Why Italian entrepreneurs look to Ticino

Tax burden and predictability

The first motive that Italian entrepreneurs name is tax, although the comparison is less one-sided than the reputation of Switzerland suggests. An Italian company pays corporate income tax (imposta sul reddito delle società, IRES) at 24 per cent and the regional tax on productive activities (imposta regionale sulle attività produttive, IRAP) at a standard rate of 3.9 per cent, levied on a base that does not allow the deduction of most interest and, until recently, of labour costs.¹ A company in Lugano bears a combined federal, cantonal and communal profit tax that KPMG's Swiss Tax Report put at 16.05 per cent for Ticino in 2025, after a reduction of 3.11 percentage points in a single year.² The gap at the level of the owner is wider. Italian personal income tax (IRPEF) reaches its top rate of 43 per cent at EUR 50,000 of taxable income, to which the regional and municipal surcharges add up to about 2.5 percentage points in Milan.³ A resident of Lugano with the same income pays less. A private capital gain on the sale of shares is in principle free of Swiss income tax.

Entrepreneurs, their advisers and the Ticino authorities nevertheless stress a second element that is harder to quantify: predictability. An Italian online publication for small and medium enterprises summarized the attraction of Switzerland in 2013 as tax rates with "variations much more limited and predictable" and fewer bureaucratic constraints.⁴ Italian tax law has been amended at a pace that makes long-term planning difficult. The IRPEF scale was rewritten in 2022, 2024 and again by the Budget Law for 2026, which lowered the second rate from 35 to 33 per cent.⁵ The corporate residence rules, the controlled foreign company rules, the exit tax and the regime for new residents have all been changed within the last eight years. Swiss tax law also changes, as the reform of corporate taxation in 2020 and the minimum tax of 2024 show. Its changes are, however, debated for years, submitted to referendums and accompanied by transitional rules, which allows a business to see them coming.

Bureaucracy, courts and legal certainty

The second motive is the cost of dealing with the state. The time needed to obtain a judgment is the clearest indicator. According to the country fiche that the European Commission for the Efficiency of Justice (CEPEJ) prepared for the EU Justice Scoreboard, Italian courts needed about 540 days in 2022 to dispose of a civil and commercial case at first instance, against an EU median of 239 days. At second instance the figures were 753 and 207 days, and at the Court of Cassation 1,063 and 216 days.⁶ A creditor who must sue a customer in Italy may wait six or seven years for a final decision. For a business whose margins depend on collecting receivables, the length of proceedings is a cost comparable to a tax.

Switzerland offers shorter proceedings, a commercial register that registers a new company within days and an administration that is generally accessible in Italian. A report in Panorama in 2013 quoted advisers who estimated that the incorporation of a Swiss company took about ten days and cost about EUR 800 without notarial fees.⁷ The same report pointed to Swiss employment law, which allows an employer to terminate an employment relationship of indefinite duration with notice and without the justification that Italian law requires. Legal certainty in this sense means that the rules are known, that they are applied in a predictable way and that a dispute can be resolved within a time that matters for the business. Italian entrepreneurs give these reasons alongside tax. They are reasons that a Swiss adviser cannot change and an Italian adviser cannot offer.

Notes

1. TUIR (Presidential Decree No. 917 of 22 December 1986), Art. 77 ("L'imposta è commisurata al reddito complessivo netto con l'aliquota del 24 per cento"), rate set by Law No. 208 of 28 December 2015, text at Brocardi.it, https://www.brocardi.it/testo-unico-imposte-redditi/titolo-ii/capo-i/ art77.html; IRAP standard rate of 3.9 per cent since the Finance Law for 2008 (Art. 1 para. 226), Wikipedia (Italian), "Imposta regionale sulle attività produttive", https://it.wikipedia.org/wiki/Imposta_regionale_sulle_attivit%C3%A0_produttive (consulted as a last resort). Deductibility of labour costs for permanent employees from 2015. ↩
2. SWI swissinfo.ch, "Swiss corporate tax rates edge down slightly", 21 May 2025, https://www.swissinfo.ch/eng/various/swiss-corporate-tax-rates-edge-down-slightly/89374335 (KPMG Swiss Tax Report 2025: Ticino 16.05 per cent, reduction of 3.11 percentage points; Swiss average 14.4 per cent; Zug 11.85 per cent). The Italian figure of 27.9 per cent is the arithmetical sum of the nominal IRES and IRAP rates, whose bases differ. ↩
3. "Legge di bilancio 2026: revisione delle aliquote IRPEF", EC News, 7 January 2026, https://www.ecnews.it/lavoro/news-del-giorno/legge-bilancio-2026-revisione-aliquote-irpef/ (Law No. 199 of 30 December 2025: 23 per cent up to EUR 28,000, 33 per cent to EUR 50,000, 43 per cent above). Regional surcharge for Lombardy up to 1.73 per cent and municipal surcharge for Milan 0.8 per cent: Tuttocalcolato, "Milano – Aliquote 2026", https://tuttocalcolato.it/calcolo/irpef/milano/. ↩
4. Edoardo Musicò, "Fuga in Svizzera: tappa obbligata per PMI?", PMI.it, 27 September 2013 (updated 12 February 2018), https://www.pmi.it/?p=10744 ("variazioni dei tassi d'imposizione fiscale molto più limitate e prevedibili"). ↩
5. EC News (above), on Art. 1 para. 3 of Law No. 199/2025; TUIR, Art. 11 para. 1 and notes, text at Brocardi.it, https://www.brocardi.it/testo-unico-imposte-redditi/titolo-i/capo-i/art11.html (three brackets of 23, 35 and 43 per cent introduced for 2024 by Legislative Decree No. 216 of 30 December 2023, para. 1 amended by Law No. 207 of 30 December 2024 from 2025 and by Law No. 199/2025 from 2026). ↩
6. CEPEJ, Italy – EU Justice Scoreboard country fiche (2022 data), Council of Europe, https://rm.coe.int/italy-eu-scoreboard-country-fiches-2022-data/1680b065f9 ("In 2022, first instance civil (and commercial) litigious cases are solved in approximately 540 days"). ↩
7. Massimo Morici, report on transferring a business to Switzerland, Panorama, 30 September 2013, https://www.panorama.it/attualita/economia/trasferire-azienda-svizzera. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.