A flashback to our YME project. The most important animation lessons in English, Arabic, Turkish, Dutch, Romanian and Italian. For the YME Green Book, more tips and tricks and entrepreneurial guidance, please visit our website www.ymeproject.com and platform yme-platform.net.

Do you want to Start Up a company in Romania? In 2017 in Romania registered a total of 525,660 companies. A large share of the businesses operating in Romania were registered in the services sector, as stated by the official data provided by the National Statistics Institute (INS). The services sector is also the largest employer of the country. Foreign businessmen who want to set up one of the legal entities should also know that the country has a total of 73,000 multinational groups of companies operating on the local market. Out of these, only a small percentage are represented by companies founded by Romanian businessmen; more exactly, only 5,300. We have already done YME Start Up articles on The Netherlands, Turkey, Italy and United Kingdom. In this article we tell you how to start up in Romania. YME continues…

How to Start Up a Business in Romania?

The services sectors has the largest share of the Romanian active companies, accounting for 46.7% of the total enterprises registered here; it also stands for 35.4% of the total workforce employed in Romania; the total number of Romanian companies – 525,660 – marked an increase of 5% compared to the previous year; the Romanian trade sector accounted for a total of 172,000 companies; 79% of the employees in Bucharest, the country’s capital city, work in the services sector; Bucharest had, at the level of August 2018, a total of more than 1 million employees (the city has a population of more than 2 million citizens). As said, foreign businessmen who want to set up one of the legal entities should also know that the country has a total of 73,000 multinational groups of companies operating on the local market. Out of these, only a small percentage are represented by companies founded by Romanian businessmen; more exactly, only 5,300.

Step 1: Choose legal form

The following legal forms are:

• Societăți comerciale, abbreviated SC (Companies)
• Societăți de persoane (Unincorporated companies, also called Partnerships)
• Societatea în nume colectiv, abbreviated SNC (General Partnership, abbreviated GP)
• Societatea în comandită simplă, abbreviated SCS (Limited Partnership, abbreviated LP)
• Societăți de capitaluri (Incorporated companies, also called Corporations)
• Societatea în comandită pe acțiuni, abbreviated SCA (Company Limited by Shares)
• Societatea pe acțiuni, abbreviated SA (Joint-Stock Company)
• Societăți hibride (Hybrid companies)
• Societatea cu răspundere limitată cu proprietar unic, abbreviated SRL cu proprietar unic
• S.A. (Societate pe Acţiuni): ≈ plc (UK)
• S.C.A. (societate în comandită pe acţiuni): limited partnership with shares
• S.C.S. (societate în comandită simplă): ≈ limited partnership
• S.N.C. (societate în nume colectiv): ≈ general partnership
• S.R.L. (societate cu răspundere limitată): ≈ Ltd. (UK)
• PFA (persoana fizica autorizata): ≈ self-employed (UK) Sole Proprietorship (US)
• O.N.G. (Organizație Non-Guvernamentală): ≈ Non-state pension fund (literally: Non-Governmental Organization)
• limited liability company “societate cu raspundere limitata” (SRL); joint stock company “societate pe actiuni” (SA

The most common legal forms are the SRL (BV, BVBA) and the SA (NV). You choose a legal form:

1.Societate cu răspundere limitată (SRL) – Limited liability company

Societate cu răspundere limitată, abbreviated SRL (Limited Liability Company) represents the most common way to start a business in Romania and it is also the preferred legal entity of foreign investors registering a Romanian company. It is incorporated with a capital of RON 200. It can be founded by a single shareholder. The main feature of a limited company is obviously that the liabilities of social debts is limited to contributions to subscribed and paid shares. As we presented above, the minimum share capital for a Romanian limited liability company is of RON 200, which has to be divided into shares that have a value of minimum RON 10. The maximum number of partners that can associate in a limited liability company is 50.

These shareholders or associates can be legal entities or natural persons. A Romanian LLC can have one or more directors, who may have full or limited powers; they can be Romanian or foreign citizens. The term of a Romanian director may be limited or unlimited. In case the LLC has a sole shareholder, then this shareholder can also be an employee of the respective company (in this case a Labor Agreement must be drafted and filed with the Labor Chamber in Romania).

2. Societate pe acţiuni (SA) – Public Limited Company

The SRL can be 100 percent foreign-owned. The directors may also be of foreign origin. The number of participants in an SRL is at least one and at most fifty. A sole shareholder may not be a sole shareholder in more than one SRL. The one-man business also occurs frequently as an SRL in Romania (asociat unic).

The capital contribution can be made both in cash and in kind and amounts to at least 200 lei (1 Ron = 4.75 euros on 8 April 2019).

The Romanian “Partnership Limited by Shares” Company – Societatea in Comandita pe Actiuni

It is not a very common type of Romanian entity. This business form is similar with the “Sleeping Partnership Company” because it needs to be incorporated by at least two shareholders, and just like in the case of the “Sleeping Partnership Company”, the company’s shareholders have different types of liability, and this can be presented by our team of lawyers in Romania.

The main difference between the two types of companies is that the Partnership Limited by Shares Company has a shared capital formed of stocks. The liability for the company’s obligations is different for the shareholders, thus, there are shareholders that are personally liable for the obligations of the company and they are called ”comanditati”. Our law firm in Romania can provide further details regarding the rights and the obligations of the company’s founders.

The other types of shareholders, “comanditari”, are liable for the company’s debts only to the amount with which they have participated at the company’s share capital. This business form must be incorporated with a minimum share capital of RON 90,000 (or its equivalent in EUR, which is EUR 19,042). The company can be administrated only by the shareholders that are personally liable for the company’s obligations.

What are the advantages of a Romanian SRL?

 Besides the low value concerning the company’s capital, the Romanian SRL provides further advantages to its founders. Our Romanian law firm can provide an extensive presentation on the characteristics of a local SRL, which can be formed with 100% foreign ownership. Other characteristics of the Romanian SRL are the following:

• it can benefit from a fast registration procedure (the company can be formed in a period of three days);
• it can be incorporated by a single shareholder, who can be a foreigner;
• the company’s shares can’t be divided, nor can be sold to the general public;
• it can’t be registered by another company, if the Romanian SRL is incorporated by a single shareholder;
• the company must establish an official business address, where it can receive its official correspondence.

What are the main documents for starting a Romanian SRL?

The registration procedure for each of the company types available in Romania is rather similar. Differences can appear, however, in the types of documents the investors have to prepare upon the registration of the chosen legal structure. In the case of a Romanian limited liability company, investors must submit the following documents:

• the articles of association and the certificate of incorporation, that must be deposited with the National Trade Register Office;

• in the case in which the company has as shareholders corporate investors, it is necessary to deposit the articles of association of the respective companies;

• excerpts issued by the Trade Register Office operating in the country where the corporate shareholders are registered;

• the file must also contain a letter of creditworthiness, issued by a financial institution;

• the standard application form and copies of the company’s representatives’ identification documents.

Step 2: Officially Register your Company with the Chamber of Commerce

The registration process for a new legal commercial entity is the primary function of National Trade Register Office (NTRO) [Oficiul National al Registrului Comertului (ONRC)], a national authority subordinate to the Ministry of Justice.

The legal framework pertaining to the establishment of new companies is primarily defined by the 31/1990 Law which outlines the necessary documents, procedures and capital requirements. An exhaustive list of documents and procedures is made available by the NTRO, both in Romanian and English.

Any new private limited company founded by persons who have not been an associate or share-holder in another company within the European Economic Area can benefit from a waiver on all set-up taxes and tariffs required by the NTRO as well as certain other benefits

outlined in the 6/2011 Government Emergency Ordinance if they choose to register as an SRL-D (debutant private limited company) microenterprise.

→ 31/1990 Law

→ 6/2011 GEO

→ ONRC

Specific Economic Sector of Start-up

The activity of any company must fall within a registered and regulated economic sector, as classified by the CAEN (Classification of Activities in the National Economy) nomenclature (code).

Specific authorization procedures and permits may be necessary for a variety of specialized economic activities ranging from food processing, natural resources extraction to telecommunications and medical services.

→ CAEN

Step 3: Fiscal regulation and Accountancy 

Accountancy

Taxes and contributions owed by companies and individuals are codified into the Fiscal Code, the 227/2015 Law, updated and modified.

The Romanian fiscal regime for companies is defined by four primary taxes that apply either directly to companies, their owners or consumers as well as two taxes paid by employees (and the self-employed).

