to do, thus meaning you pay twice for things.

Be aware that ‘international lawyers’, for example perhaps a company in the UK advertising that they deal with purchases in Italy, often simply hand over the file to a studio in Italy and take a commission for so doing.

Lawyers in Italy are not allowed to advertise and so the best thing you can do is to find someone who has been recommended. The best place for this is a forum for foreigners living in and buying in Italy. In this way you can ask questions and get recommendations from people who have been through the same experience.

Accountant/Commercialista

If you are going to start any kind of business in Italy or work as a freelance or entrepreneur, you will need to find a good accountant. It is worth mentioning that you can handle your tax affairs yourself with free guidance from a ‘tutor’ at your local agenzia delle entrate (tax office) but unless you are confident, speak good Italian and are good with numbers and changing tax laws, it is probably best to let the professionals deal with it.

The Italian for accountant is a commercialista, and they double as business consultants too rather than just sorting out your taxes. In fact, they are really a cross between a tax lawyer and an accountant. Their title is actually Dottore Commercialista which means they have a university qualification and Ragioniere Commercialista which means they are less qualified. Don’t forget there is also a type of ‘super accountant’ – a fiscal lawyer called a ‘tributarista.’ These people are not chartered accountants at all but tax experts who specialise in advising businesses that are going to be dealing internationally and are always one step ahead of the people in the Inland Revenue! The Italian tax system is complex and  the laws are always changing (have a look in an Italian accountants office and you will see it is lined with law books!) and so it is well worthwhile getting some top class advice at the beginning.

It is often a good idea to go to a tributarista in one of the big cities like Milan, even if you are intending doing business in another part of Italy as he says they are more likely to be most on the ball.

What to Look For

Get your commercialista early on as you will find it an essential part of setting up your business. Unless you speak good Italian, search for someone who speaks English and has experience with ex-pat companies, ideally your kind of business. The icing on the cake is to find someone like this who is also within easy reach of where you live, as most commercialisti will want to see you in person at least once a year.

So Where Do You Find a Good Accountant?

A lot of business in Italy is done on personal contact and recommendation. So the most obvious first port of call is to ask people you know who already do business in Italy if they would recommend anyone. If you are in the UK then this could mean talking to the owner of your local Italian restaurant or the Italian representative who drops into your company. Everybody knows somebody and if their best friend or sister isn’t an accountant then their best friend’s cousin’s brother will know one. The problem with this approach is that you may then feel virtually obliged to use the person concerned even if their services turn out not to be what you need. And being Giovanni’s best friend isn’t necessarily a guarantee of quality.

Your local Italian Chamber of Commerce may be able to recommend a good commercialista who specialises in your particular area of business and your Italian bank manager may also be able to help.

Another approach is to ask for recommendations on one of the forums for ex-pats in Italy. This is quite a good tactic as the people who offer advice are generally those who have ‘been there and done that’ and they are more likely to know what you are looking for. This may well be an English speaking accountant who has experience of UK and Italian fiscal law for example. A good forum to try is www.italymag.co.uk.

Buying a house

Stage One – The Offer and the Prenotazione

Once you have seen a property you like, then before making an offer, do the following:

• Get an English speaking lawyer who will act in your interests
• Find out how long it has been on sale. In Italy it is quite common for a house to be on the market for many months, even years! Have a look at dates on photos.
• Look it up on the internet and see if it is on with other agents at different prices. If it is with another agent more cheaply, then this price has to be the starting price for negotiation.
• Many vendors in Italy set their own prices. Check similar properties on the internet to get a feel for typical pricing of similar houses. Properties are often valued per square metre depending on location and type. If in Italy, you can look at a magazine like Ville e Casali for going rates.
• Find out if the property has one owner or multiple owners (e.g. relatives who have inherited the house). Multiple owners can spell trouble.
• Arrange for a survey. This is not common in Italy so find an English speaking geometrà (architect/surveyor) to do this who understands the type of survey you require. Ask your agent to check with the catastale the plans of the house, what land is included and whether all buildings and rooms in the building have planning permission and the land said to be included is actually registered to the property.
• Make your offer. The agent may suggest you secure your interest and written offer with a small down payment as a gesture of good will. This document should place a time limit on the transaction and state the conditions.

