Should I export or set up an Italian company?

Question

My company has an opportunity to start selling our product in Italy. We have an individual there who would assist in this but how do I decide whether to export or set up a company in Italy to trade there? Just looking for some general pointers as we are at the very start of the process.

Answer

Hi
It can be quire complicated setting up a company in another country, but perhaps even more so with Italian bureaucracy.
I would ask if you have a particular reason to do that at the very beginning of the process. If you can succeed with your margins on an export price then you have free movement of goods etc with the EU, without having the difficulty of different tax systems and banking systems. Though I am uncertain of what line of business you are in, but if you have the use of an agent ( is that what you mean by an individual there that can assist) then you are already in a good position to get sales going.

I also have experience of working with Italian companies and brands, & I am in partnership with an Italian company which does sales and marketing there as well.
If you want to have an informal chat to see if I can be of assistance, then don’t hesitate to contact me.
Gilio@exportadvisory.com

Answer

Agree with the above comment.

Although also worthwhile checking the position re tax & export depending upon the product or service.

Also costs and practicalities of logistics, delivery and deployment may also have a bearing on the best course of action.

Answer

Hi, I agree with most of the above comments. One thing which puzzles me, is why would you contemplate setting up an Italian company straight away? One of the great aspects of export, is that it is quite easy to “test the water” at minimal cost. You haven’t given much detail, but it is relatively easy to serve the Italian market in my sectors. One aspect which looks risky is the “friend in market” aspect, it would be very easy to end up with them being classed legally as an agent or distributor, and to gain contractual rights, which may or may not be in your interest. Do they know the market, and if you were engaging their services as an agent or distributor would they be the best placed person to serve you. Many businesses fall into the trap of engaging an ex-pat they know, who may or may not have the market and sector knowledge and contacts you need. UKTI are a good source of advice for starting to export, it may also be worth doing some research on your sector in Italy at an early stage. Hope this helps. Kindest regards, Mike

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