Corporate Tax

The corporate tax (16%) payable by all companies on their taxable profit

Dividend Tax

The dividend tax (5%) which covers dividend payments made by the company to associates or share-holders. The microenterprise income tax (1-3%) paid by all microenterprises (private limited companies with a gross income of under 1 million Euro per annum which register as a microenterprise) on their gross income in lieu of the corporate tax. The value added tax (19% or reduced for certain categories) payable by all final consumers, with the option for new companies to be exempt if their gross income is under 65.000 Euro. Additionally, employees will also pay two taxes on their salary, as follows. The income tax (10%) payable on taxable income (differs from gross income primarily by being calculated as the income after paying the mandatory social and medical insurance contributions). The contributions to social (and medical) insurance (25%+10%+2.25% – the last one being paid by the employer). Certain criteria and conditions apply to all tax regimes with specific information being provided by Ministry of Finance.

→ Romanian Ministry of Finance

→ 227/2015 Law

Write a business plan

For all the tips and tricks for writing a business plan we would like to recommend this link to our YME Platform

Step 5: Opening a Business Account

If you wish to have a business account with a Romanian bank you must go in person. The deposit of the share capital in an account opened at the time of incorporation can also be done fiduciary.

Step 6: Environmental Protection Laws and Rules and Applying for Permits

Depending on their economic sector, companies may need to adhere to more stringent or specific rules and regulations regarding environmental protections, especially in the agricultural, energy and industrial areas of activity. As such, a special environmental authorization process may be required with a comprehensive list of economic activities that require such an authorization being made available by the National Environmental Protection Agency trough the 1798/2007 Ministerial Order, updated and modified.

Most Romanian environmental protection laws derive directly from European Union directives and environmental protections and are enforced by the National Environmental Protection Agency which is also charged with publishing any and all legislation pertaining to the environment.

→ National Environmental Protection Agency

→ 1798/2007 MO

→ European Union Environment Portal

Step 7: Privacy / Personal Data Protection (Making a business website)

Personal Data Protection

Data protection regulations in Romania are outlined by the 363/2018 Law, which in turn was developed and adopted in order to comply with European Union regulations, specifically the General Data Protection Regulation.

Data protection rules and regulations are enforced by the National Supervisory Authority for Personal Data Processing, which is also the body that is authorized to investigate GDPR complaints.

→ National Supervisory Authority for Personal Data Processing

→ 363/2018 Law

→ European Union data protection rules

→ GDPR

Step 8: Insurance

In Romania all self-employed (authorized persons) and employees are required by law to participate in and be covered by the national insurance systems for retirement and health, and in certain circumstances, unemployment.

Subsequently, while the insurance contribution liability may slightly vary depending on temporary schemes for business start-ups, generally the liability is similar for an authorized person and an employee, the primary difference consisting in the fact that employees have their contributions retained at the source (by the employer) and paid directly, while the self-employed are personally responsible for handling the payments.

Step 9: Management of human resources

In addition to the fiscal provisions pertaining to employees which have already been specified, the general rules and regulations governing the labour market are outlined by the Labour Code, 53/2003 Law, republished with updates and modifications.

The law outlines normal/usual employee protections and rights in line with European continental norms, such as the right to unionize, the right for collective bargaining, the right for paid leave etc. The standard work week is 40 hours, at a maximum of 8 hours per day, while the minimum paid leave (excluding national holidays) amounts to 20 work days per year.

As with all other areas, European Directives apply and are translated into law per the requirements of the TFEU.

→ European Commission Employment, Social Affairs & Inclusion Portal

→ 53/2003 Law

Step 10: Patents and Brands

The State Office for Inventions and Trademarks (SOIT) [Oficiul de Statpentru Inventii si Marci (OSIM)] is the Romanian national authority charged with the registration and authorization of patents, brands and other intellectual property items.

The primary laws governing intellectual property are the 129/1992 Law, 350/2007 Law, 16/1995 Law, 84/1998 Law and the 64/1991 Law, republished with updates and modifications.

A comprehensive list of tariffs and applicable taxes for trademark registration and similar activities is provided by the SOIT.

→ State Office for Inventions and Trademarks

→129/1992 Law

→ 64/1991 Law

→ 350/2007 Law

→ 16/1995 Law

→ 84/1998 Law

→ Tariffs

Are you an Entrepreneur and What kind of skills do you need to be a good entrepreneur? What makes someone a successful young entrepreneur? The key qualities are traits such as creativity, the ability to keep going in the face of hardship, and the social skills needed to build great teams… If you want to start a business, it’s essential to learn the specific skills that underpin these qualities. Last week at the YME YouTube Multiplier Event the producst were explained to a big audience. In our YME YouTube Flasback blog-series we will look back on the products showcased: In this blog: The Entrepreneurial e-Assessment on the YME Platform.

Defining Entrepreneurship

Some experts think of entrepreneurs as people who are willing to take risks that other people are not. Others define them as people who start and build successful businesses. Thinking about the first of these definitions, entrepreneurship doesn’t necessarily involve starting your own business. Many people who don’t work for themselves are recognized as entrepreneurs within their organizations (we would call these people intrapreneurs).

Regardless of how you define an “entrepreneur,” one thing is certain: becoming a successful entrepreneur isn’t easy. What the entrepreneurship definition doesn’t tell you is that entrepreneurship is what people do to take their career and dreams into their hands and lead it in the direction of their own choice. It’s about building a life on your own terms. No bosses. No restricting schedules. And no one holding you back. Entrepreneurs are able to take the first step into making the world a better place, for everyone in it.

Entrepreneurial Self-Assessment

If you’re starting or leading a company, it’s beneficial to know yourself inside and out. Even though you’ve been with yourself your whole life, it’s hard to pinpoint your qualities. Assessing yourself with professional self assessment tools can help you understand how you work best, so you can make appropriate changes, help you choose to recognize your strengths and weaknesses and see holes and spots where you need help.

The YME Entrepreneurial Guide for the young Migrant Entrepreneurs always starts with the EC link https://ec.europa.eu/migrantskills/#/ and the file created, which the young migrant will produce, will be uploaded as a file with subscription on our YME Portal. Our portal will provide a free psychometric assessment tool for young people to assess their own enterprise skills. The YME self-assessment activity is the examination of oneself in order to assess particular aspects. It can be performed for establishing self-identity, determining certain needs (learning, etc.) or checking self-assurance. A cardinal aspect of every self-assessment activity is the honesty with which it is applied. If the person indulges herself/himself, the results of self-assessment will be erroneous.

Honesty is very important with self-assessment

The purpose of self-assessment is to help the young person know the extent of his abilities and to improve upon them without the need of a performance appraiser. It involves the use of questions such as; what are my strengths; what are the obstacles, etc. As indicated above, the honesty of the persons who performs self-assessment is important in order to obtain reliable results. Also, the locus of control can influence the results of self-assessment. Persons with high locus of control tend to make mistakes during self-assessment. The YME psychometric assessment is a procedure which will help you in better define your entrepreneurial profile, and therefore your professional goals, setting up a business or start up

Have you ever considered yourself to be Enterprising?

Geoff Leask, director of Young Enterprise Scotland (YES) was invited for the YME Panel ‘Entrepreneurship and Doing Business as a Migrant’ (we will post a seperate blog about this panel discussion) at the YME YouTube Multiplier Event. YES, an organisation from the United Kingdom have developed a free assessment tool for young people to assess their own enterprise skills and see where their strengths lie – a young person may be a successful future entrepreneur, they just don’t know it yet…

We believe that to help young people develop skills and understand what they’re good it, they need to have a starting point. The “My Enterprise Profile”  assessment tool is this starting point. Give yourself 15 minutes to go through the questions. After completion you will be sent a thoroughly detailed report that illustrates six key areas of enterprise and which of these areas you excel in.

These areas are:

• Making your customer’s experience positive
• Connecting with the market
• Finding new ideas and concepts
• Growing your business
• Maintaining commitment and focus
• Being prepared and ready for business.

Your reports will be sent to you via email and will be a document that’ll display these areas matched to your answers. Your report will have a diagram of each area with levels of how you perform in each.

So, why not take that YES test now by clicking this link.

Go to the YME self-assessment !!!

