As a freelancer in Italy working with a partita IVA, you’re probably already familiar with the regime forfettario (regime fiscale). It’s a simplified tax regime designed to make life easier for small businesses and freelancers like yourself. One of the key benefits is aliquote IVA ridotte (lower VAT rates), along with contabilità semplificata, which means less administrative work and lower costs when it comes to managing your finances. Of course, like any system, there are vantaggi e svantaggi (advantages and disadvantages) to consider.
For freelancers with a propria attività (own business), the benefits include:
- Contabilità semplificata (simplified accounting procedures), which makes managing your finances much easier.
- Lower tax rates, especially under the regime forfettario (flat-rate tax regime).
- The freedom to operate your attività d’impresa (business activity) with minimal legal formalities.
However, freelancing comes with certain challenges. One significant downside is responsabilità illimitata (unlimited liability), meaning that if your business runs into financial or legal troubles, your assets could be at risk. Freelancers also have limited access to deductions and cannot deduct all business expenses that are available to larger entities like a società di capitali (joint-stock company) or società di persone (partnership).
What is a Limited Liability Company (Partita IVA SRL)?
A società a responsabilità limitata (SRL) is a completely different business structure (forma giuridica) compared to operating as a freelancer. Unlike freelancers who have responsabilità illimitata (unlimited liability), an SRL offers responsabilità limitata (limited liability), which is a significant advantage. This means that as a business owner, you have your assets protected. In the case of financial troubles, only the company’s assets, not your wealth, are at risk.
Benefits with Partita IVA SRL
With an SRL, you can benefit from:
- Responsabilità limitata, which protects personal assets.
- Broader tax deductions for business-related expenses.
- Access to more complex business structures and growth opportunities.
- The ability to hire employees and offer shares to partners.
However, costituire una SRL requires a higher level of commitment. You’ll need to contribute capitale sociale (minimum capital) to form the company and comply with contabilità ordinaria requirements. The SRL deve essere registered presso la camera di commercio, adding another layer of formality to running your business.
When Is It Advantageous to Switch from Freelancer to SRL?
The decision to transition from a freelancer to an SRL depends on various factors, including income, liability risks, and the long-term goals of your business. Here are some key indicators that it might be time to make the switch:
Income Threshold
If your income exceeds the limits set for the regime forfettario (currently €85,000), you may no longer qualify. At this point, an SRL may be more advantageous for higher revenues.
Personal Asset Protection
If your business operates in a high-risk industry, having an SRL can protect your assets. The partita iva SRL creates a separate legal entity (persona giuridica a tutti gli effetti), ensuring that your liabilities are limited.
Business Growth
So, if you plan to expand, hire employees, or take on significant investments, an SRL offers a more suitable structure. It also allows for a more formalized shareholding arrangement if you want to bring in partners or investors.
Complexity of Operations
When your business operations become more complex, the SRL’s access to contabilità ordinaria can help manage the increased workload. You will also access a wider range of tax deductions and credits.
To sum up…
In the early stages of your business, aprire la partita iva and freelancing offer simplicity and lower taxes. However, as your income grows or your business becomes more complex, forming an SRL (società può) provides significant fiscal advantages, legal protections, and expansion opportunities.
While switching to an SRL brings additional responsibilities, it also opens the door to greater financial security and long-term success. If you’re unsure when the time is right to make the change, consulting a tax advisor or accountant can help tailor the decision to your specific business needs.
Would you like to read more on this topic? Check our related articles here: Freelancer right in Italy, Italian freelancer visa: a step by step guide for self empoyed and enterpreneurs and How to start a small business in Italy
