Overview of microbusinesses in Italy

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Meer informatie 
  1. Inleiding
  2. What are microbusinesses?
  3. Financial statements for microbusinesses
  4. Compliance with occupational safety regulations
  5. Advantages of microbusinesses

Very small businesses, known as microbusinesses, dominate the Italian enterprise scene. They are different from small- and medium-sized enterprises. Microbusinesses are small entities that engage in economic activities regardless of their legal structure or tax system. Specifically, this includes craft or other tasks done individually or with family and partnerships and associations involved in economic activities. This article explains in detail what microbusinesses are, the criteria to qualify as one, and the benefits they provide.

What’s in this article?

  • What are microbusinesses?
  • Financial statements for microbusinesses
  • Compliance with occupational safety regulations
  • Advantages of microbusinesses

What are microbusinesses?

Before exploring microbusinesses, it’s important to understand their significant geographic context; so, the question is: how many microbusinesses are there in Italy? Data shows that Italy has 4,211,615 microbusinesses, making up 95.1% of all active enterprises in the country. Moreover, they play a key role in job creation, employing 7,489,913 people, which is 43.7% of the workforce in active enterprises. These numbers highlight the significant role in Italy’s economy. But what exactly is it all about? What is the definition of a microbusiness?

Circular 2003/361/EC outlines the criteria for identifying a microbusiness, implemented in Italy through the Ministerial Decree of 2005. The main criteria involve the number of employees and specific small business budget limits. Article 2 defines a microbusiness as an enterprise that employs fewer than 10 people and has an annual turnover or balance sheet total not exceeding €2 million.

The limits on the number of employees and financial thresholds are cumulative, meaning a business must meet both criteria. For the financial threshold, it can use either the turnover or the balance sheet total.

When calculating the number of employees, note that only full-time workers qualify. For part-time workers, base the calculation on hours worked: for example, two part-time employees working four hours a day count as one full-time employee. Additionally, apprentices on apprenticeship contracts, individuals on training or insertion contracts, and employees on maternity, paternity, or parental leave are excluded from the calculation.

Microbusinesses belong to the broader category of small and medium enterprises (SMEs), which often leads to confusion. This distinction is important because the tax requirements, financing options, and legal obligations differ. Small businesses have different criteria: they have 11 to 50 employees and either an annual turnover or balance sheet total not exceeding €10 million.

Financial statements for microbusinesses

Financial statements are accounting documents a business must periodically prepare by law to ensure accuracy and reflect its financial status. Microbusinesses must also prepare annual statements, which, according to Article 2423, paragraph 1 of the Civil Code, include the following documents:

However, one of the facilities that microenterprises have access to, if they meet specific criteria, is to be able to prepare super abridged financial statements. According to Article 2435-ter of the Civil Code, as amended by Legislative Decree No. 125 of September 6, 2024, microenterprises can do this if in both the first fiscal year and in the next two consecutive fiscal years, they do not exceed two of the following limits:

  • Total assets in the balance sheet not exceeding €220,000
  • Revenues from sales and services not exceeding €440,000
  • Average number of employees employed during the fiscal year not exceeding five

In this case, microenterprises are exempt from preparation of the following:

  • Cash flow statement
  • Notes to financial statements, if the business includes the information in the first paragraph of Article 2427, numbers 9) and 16), at the bottom of the balance sheet
  • Management report, if the business includes the information for numbers 3) and 4) of Article 2428 at the bottom of the balance sheet

Microbusinesses can choose to prepare super-simplified financial statements, but it’s not mandatory. While they aren’t required to present a management report or accompanying notes, they still need to provide some additional information. Specifically, they need to contain details not shown in the balance sheet, such as guarantees, commitments, contingent liabilities, and advances and directors’ fees, detailing the interest rate, main terms, and any repayments. They also need to report the value of shares held in the company and any companies they directly or indirectly control.

Compliance with occupational safety regulations

All businesses with at least one employee, including microbusinesses, must follow labor safety regulations under the Consolidated Safety Act, D. Lgs. 81/08. Here are the main requirements employers must follow to meet current regulations and avoid penalties:

  • Assess company risks and draft the risk assessment document (DVR, or “documento di valutazione dei rischi”). This document identifies workplace risks and outlines preventive measures for health and safety.
  • Train workers on safety in the workplace.
  • Provide appropriate fire extinguishing equipment and first aid kits, and ensure clear signage for easy identification.

The company must also appoint the following:

  • A prevention and protection service manager (RSPP). The employer can fill this role after completing specific training or by an external professional.
  • A workers’ safety representative (RLS) or request for a territorial workers’ representative.
  • One or more first aid officers and fire management officers.

If you’re considering starting a business, even a microbusiness, it’s key to consider various elements, such as choosing a payment service provider. Selecting the right vendor is very important for handling payments quickly and easily and accessing the payment methods best suited to your business. Solutions such as Stripe Payments, with its Optimized Checkout Suite, let you accept payments globally, both online and in person, boost conversion rates, and ensure compliance, saving thousands of hours of technical work.

Advantages of microbusinesses

Competing on equal terms with larger companies can be challenging for these small enterprises. That’s why national and local institutions create measures specifically for microbusinesses. Here are the main tools available for them in Italy:

  • Grant funding opportunities
    Microbusinesses can access nonrepayable financing opportunities, which are economic contributions given to individuals or legal entities without repayment. While they don’t cover all expenses, they provide significant support to help sustain the business.

  • SME Guarantee Fund
    Established in 1996 by the Ministry of Economic Development, this initiative aims to ensure credit access for SMEs and microbusinesses. These enterprises often struggle to get bank credit due to insufficient collateral. The Guarantee Fund acts as a public guarantee, replacing the collateral usually required by banks and other financial institutions for funding.

  • Microcredit
    Very small and newly established businesses often can’t give banks solid assurances about their viability. Since they are newly established, they don’t have a balance sheet to prove their revenue-generating ability. This is where microcredit comes in, offering small loans to companies such as microbusinesses that can’t access traditional financial systems. These loans are small but important, as they enable access to the state Guarantee Fund, which can cover 80% of the requested amount. After that, the bank might only need a personal guarantee for the remaining 20 percent without requiring a pledge or mortgage as security.

  • Preparing financial statements in a very simplified form
    As mentioned, microbusinesses can prepare their financial statements in a very simplified form, excluding the cash flow statement, accompanying notes, and management reports.

De inhoud van dit artikel is uitsluitend bedoeld voor algemene informatieve en educatieve doeleinden en mag niet worden opgevat als juridisch of fiscaal advies. Stripe verklaart of garandeert niet dat de informatie in dit artikel nauwkeurig, volledig, adequaat of actueel is. Voor aanbevelingen voor jouw specifieke situatie moet je het advies inwinnen van een bekwame, in je rechtsgebied bevoegde advocaat of accountant.

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