YME You Tube Event

During the YME YT event the entrepreneurial e-assessment is explained as well:

Do you want to start up a business in Turkey? Foreigners who want to open a business must obtain a working permit from the Ministry of Labour, Family and Services before starting to work. Read below all you need to know to be a successful young migrant entrepreneur in Turkey. Do you want to know more, join the YME YouTube Multiplier Event (April 22nd 2021): Register here and don’t Miss out !

Setting up a Business in Turkey

There is a provision in the clause (l) of Article 5 of the Regulation on Opening a Business and Working Licenses published in the Official Gazette dated 10.08.2005 and numbered 25902, which includes the provision “Complying with the provisions of the legislation on foreigners regarding opening and employing businesses by foreign nationals”. In accordance with Law No. 6735, foreigners who will open a business must obtain a work permit from the Ministry of Labour, Family and Social Services before starting to work. 

If foreigners want to open a business and work under their own names and accounts, they must apply to MoLFSS to obtain a work permit following the completion of the establishment procedures of the said workplaces before the relevant authorities (such as the publication of the workplace in the trade registry or the trade registry office and obtaining a tax number). As a result of the evaluation to be made by MoLFSS, foreigners whose request is approved and who have been granted work permits must apply to the relevant municipalities with these permits and request a business license and work license.

The procedures and principles for Syrians under temporary protection to work in our country are regulated by the “Regulation on Work Permits of Foreigners under Temporary Protection”, which was published in the Official Gazette dated 15.01.2015 and numbered 29594 , and a work permit from for foreigners MoLFSS under this scope to work in Turkey.

Foreigners working independently on their own behalf and account within the scope of temporary protection, after the completion of the establishment procedures of the workplace on the condition that they have tax numbers, by scanning the documents showing the activity of the workplace such as the trade registry gazette for companies, the relevant chamber registration document for real person merchants, tradesmen and craftsmen, to the automation system during the application. He has to get a work permit before starting to work. The foreigner will be required to have a work permit while granting a business and working license by the competent authorities.

Syrians in Turkey are almost 4 million

Despite their success, young migrant (Syrian) entrepreneurs in all countries are working in an unfamiliar economy and regulatory environment, limited customer base and inconsistent access to incentives and business support. In Turkey, Partnerships with Turkish businesses can help ease some of these challenges. Syrian businesses bring unique competencies, including familiarity with Turkey’s Arabic-speaking consumers and existing links with businesses across Syria, the greater Middle East, and North Africa. Leveraging these competencies can mean new growth opportunities for Turkish businesses. Essentially, while Syrian businesses can offer access to new markets abroad, Turkish businesses can help Syrians crack the market within.

The Turkish Ministry of National Education (MoNE) recommends the following to cultivate greater interaction and eventually partnerships between Turkish and Syrian businesses for mutual benefits:

• Provide Syrian businesses with resources to navigate the Turkish market and regulatory environment.

• Invest in training and capacity development opportunities for Syrian and Turkish businesses, as well as public agencies serving businesses and foreign investors.

• Offer networking opportunities and platforms for Syrians businesses to demonstrate their products and services.

• Reduce policy uncertainties and regulatory burdens to encourage long-term Syrian investment in Turkey and facilitate formalization.

• Increase outreach and equitable access to incentives for Syrian businesses, especially to realize their export potential and brand development.

• Collect and provide access to detailed data on Syrian businesses for further analysis.

Chambers of commerce and industry across all provinces can:

–    Prepare Arabic language guides to help Syrian entrepreneurs navigate the process of establishing and operating a business in Turkey. The Gaziantep Chamber of Commerce has experience doing this.

–    Staff dedicated help desks for Syrian entrepreneurs interested in establishing a business. Provide training and support on Turkish laws and regulations, banking regulations, and available investment and export incentives.

–    Organize business network meetings. Bring Syrian and Turkish businesses together under the umbrella of an impartial chamber.

–    Provide Syrian businesses with a platform and venue to introduce their commercial activities to Turkish businesses. Holding these meetings in English may offer a common working language for some potential partners

Step 1: Choose legal form

Company Types under TCC and Alternative Forms

There are corporate and non-corporate forms for companies under the TCC, which states that companies may be established under the following types:

a.    Corporate forms

Joint Stock Company (JSC)

Limited Liability Company (LLC)

Cooperative Company

Although some financial thresholds (i.e., minimum capital) and organs differ from each other, the procedures to be followed for establishing a JSC or an LLC are the same.

b.    Non-corporate forms

Collective Company

Commandite Company​

Although companies may be established according to these five different types, JSC and LLC are the most common types chosen both in the global economy and Turkey.

Step 2: Officially Register your Company with the Chamber of Commerce

Turkey has introduced reforms with a view to making it easier to do business in order to enhance the investment environment, eliminating red tape in setting up a business and minimizing costs and procedures. To this end, establishing a company is now only carried out at Trade Registry Offices located in Chambers of Commerce and designed to be a ‘one-stop shop’. The process is completed within the same day. The process of establishing a joint stock or limited liability company is fairly simple and straightforward, especially once the notarization and apostille certification or ratification formalities are completed in respect of the documents to be submitted with the application. In order to begin the process of establishing a company in Turkey, certain information must be entered on MERSIS. This step requires, among others, a tax identification number to be obtained for non-Turkish individuals and/or legal entities who will be shareholders and/or directors of the company. Once the tax identification numbers have been obtained from the relevant tax authority and provided to MERSIS, a MERSIS number will be generated for such foreign nationals. 

Upon submission of the articles of association through MERSIS, such articles of association shall be certified by a public notary or the relevant trade registry in Turkey. Upon the certification of the articles of association, the certified articles of association and all other supporting establishment documents (e.g. declarations of signatures by the members of the board of directors and other signatories, letter of blockage from a bank in Turkey certifying that at least 25% of the share capital of the entity has been deposited and blocked in a bank account, etc.), as requested by the relevant trade registry, must be physically submitted for registration.  Once the relevant trade registry certifies all documentation as complete and suitable, a registration certificate is provided which evidences the incorporation of the new company. Trade registry will also provide the mandatory legal and financial books of the newly incorporated company together with the registration certificate. Further reading, click here.

Step 3: Fiscal regulation and Accountancy

TURKISH TAXATION SYSTEM

Turkish direct taxation system consists of two main taxes; income tax and corporate tax. An individual is subject to the income tax on his income and earnings, in contrast to a company which is subject to corporate tax on its income and earnings. The rules of taxation for individual income and earnings are provided in the Income Tax Law 1960 (ITL). Likewise, the rules concerning the taxation of corporations are contained in the Corporation Tax Law 1949 (CTL). Despite the fact that each is governed by a different legislation, many rules and provisions of the Income Tax Law also apply to corporations, especially, in terms of income elements and determination of net income.

INCOME TAX:

Taxable Income:

The income tax is levied on the income of individuals. The term individuals mean natural persons. In the application of income tax, partnerships are not deemed to be separate entities and each partner is taxed individually on their share of profit. An individual’s income may consist of one or more income elements listed below:

– Business profits,

– Agricultural profits,

– Salaries and wages,

– Income from independent personal services

– Income from immovable property and rights (rental income)

– Income from movable property (income from capital investment)

– Other income and earnings without considering the source of income

Tax Liability:

In general residency criterion is employed in determining tax liability for individuals. This criterion requires that an individual who has his place of residence in Turkey is liable to pay tax for his worldwide income (unlimited liability). Any person who remains in Turkey more than six months in a calendar year is assumed as a resident of Turkey. However, foreigners who stay in Turkey for six months or more for a specific job or business or particular purposes which are specified in the ITL are not treated as resident and therefore, unlimited tax liability does not apply to them.

In addition to residency criterion, within a limited scope, nationality criterion also applies regardless of their residency status, Turkish citizens who live abroad and work for government or a governmental institution or a company whose headquarter is in Turkey, are considered as unlimited liable taxpayers. Accordingly, they are subject to the income tax on their worldwide income.

Non-residents are only liable to pay tax on their income derived from the sources in Turkey (limited liability). For tax purposes, it is especially important to determine in what circumstances income is deemed to be derived in Turkey. The provisions of Article 7 of the Income Tax Law deal with this issue. In the following circumstances, the income is assumed to be derived in Turkey.

Business profit: A person must have a permanent establishment or permanent representative in Turkey and income must result from business carried out in this permanent establishment or through such representatives.

Agricultural income: Agricultural activities generating income must take place in Turkey.

Wages and Salaries:

– Services must be rendered or accounted for in Turkey.