Stage Two – The Preliminary Contract – Il Compromesso

This is done in the presence of a notaio and is a legal document which details the agreed price, what is included in the sale, what is expected of buyers and sellers and the date agreed for the final contract. At this stage you pay a deposit (una caparra). This is usually between 10 and 20% of the purchase price. If there are multiple owners, make sure they all sign the compromesso. Once signed, if you pull out you forfeit the deposit and if the seller pulls out he has to repay you twice the deposit, so this agreement is taken very seriously.

Stage Three – The Final Contract – Il Rogito

Between the compromesso and the final contract, the usual checks are carried out, but in Italy this includes the prelazione. This gives third parties (farmers) with land immediately adjoining the property 30 days to match your offer. They have first refusal, as do sitting tenants and people who do business from the property. One way of avoiding a prelazione is to buy the property through a limited company. Ask your lawyer about this.

It is usual to be present at the rogito, but you can give someone power of attorney to act for you. You’ll need official id (e.g. passport) and your codice fiscale (Italian tax code). Oh, and money, in the form of bankers drafts or even cash. The process involves all the parties plus notaio, geometrà and possibly the estate agent. It is a good idea to have a translator present if you don’t speak good Italian.

It used to be very common too under-declare the value of the house on the deeds to avoid paying high taxes. The difference was paid to the vendor in cash while the notaio had a little coffee break. This is now less common as the authorities have been tightening up, but it is still done in some places. Remember if you sell your house within five years you will be liable for capital gains tax and so if you declare a very low price on one set of deeds but the new buyer wants to declare everything on the new deeds then you will appear to have made a much larger profit than you really have. It always pays to declare the true price on the deeds.

Fees

A good rule of thumb is that purchase costs add about 15% to the price of any property you buy. Here are the main fees you pay:

• Notaio – based on the declared value of the house
• Stamp duty – around 7% Local tax – between 0.4% and 0.8%
• Real Estate tax – 3% Geometrà fees
• Estate agents fees – usually 3% (yes the buyer pays too!)

How to move in Italy

Moving to Italy and starting a new life is an exciting but daunting prospect. You can’t control the emotions you will experience and the unexpected things you will encounter, but in best Boy Scout style it helps to ‘be prepared’.

Assuming you have sold or rented out your house and have a property to live in once you reach Italy, then the next thing to think about is shipping over your goods and the paperwork you will need to have in order at the beginning.

Moving to Italy checklist:

• Get funds organized using a currency exchange company, it’s cheaper than using the bank to send over euros. Open an Italian bank account.
• Get quotes and book your international removal company. Choose one that has experience of transporting to Italy and that is an accredited customs clearing agent. It may be possible to transport goods a partial load if you are not taking everything with you. Make several copies of the inventory.
• Citizens of countries outside the EU may need a visa. Check with your embassy.
• Organize pet passports and vaccinations for animals. Pets should be micro chipped and have a valid rabies vaccination. They should also have a pet passport.
• Make sure you have a codice fiscale (Italian tax number) and a permesso di soggiorno (stay permit) and if you have children a stato di famiglia (Family book/status of family document) which you get from your local town hall (comune.)
• Take with you several copies of wedding certificate, passport and driving licence and if you have children: birth certificates, vaccination certificates and passport size photos.
• Get an international driving licence
• While waiting to get an Italian medical card, it’s a good idea to get a European Health Insurance Card (EHIC)
• Take adequate supply of prescription medicine and if possible have medical notes from your doctor translated into Italian for your new Italian GP.
• Get your eyes tested and keep the prescription. Take spare pairs of glasses.
• Contact the local education authority to find out about schools. If under 18 your child has the right to be educated in an Italian school even without the right paperwork, although that has to be provided later. Get a translated copy of your child’s current curriculum to give the new school. You will need to provide: photos, stato di famiglia, birth certificate (translated), codice fiscale of parent/guardian. There are also international schools in many big cities.
• Arrange for Telecom Italia to install ADSL internet connection and phone lines if your property does not have those.
• Change utility bills to your name. Open new accounts with relevant paperwork.
• Get a commercialista (accountant) if you are planning to open a business or to be self employed. They can also handle any local taxes that need to be paid, for example the twice-yearly community charge (ICI) which at the time of writing is payable on new builds but not on main residences. It may be worth employing an accountant who works in both languages and is used to dealing with non-Italians.

These contents are provided by:

Business e via Italy (BEV) is an online business service designed to help anyone set up in Italy, enter the Italian market or find a business for sale. BEV also helps Italian companies reach international trading partners.
www.businesseviaitaly.com