– Fees, allocations, dividends and the like paid to the chairmen, directors, auditors and liquidators of the establishment situated in Turkey must be accounted for in Turkey.

Income from Independent Personal Services: Independent personal services must be performed or accounted for in Turkey.

Income from Immovable Property:

– Immovable must be in Turkey;

– Rights considered as immovable must be used or accounted for in Turkey.

Income from Movable Capital investment: Investment of the capital must be in Turkey.

Other Income and Earnings: The activities or transactions generating for other income, specified in the Income Tax Act, must be performed or accounted for in Turkey. The term accounted for used above to clarify tax liability of the non-residents means that a payment is to be made in Turkey, or if the payment is made abroad, it is to be recorded in the books in Turkey.

Determination of Net Income:

Business Profit:

Business profit is defined as profit arising from commercial or industrial activities. Although this definition is very comprehensive and includes all types of commercial and industrial activities, the ITL excludes some activities from the contents of business profits. Generally, activities performed by tradesmen and artisans who do not have permanent establishments are not assumed as commercial and industrial activities and are exempt from income tax.

Furthermore, in order to tax income resulting from commercial and industrial activities there has to be continuity in performing these activities. In other words, incidental activities in that nature are not treated as commercial or industrial activities and therefore, the Income Tax Law deals with these activities as the other income and earnings.

The ITL does not list each commercial and industrial activity and only refers to the Turkish Commercial Law for the scope of these terms. Yet several activities are listed namely for clarification in Article 37. These are as follows:

– The operation mines, stone and time quarries, extraction of sand and pebbles operations of brick and tile kilns;

– Stock brokerage;

– Operating of private schools, hospitals and similar places;

– Regular operations of sale purchase and construction of real estate;

– Purchase and sale of securities on someone’s behalf and on a continued basis;

– Fully or partly sale of land which has been obtained by purchase or barter and subdivided within five years of its date of purchase and sold during this period or in subsequent years;

-Earnings from dental prosthesis.

Basically, the taxable income of a business enterprise is the difference between its net assets at the beginning and at the end of a calendar year.

Two method are used to compute business profits: Lump-sum basis and actual basis in the former method, the Income Tax Law specifies estimated business profits for taxpayers who are qualified for such treatment according to the relevant provisions of the Law. The main assumption is that those taxpayers specified by the Law have difficulty to keep accounting books and to determine then income on the actual basis. Therefore, their income taxes are assessed on their estimated profits determined by the Law.

In the latter method business profits is determined on the actual basis: Taxpayers are required to keep accounting books to record their actual revenues and expenses which occur within the calendar year. In general, business related expenses paid or accrued related to business are deducted from revenues:

Expenses to be deducted:

In order to determine net amount of business profits on the actual basis, the following expenses may be deducted from revenues:

– general expenses made for earning and maintaining business profit;

– food and boarding expenses provided for employees at the place of business or in its annexes;

– expenses for medical treatment and medicine;

– insurance and pension premiums;

– clothing expenses paid for employees;

– losses, damages, and indemnities paid based upon written agreements, juridical decrees, or by order of law;

– expenses for travel and lodging relevant to the business;

– expenses for vehicles which are part of the enterprise and used in the business;

– taxes in kind such as building, and consumption, stamp and municipal taxes and fees and charges, related to the business;

– depreciations set aside according to the provisions of the Tax Procedure Law;

– payments to the unions;

Payments, which are not accepted as expenses:

Those payments listed below are not considered as deductible expenses;

– funds withdrawn from the enterprise by the owner or by his spouse or children, or other assets in kind taken by them;

– monthly salaries, wages, bonuses, commissions and compensation paid to the owner of the enterprise, to his spouse, or his minor children;

– interest on the capital invested by the owner of the enterprise;

– interest based on the current account of the owner of the enterprise, his spouse, his minor children including interests on all form of receivables;

– all fines and tax penalties as well as indemnities arising from unlawful actions. Indemnities incurred as penalty clauses of contracts shall not be considered indemnities of a punitive nature;

– % 0 per cent of the advertising expenses for all kind of alcohol and alcoholic beverages, tobacco and tobacco products (current rate has been reduced to 0 percent by a Governmental Decree).

Step 4: Write a business plan

You can read on the YME platform what sort of Business Plan you need to write.

Step 5: Opening a Business Account

The company must obtain potential tax identity numbers for non-Turkish shareholders, and non-Turkish board members of the company from the relevant tax office. This potential tax identity number is necessary for opening a bank account in order to deposit the capital of the company to be incorporated.

The documents required by the tax office are as follows:

Petition requesting registration

Articles of association (one original)

Copy of the tenancy contract showing the registered address for the company

If the process is going to be followed by proxy, a power of attorney must be issued specifically showing the authority to act on behalf of the company before the tax authority in order to obtain a tax identity number or potential tax identity number.​

Bank Accounts

In the recent years the Turkish Republic has alleviated the processes to open a bank account in Turkey for foreigners with the means of some regulations in order to increase investment and make it more convenient to foreigners. These regulations will enable a foreigner who has come to Turkey for working to send easily money to his family abroad, they will enable that the daily life of a foreigner will get easier by being able to take advantage of banking processes and they will enable that the investment and company financial activities of foreigners will be realized considerably faster and many more advantages. However the opening procedures of a bank account for foreigners varies from bank to bank. While taking not long in some banks, it can be the opposite in another. Some major Turkish banks are İş Bankası (Isbank), Yapı Kredi Bankası, TEB, QNB Finansbank, Halkbank, Vakıfbank, ING Bank, Akbank, Ziraat Bankası and Garanti Bankası.

How is the Procedure ?

There are two types of opening a bank account for foreign citizens in Turkey; the first one is the procedure to open a bank account for persons and the second one is for accounts in the name of a company.

The legal procedures and principles in order to be able for a foreign citizen to open a bank account in Turkey are listed below:

First of all, the person wanting to open a bank account has to determine a correspondence address.

Foreign citizens have to own a tax number to be able to open a bank account in Turkey. The foreign citizen can get a potential tax number by visiting a state tax office with his/her within a time that depends on the density of the office.

With the tax number received from the tax office, the foreigner will be able to open a bank account and realize banking processes.

Some banks may ask for a mobile phone number of its customers. The foreign citizen needs therefore to procure a telephone number from a Turkish operator company.

The legal procedures and principles in order to be able for a foreign company to open a bank corporate account in Turkey are listed below:

Contrary to personal bank accounts, corporate accounts can only be opened by the director owning a signing authority.

A tax number needs to be procured from the tax office for the company. The company for which a bank account is to be opened, does not need to be located in Turkey or have financial activities in Turkey. It is sufficient to have a correspondence address.

In order to open an account, the competent company director applies to the bank together with the tax number and all documents of the company translated and approved by the notary or consulate. These company documents are the main company agreement, trade chamber registries, commercial register, establishment and activity documents and if available licences.

İşbank: Opening a bank account at İşbank is quick and easily. It is necessary to gather the documents below and apply to the nearest İşbank branch.

A valid passport not older than 10 years or a valid residence permit ( if both are not available, and official document approved by the Turkish Ministry of Finance validating the national ID document will be accepted)

Your Foreigner’s Identification Number or Tax Identification Number

Proof (copy of electric, water, natural gas or phone bill addressed to your name and of the last three months) of your valid residence address in Turkey or the printed address on your passport

Garantibank: Visit the branch in order to get a Mobile/Online Banking password to be able to open an account.

Akbank: Visit branch in order to open a bank account or get an online banking password or call the Akbank expat banking service.

Ziraat Bankası: In order to open a Foreign Currency Current Account or a Turkish Lira Current Account you can apply to our branches or our internet branch.

Step 6: Environmental Protection Laws and Rules and Applying for Permits

The Environmental Law and its secondary legislation regulate the protection of the environment and sanction any action which violates the rules in the legislation and may cause pollution to the environment. The Ministry of Environment and Urbanization acts as the regulatory authority through its provincial directorates. Depending on the nature and type of the activity, investors may be obliged to obtain environmental impact assessment reports and environmental licenses. Non-compliance with the Turkish environmental legislation may result in the imposition of administrative ines and civil and criminal liability

ENVIRONMENTAL PERMITS AND ASSESSMENTS 

Pursuant to the Environmental Law, environmental permits and assessments are governed by the Regulation on Environmental Permit and License and the Environmental Impact Assessment Regulation. These regulations introduce an extensive system of licenses and permits required to be obtained pursuant to the environmental legislation. 7.1.2 Environmental Impact Assessment Depending on the risk profile that the activity of an entity possesses vis-à-vis the environment, such entity may be required to obtain an environmental impact assessment report. For large-scale industrial investment, it is almost always mandatory to obtain a report analyzing whether the investment would have significant adverse effects on the environment. The report itself is not sufficient to obtain the clearance of the Ministry of the Environment and Urbanization for the implementation of the project. The applicable legislation also requires public consultation meetings and review by a special independent committee before the Ministry of Environment and Urbanization may issue an “Environment Impact Assessment Affirmative” or “Environment Impact Assessment Negative” decision. 

In the former case, the investor can proceed with the investment, subject to other necessary clearances being obtained (if any), whereas the latter restricts any future activity in connection with the investment. Moreover, for the activities subject to environmental impact assessment without getting the EIA Affirmative decision, no other public procedure such as tenders, incentives, and plan approvals could be conducted. EIA behaves like a prerequisite for whole other procedures

Environmental Permits 

Investors are obliged to obtain either a “Environmental Permit” or “Environmental Permit and License” depending on the impact of their activities on the environment. The Ministry of Environment and Urbanization issues an “Environmental Permit” in connection with air emission, environmental noise, deep sea discharge, or hazardous waste discharge from a facility. Investors have to obtain an “Environmental Permit and License” in relation to the technical sufficiency of the relevant facility. Each permit and license issued under the Environmental Law is valid for 5 years from the date of issuance and is renewable for additional 5-year periods thereafter. As a general rule, entities active in the energy, mining, construction and building materials, metal, chemical, surface coating, forest products, food, agriculture and stockbreeding, and waste management sectors and industries are required to obtain either an “Environmental Permit” or an “Environmental Permit and License”, depending on their production capacity and their discharge requirements. Even if an entity is not subject to licensing under the environmental legislation, it must still comply with the same whilst engaging in activities. 

Other Environmental Obligations 

Although most of the environmental obligations are covered by (i) Environmental Law, (ii) Environmental Permits and Licenses Regulation and (iii) Environmental Impact Assessment Regulation, other (in particular sector-specific) environmental obligations are included in other regulations. Entities should also comply with other environmental obligations with respect to the area of activities, specified in the Industrial Air Pollution Control Regulation, Regulation on Assessment and Management of Environmental Noise, Regulation on Protection of Wetlands, Waste Management Regulation, Oil Waste Control Regulation, Packaging Waste Control Regulation, the Regulation on Mitigating the Impacts and Preventing the Severe Industrial Accidents, Radiation Safety Regulation. 

SANCTIONS 

The Environmental Law introduces a strict no-fault liability regime for non-compliance with the law and polluting the environment. Polluters are liable for the loss occurred due to their actions, regardless of the degree of fault. In case of a violation, the accused company may be given a reasonable time (not exceeding 1 year) to remedy the breach failing which it may face sanctions. Although most sanctions exist in the form of an administrative ine, violating the Environmental Law and its secondary legislation may also lead to criminal liability for the polluter. For 2019, the administrative ines due to non-compliance with the Environmental Law and its secondary legislation may reach up to TRY 6,017,320 depending on the severity of the breach. Each year, applicable administrative ine is increased pursuant to a rate announced by the President

Step 7: Privacy / Personal Data Protection (Making a business website)

The General Data Protection Regulation (“GDPR”) came into force in May – as every business in Europe knows. Turkey has similar legislation, although some differences exist. Companies doing business in Turkey need to know how these laws work in practice.

Enacted in 2016, Turkish Data Protection Law (“DPL”)  is accompanied by other regulations and communiqués, while draft versions of secondary legislation have been published by Turkey’s supervisory authority, the Personal Data Protection Board (“DPB”). Under these changes, data controllers have to comply with multiple obligations when dealing with personal data, while the legislation also affects every employee, making it important for companies operating in Turkey to understand the consequences of compliance failure.

In examining the differences between DPL and GDPR, the key point is how they affect businesses operating in Turkey. Originating from EU Directive 95/46/EC, DPL features various additions and revisions. Although it contains nearly all the same fair information practice principles, DPL does not allow for a “compatible purpose” interpretation while any further processing is strictly prohibited. If data is compiled for a purpose where the subject has given consent, the controller can use it for another purpose, provided that additional specific consent is given, or if further processing is needed for what are deemed to be legitimate interests.

Grounds for processing under DPL are comparable to those which apply for GDPR, save that explicit consent is required when sensitive and non-sensitive personal data is processed – a much more time-consuming exercise. At first blush, such a burdensome obligation should give DPL a higher level of data protection than GDPR. However, DPL’s definition of explicit consent needs to be set against GDPR’s regular consent. Both require “freely given, specific and informed consent” but GDPR also provides that there has to be “unambiguous indication of the data subject’s wishes by which he or she, by a statement or by a clear affirmative action, signifies agreement to the processing of personal data relating to him or her.”

Under DPL, the cross-border transfer of personal data to a third country is similarly troublesome: the country of destination has to have sufficient protection, according to criteria decided by the DPB. Alternatively, parties must commit to provide sufficient protection that meets DPB approval. But DPL also includes the following: “In cases where interests of Turkey or the data subject will be seriously harmed, personal data shall only be transferred abroad upon the approval of the Board by obtaining the opinion of relevant public institutions and organizations.” This obliges data controllers to evaluate whether a transfer might possibly cause serious harm, and if it does, they need to obtain the DPB’s approval. However, it is unclear how such interests are to be determined. GDPR requires controllers to maintain internal records, although there is no general requirement to register with the data protection authorities, whereas DPL provides a hybrid solution, combining registration and record-keeping requirements: a registration mechanism mandating data controllers to register with a data controllers’ registry. The draft DPB regulation requires them to hand over their Personal Data Processing Inventory and Personal Data Retention and Destruction Policy to the DPB before completing their registration. For any business that is subject to both DPL and GDPR, the best way to avoid duplication of compliance effort is to formulate a flexible compliance model that satisfies the demands of regulatory authorities in multiple jurisdictions. Further Information, click here.  

Step 8: Insurance

The social security system in Turkey is predominantly similar to Bismarck model, one of four basic insurance systems which are Continental Model (Bismarck), Liberalistic Model (Beveridge), Northern European Model and Mediterranean Model. Bismarck Model refers to a system where the premiums paid over the wages of employees according to their insurance status are collected in a joint pool and the benefits are provided based on the paid premiums only when old-age pension is entitled. The amount of the benefits to be granted to the insurance holders in cases of retirement, accident and sickness varies by the income they previously had. The main actors in this system are employees, employers and representatives in public sector. This system has more regulatory measures in labor market than liberalistic system, which hinders labor market flexibility. Concordantly, strict rules and collective bargaining mechanisms have come to the fore.

Turkish Social Security System has also some elements of the Mediterranean Model as well as Bismarck Model. The Mediterranean Model is derived from the Continental Model and bears a resemblance to this model in the sense that the paid social insurance premiums provide a basis for future social security benefits. Another aspect of the Mediterranean Model similar to Turkish Model is the wideness of informal economy. For this reason, the system does not cover many people; however social risks are tried to be eliminated through family ties. This model has brought into prominence the concepts of traditional family and agricultural society; thus people are supported by their families without considering whether the state provides benefits or not in case of revenue loss or social risks.

By this reform, a number of structural changes have been made on Turkish social security system. A transition has been realized from the system which entitles various rights to different professional groups to the system which ensures the unity of standards and norms in terms of retirement insurance. Having the aim to ensure the sustainability of the system, these structural changes have not led to deviation from the Mediterranean Model-Continental Model.

Social Security Reform

Since 1990s, a number of financial problems have been experienced in Turkish social security system due to various reasons such as early retirement implementations, high rates of unregistered employment and income replacement and low rates of premium collection and earning subject to contribution. This system does not include the entire population and not have adequate safeguards against poverty. The provision of services by different social security institutions in nonsystematic way hinders the unity of norms regarding rights and obligations of employees. It became compulsory to make reforms in social security system as a result of all these problems and ageing tendency of the population which is one of the major factors affecting the financial sustainability of the system.

For the purpose of restructuring the social security system, a reform was realized in 2008 when the Law No. 5510 entered into force for seeking solutions to the prominent problems such as the existence of increasing deficit of the system and different implementations that the institutions had in the provision of health and insurance services.

The primary aim of the social security reform is to create an equitable, easily-accessible and financially sustainable social security system that provides more effective protection from poverty.

The social security reform consists of 4 complementary components:

Universal Health Insurance providing an equitable, protective and quality healthcare services for the entire population,

An aid system which enables all needers to access the services with the combination of non-contributory payments and social benefits provided disorganized,

A single retirement regime including short and long term insurance branches apart from health insurance,

A new institutional structure facilitating daily life of our citizens through modern and efficient services.

The social security reform particularly includes the regulations regarding the enhancement of the retirement system and expenses. From this point of view, a set of changes have been made on pension replacement rate, updating coefficient, number of paid premium days and age parameters and a transition period has been envisaged. As the previous rules continue to be followed until the completion of transition period, the effect of these parametric changes on social security deficit cannot be seen exactly in the short term until the 2040s.

The reforms made up to now aim at increasing the services for insurance holders as well as removing defects in the social security system. In this context, various regulations have been made in the field of both health and retirement so that insurance holders can receive services at the shortest time. A number of implementations have been put into practice to facilitate insurance holders’ access to hospital services and the relevant procedure requiring a long wait has started to be made on internet.

The primary objective in a people-oriented system is to provide services at local levels. For this reason, the system where services are provided from center has been left and Social Security Centers have been built in many districts with a view to enable insurance holders at local levels to receive services easily.

Financing of Social Security

Social security is generally financed through premiums or contributions collected from workers, employers and state around the world.

There are two ways to follow in financing social security system:

Capitalization or saving method (fund management)

Pay as you go (allocation) method

The pay-as-you-go method is used for financing social security system in Turkey. Under Turkish social security system, premiums are collected for long and short term insurance; unemployment insurance and universal health insurance. In order to lessen the effects of early retirement on national economy, social security premium is collected from pensioners who continue to work after retirement.

The following table indicates insurance branches and rate of premiums paid under these branches:

Individuals to Pay Premiums

Individuals to pay premiums vary according to the status of insurance holders:

The long and short-term insurance, universal health insurance and unemployment insurance premiums of the individuals working on service contract (workers) shall be paid to the Social Security Institution by their employers by deducting the amount equal to the rate of premium collected over total earnings from workers’ wages and adding the amount of premium to be paid by the employers.

The long and short-term insurance and universal health insurance premiums of the individuals working on own names and accounts (employers) shall be paid to the Social Security Institution by themselves.

The long-term insurance and universal health insurance premiums of civil servants shall be paid to the Social Security Institution by the Public Institution where they work by deducting the amount equal to the rate of premium collected over total earnings from civil servant’s salary and adding the amount of premium to be paid by the institution.

The long-term insurance and universal health insurance premiums of optional insurance holders shall be paid to the Social Security Institution by themselves.

Step 9: Management of human resources

Under Turkish law, labour legislation is applicable to almost all employees, regardless of the size of the employer for which they work. The most significant piece of labour legislation in Turkey is the Labour Law. Other significant pieces of legislation relating to employment matters are as follows: (i) the provisions of Article 14 of the Law No. 1475 which govern severance payments, (ii) the Labour Health and Safety Law, and (iii) Trade Union and Collective Bargaining Agreements. Moreover, the Turkish Code of Obligation includes a chapter on employment agreements, which will be applicable in cases where the above-mentioned legislation does not address the matter in question. 

EMPLOYMENT AGREEMENT

Employment agreements are treated differently than other private agreements under Turkish law. The main objective of employment agreements is to protect the employee and maintain a social balance between the employee and the employer. In order to ensure that these objectives are met, the legal rights and benefits granted to employees under the Labour Law are mandatory and cannot be excluded or altered contractually to the detriment of the employee. However, contractual arrangements which enhance the legal rights and benefits granted to employees under the Labour Law are permitted. It is mandatory to execute a written agreement should the term of the employment relationship be for one or more years. Except where a contract has not been executed, the employer shall, no later than two months after employment begins, provide a written document containing general and special terms relating to working conditions, daily or weekly working hours, remuneration and supplementary salaries, payment terms, and provisions that both the employer and the employee are required to fulfil upon termination of the agreement. Otherwise, a monetary fine may be imposed on the employer for each employee working without a written agreement. If employment agreements are not in writing, they are still valid; however, the employee may demand from the employer a document bearing his signature and stating the general and, if any, special terms of employment at any time 

Definite – Indefinite Term Employment Agreements

 Under Turkish law, employment agreements can be made for a fixed or indefinite term. An employment agreement between an employer and employee will be deemed to be for a fixed term if it is concluded in writing and any one of the following conditions exists: (i) if it is concluded for a definite term work, (ii) if its term depends on an objective condition such as completion of a certain task, or (iii) if its term is subject to the completion of a certain aim. A fixed-term employment agreement cannot be renewed more than once, save where there is a material reason which justifies renewal. If an employment agreement does not meet the above conditions, it will be considered an indefinite term employment agreement. 4.2.2 Part-time – Full-time Employment Agreements Employment agreements can stipulate whether an employee works on a part-time or full-time basis. If the weekly working hours of the employee are considerably lower than those of a full-time employee, the employment agreement is deemed to be a part-time employment agreement. Part-time employment can be for an indefinite term or fixed-term if the fixed term employment conditions referred to in the section above are met. 

For more information: Click here.

Step 10: Patents and Brands

The Turkish Patent Institute provides effective protection and widespread usage of industrial property rights ensuring that Turkish industry and technology plays a leading role in global competition. It strives to be a leading institution in the world of industrial property.

Mission

* To provide effective protection of patents, trademarks, industrial designs and other industrial property rights.

* To contribute to the development of Turkish economy and technology by encouraging creativity and innovation.

* To disseminate the awareness and knowledge of industrial property rights throughout the country and to cooperate with the related sectors.

* Providing a customer orientated, timely and high quality service to constitute an effective industrial property system by strengthening legal, technical and human infrastructure.

* To represent Turkey on international platforms and strengthen co-operation for the protection of the interests and development of the Turkish economy.

Normally, national patent applications should be filed in Turkish and a translation thereof (English, German, or French) depending on the searching authority must be supplied upon requesting the search. However, a national patent application may also be filed in English, German or French provided that an additional fee is paid for supplying the translation in Turkish within one month.

Requirements of a national patent application in Turkey

Applicants must supply the following items in order to meet the basic requirements prescribed by the law:

–    Petition of filing requesting grant of a national application,

–    a description of the invention,

–    one or more claims,

–    any drawings referred to in the description or claims,

–    an abstract,

–    payment of the official fees.

Examination stage

Official fees: Official Fee of the competent Examination Authority.

If applicant selects an examination authority who acted for the same application also as the searching authority, special discounts apply. However, searching and examination authorities are not needed to be necessarily the same.

Turkish Patent Institute applies “examination cycles” if the first examination report contains a negative opinion. Applicant is then invited to respond to the first examination report and pay again the examination fee (second cycle). If the second examination report still contains a negative opinion as to patentability, a third chance, which is actually the last chance, is given to overcome the objections in the negative report where applicant needs to pay again the examination fee (third cycle). If the third examination report does not allow any claim in the claims set, application is eventually refused. If the examination reports reference at least one claim as being patentable, application may proceed to grant based on the allowed claim(s).

Once the application is found to be allowable by the TPI, applicant is invited to pay the grant fee mentioned above in order to proceed to grant and publish the same in the official bulletin. Turkish patent applications are subject to renewal fees from the second and each subsequent year calculated from the filing date of the application. A renewal fee is due on the same day of the month containing the anniversary of the date of filing of the national patent application. If the applicant fails to do so, such renewal may still be paid within an additional term of six months with surcharge.

Failure to pay the renewal fees within the additional 6 months results in loss of rights which can only be remedied with a request for re-establishment of rights. TPI strictly applies the “all due care” criterion such that the reason for failure was caused by unforeseeable reasons and applicant has duly spent every effort for not to cause any loss of rights.

Appeal

Normally decisions of the TPI can be brought into the attention of Board of Re-examination and Evaluation acting as a kind of Board of Appeal. However, decisions pertaining to substantive issues such as patentability, generally do not deviate from the findings of the Examination Reports. Therefore, this Board mostly reviews procedural matters such as whether a procedural violation ever had occurred in the grant procedure. Decisions of this board can be appealed before the Specialized IP Courts in Ankara.

Oppositions / Third Party Observations

The current patent law does not allow post-grant oppositions to the granted patents in Turkey. As a post-grant action, third parties may only proceed with filing a lawsuit requesting nullity of the concerned patent before the competent courts.

Third party observations, however are allowed only in certain points of the grant procedure. Therefore, observations filed in other time points of the procedure have no effect at all.

First time point is that, observations can be filed within six months after publication of the search report in the official bulletin. This would have no substantial effect if the observations are not filed in two languages (i.e. Turkish and the language of the competent Examination Authority) simply because the foreign Examination Authority should be able to interpret the observations. Observations may be considered by the applicant and can be regarded as a warning pushing the said applicant to restrict the claims’ scope or even withdraw the application depending on pertinence of the cited prior art.

However, the applicant has also the chance to ignore the observations and request an unexamined patent. This request is published in the official bulletin giving a chance to third parties to request examination of the application, and along with this request, file their observations in two languages (i.e. Turkish and the language of the competent Examination Authority). As noted, examination request is made by the third parties and therefore the relevant fees must be paid by them. It should be borne in mind that there is no other chance to file observations in subsequent stages, such as in the examination procedure.

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YME Step by Step: Setting up a Business in Italy

Step 1: Choose legal form

While there are various forms of legal entity for companies in Italy, the country’s corporate law differentiates principally between limited liability companies and partnerships. We have listed the most common types of organizational entity.

Companies

There are two main types of limited liability company:

Società per azioni (S.p.A. or SpA) A joint-stock company – the approximate equivalent of a public limited company by shares – this form of entity is usually used for larger corporations, and is not always a limited liability entity. An SpA requires a minimum investment of 120,000 EUR and at least one director. Audited accounts must be filed with the local Register of Companies. There are three management options: a traditional board with one single director; a board of directors; or a management board assigned by a shareholder-elected supervisory committee.

Società a responsabilità limitata (S.r.L.) The most common format for small and medium-sized businesses, an S.r.L. is a limited liability corporation (although there are some differences between an Italian S.r.L. and the UK/US definition of a limited liability enterprise), which requires at least one shareholder and a minimum investment of 10,000 EUR. Shareholders have limited liability to the extent of their contribution.

Partnerships

There are two key forms of partnership:

Società in nome collettivo (S.n.c.) – general commercial partnership An S.n.c. requires a minimum of two partners (individuals or legal entities); all partners are general members of the partnership and hold full liability and management responsibility. No minimum set-up capital is stipulated.

Società in accomandita semplice (S.a.s.) – limited liability partnership The main conditions are the same as for a general partnership. However, at least one partner must be limited and hold limited liability to the extent of their contribution to the company. The other must be general and own full liability for the partnership’s obligations.

Step 2: Officially Register your Company with the Chamber of Commerce     

Company Registration Italy

To start economic activity, a new company must have a code that identifies that company, providing it legal and juridical existence: the “Partita IVA (the Italian equivalent of VAT number)”. The Partita IVA is provided by the “Agenzia delle Entrate (Inland revenue)” the Italian institution which controls the fiscal regulations and taxes. The Partita IVA is composed of 11 numbers, specifically, the first 7 numbers identify the name of the owner, the following 3 numbers identify the company to the “Agenzia delle Entrate” and the last number is provided for control.

For more information, click here:

Specific economic sector

When opening a new company, the most important information to give and to be aware of is the type of company. In Italy each company is identified by the ATECO code, a code provided by the Company Registrar of the local Chamber of Commerce where the company is registered. This code also contains information on the status of the company which can be active and inactive. The Italian government has created a website on which companies (who cannot find their code anymore, or start-ups that are willing to research the different official economic activities) can research the ATECO code. This website is useful also to have more technical information on the code.

Step 3: Fiscal regulation and Accountancy                                                                           

The accountancy of a company is crucial to assure its healthy development. Taking into consideration the assets, costs and taxes is important but is not always an easy task, this is why the majority of companies, rely on professional accountants. One of the keys to good accountancy is to adhere to the right fiscal regulations. In Italy we have 3 different types of fiscal regulation:

* Regime forfettario (flat regime): up to Euro 65.000,00 of income. The main characteristic of this regimen is the absence of IVA which therefore is not included in the invoices produced and neither in the invoices for purchases. It is the most suitable for Sole Traders / Freelance.

* Regime semplificato (simplified regime): inferior to Euro 400,000.00 of income. This fiscal regime is for Individual companies which have surpassed the amount of 65.000,00 Euros.

* Regime ordinario (ordinary regime): superior to Euro 400.000,00 of income. It is the most adequate for the Srl (the Italian equivalent of Ltd).

For more information Click here: https://www.partitaiva24.it/tipologie-di-regime-fiscale/

Write a business plan

Do you want to know more about writing a business plan, click here

Step 5: Opening a Business Account                                                                                          

How to open a bank account in Italy online

Moving countries comes with challenges, but as an expat, your finances shouldn’t be one of them. Opening a bank account in Italy can be simple, if you know how (hint: go online).

What are the different types of bank accounts in Italy?

Your first Italian banking decision is whether you want a resident account or a non-resident account. If you’re only going to be living in Italy for part of the year –if you’re only buying property you intend to rent there, for example – a non-resident account might be enough. But if you’re going to be spending serious time in Italy, you should consider a resident account. You don’t have to be an Italian citizen to get one – you just have to live there.

There are different types of resident accounts. Expect to encounter the following:

• Conto corrente (current account) – as in other countries, this is the standard type of account for day-to-day transactions.
• Conto corrente cointestato (joint account) – this is a current account that you share with someone else.
• Conto di risparmio (savings account) – this is for your savings, on which you can earn a little bit more interest.
• Conto di deposito (deposit account) – this is a less flexible type of savings account that might offer a higher rate of interest.

How to choose a bank account in Italy

There’s a wide range of banking institutions in Italy. There are major national and international banks based in the big cities, but further out of town you’ll find smaller local ones. What’s more, these days there are newer, digital banks to consider as well. Here are a few things to think about while you make your decision:

• How easy is it to open the account? Can you do it online?
• Will you need to visit your branch often, and is there one close to you?
• Does your bank offer services in English (or your other first language)?
• Are there any fees and what are they?

How to open a bank account in Italy

So, you know what sort of account you want and have chosen a bank. Here are our tips for opening a resident account with ease:

• Wait until you’re in Italy. It can be tempting to try to start the process from abroad, but unless you’re getting a non-resident account, this might prove difficult. Even if you don’t need to go into a branch to open the account, you will still need to provide details such as a valid Italian address. So you might just need to bide your time.
• Have your documents ready. Banks always need to be able to verify your identity, so you’ll need to show them some documents. There’s more information on what you’ll need below.
• Go to your new bank, or its website. Once you’re ready, you can begin the signup process. For traditional institutions you may well need to go into a branch, but digital banking options like N26 mean you can apply online.
• Wait for the mail to arrive. You’ll need to wait a few days to get your bank card and other information in the post – another reason it makes sense to already be in Italy!

How to open an online bank account in Italy

Traditional Italian banks can hold some surprises for foreigners. The opening hours, for example, can seem really strange: they’re usually open from early in the morning until around 1 pm, and then for just an hour or so later in the afternoon – but that’s it.

That’s just one reason why you might want a bank where you can do pretty much everything online. Another is the language barrier: some online banks provide their services in a variety of languages, so you won’t have to try to find a bank teller who happens to speak your language.

With N26, you can use it in five languages and do everything online. You can set up a full Italian bank account from your phone in minutes, without any paperwork, from the comfort of your sofa.

However is important to consider that N26 can be useful only at the start of a new business since payments in Italy may delay (despite the fact that by contract payments are due within 30 to 60 days often these can delay even more). In these cases business need the support of local physical banks which can provide Fidi Bancari (Bank Overdrafts).

How much does it cost to open a bank account in Italy?

Every bank has its own set of fees, and they can vary a lot. It’s one of the most important factors to consider when choosing an account. Fees in Italy tend to be on the high side, by European standards.

There might be an account opening fee, but the fees that’ll cost you more in the long term are the ones that you pay every month or even every transaction.

Types of bank account fees in Italy

You might face the following fees with a standard Italian account:

• Maintenance fee – this service fee could be charged regularly, for instance every month.
• Transaction fee – you might find that the bank charges you a small amount for each individual transaction that shows up on your statement. You might get a certain number free each year.
• Cash withdrawal fee – if you use an ATM (bancomat in Italian) to withdraw cash, there could be a charge, especially if you don’t use your own bank’s ATM.
• International transfer fees – this can be a big deal for expats. If you’re likely to need to send money abroad, check what your bank will charge you for this. These fees can vary hugely.

Not all banks will charge the same fees, and it’s worth considering a variety of options. Try to find an account where the fee schedule works in your favor – for example, it could be in your interest to minimize international transfer fees, or to get an account that doesn’t charge so much for withdrawing cash.

What do you need to open a bank account in Italy?

You’ll need to show your new bank some documents to prove you are who you say you are. The details can vary, but the general requirements to open a bank account in Italy are:

• ID, such as a passport.
• A valid Italian address. Most banks require proof of address, such as a utility bill, although N26 is an exception – you just need to legally be resident there.
• Your codice fiscale (tax number).
• Proof of employment (or proof that you’re studying, if you’re a student).

This is only for a resident account – for a non-resident account, as you’d expect, it’s all a little different.

At what age can you open a bank account in Italy?

You generally need to be 18 years old to open a full bank account in Italy. Anyone younger might need to get a parent or guardian involved. You can prove your age using your ID.

How much does it cost to cancel a bank account in Italy?

It sounds paranoid, but it’s worth checking up on this before you open your account. If you think you might want to close the account at some point, you should find out how easy the bank makes it, and how much it could charge you. There could be extra fees and more paperwork – the last thing you need when you should be spending your last few days in Italy eating as much gelato as possible. Relevant links N26 Bank Account(new tab)N26 Business You account

Step 6: Environmental Protection Laws and Rules and Applying for Permits             

Environmental protection

In Italy environmental protection is a very serious matter in fact the Italian legislation for environmental protection is the strictest in EU with fines and legal procedures strict and inflexible. Environmental protection is a responsibility of all companies, not only the ones active in particular fields (transportation, chemical industries, etc.) but also companies in the food industry, in agriculture, the ones that work in logistics and so on.

The regulations regarding environment take into consideration soil, water and air pollution. The actions to take of course are different depending on the type of economic activities the company carries out, and for each of this the company must obtain an Environmental Authorization, for example:

–              Authorization for sewage

–              Authorization for acoustic impact

–              Authorization for gas emissions

It is important to consider that the companies have to take into consideration national and regional guidelines regarding environmental protection, in fact each region may have ulterior regulation regarding the protection of certain particular natural resource.

For more information, click here

Step 7: Privacy / Personal Data Protection (Making a business website)       

Privacy

All Italian, and European, companies have to take into consideration the new EU GDPR regulation. According to this regulation companies have to make their clients and/or visitors of their website aware of the new regulation on privacy, this must have certain characteristics:

– Be concise

– Transparent

– Clear

– Easy to access

– Simple language (even to minors)

– Consent to privacy must be given from 14 years of age For more information, click here.

Step 8: Insurance                                                                                                                    

In Italy all the companies with employees which are active in particularly dangerous activities must subscribe a national insurance through INAIL, the National Institute for Insurance against accidents on the job. This national institute provides protection to employees against physical and economic damages caused on the job. The dangerous activities are divided into two main groups:

-activities that include the use of machinery or activities that are carried out in laboratories;

-activities that for their nature are considered dangerous, for example: construction activities, transportation, private protection, etc…

The INAIL provides the company with civic liability against accidents but does not protect the company in case it is direct responsible of the accident because it has not fulfilled all the legal requirements regarding safety on the workplace.

The cost of the insurance depends for the type of activity the company carries on; according to the legislative decree 38/2000 the activities were divided into four main categories and for each one it has established the costs to face. These categories are:

-Industry

-Craftsmanship

-Service Industry 

-other activities of different nature

All the documentation and actions needed for INAIL are complicated and require time this is why companies appoint an external expert called “Consulente del Lavoro” (Job Consultant) who will be in charge of all the relationship with the National Institute.

For more information visit the official website of INAIL

Step 9: Management of human resources                                                                             

The management of human resources is key since it sets the basis for the development of the company. Businesses have to take into consideration different regulations to provide the employees with a healthy and legal working environment. The most important regulations are:

• Provision of a legal contract and respect of basic regulations in the working environment (i.e. minimum working hours, minimum wages, etc.): the employee has to be provided with a legal and valid contract which establishes the working hours, the wages and his status. The employer is responsible for it and he/she can rely on work consultants. For more information, click here.
• Safety of the working environment: in a company the employer is responsible for assuring the safety of the working environment. Based on the type of activity and the connected risks the employer and other personnel have to undertake regularly safety courses to ensure that the employer and the employees know how to act in unsafe or medical situations.
• Each company needs to appoint a responsible for safety and a responsible for first aid.
• For more information click here.

Step 10: Patents and Brands                                                                                                           

The rights conferred by a patent for industrial inventions are territorially defined and consist of the exclusive right to work the invention and earn profit therefrom in the territory of the Italian State, within the limits of and on the conditions imposed by the law. This exclusive right is extended to the sale of the product to which the invention refers, but expires once the product is put on sale by the proprietor of the patent or with his consent, inside a member State of the European Union or the European Economic Area. If the original product is put on sale outside the European Economic Area and is then imported into it, the owner of the right can oppose this because, in this case, the right has not expired inside the European Economic Area.

When a product is manufactured using a method patented in a country where the patent title does not exist, if that product is introduced into a country where a method patent does exist, said product can be used in said country only by the owner or his successor in title of the method patent. If third parties use the product for profit in countries where the patent is protected, the owner or successor in title of the method patent can prevent such use.

The patent right does not extend, whatever the object of the invention:

• to any actions performed on private premises provided they have no commercial purpose, or attaining to experimentation;
• to the extempore preparation, in units, of medicine in chemist’s shops according to a prescription, and to the medicine thus prepared.

If a patent, in order to be executed, implies the use of inventions protected by other patent titles still in force, it cannot be executed or used without the consent of the owner or his successor in title of the previous patent title. In the same way, the owner or his successor in title of the previous patent title cannot use the subsequent patent title without the consent of the owner of the latter.

Every patent application, and consequently every patent, must have as its object only one invention, or a group of inventions connected to each other so as to form a single inventive teaching. The patent confers the following exclusive rights on the holder:

•  the subject of the invention is a product the right to forbid third parties, except with the agreement of the patent holder, from producing, using, trading in, selling or importing for such purposes the product in question into those countries where the patent is in force;
• If the object of the patent is a method, the right to forbid third parties, except with the agreement of the patent holder, from applying the method, or using, trading in, selling or importing for such purposes the product which is directly obtained by the method in question in those countries where the method patent is in force;
• In the case of a method patent, any product which is identical to the one produced by means of the patented method is presumed to have been obtained, unless proof to the contrary is provided by the third party, by means of the said patented method, according to one of the following cases:
• if the product obtained by the method is new;
• if there is a substantial probability that the identical product was made by means of the patented method and if the holder of the said patent is not able, by means of reasonable efforts, to determine the method actually followed.

In the effort to show proof to the contrary, the legitimate interest of those accused of infringement in protecting their manufacturing and commercial secrets must be respected. In other words, it must be avoided that the improper use of a method patent allows the owner, or his successor in title, to come into possession of the secrets of a competitor.

In Italy a patent for industrial inventions lasts 20 years from its filing date and is subject to the payment of annual maintenance fees, starting from the fifth year. If the deadline for payment of the annual fees is allowed to expire, a period of six months grace is given, during which it is possible to pay the annual fee due subject to a surtax.

The exclusive rights of a patent are conferred with the concession of the patent certificate. The effects of the patent come into force on the date on which the description and drawings attached to the patent application are made available to the public, or, from the moment when the content of the patent application is notified to a third party infringer. It should be clarified that the notification must include the whole content of the patent application, not only part of it.

Unless there is a specific request for advance publication, which must be presented with the patent application, the application is in any event available 18 months after the filing date. If the application has been filed first in a foreign country and then extended to Italy under international priority, namely within the convention period of 12 months from the first filing date, the application is made available upon expiry of 18 months from the first filing date.

Italian Patent Law includes the concept of prior use. This concept indicates that anyone who, during the twelve months before the date of filing of a patent application, or before the priority date, has made use in his own Company of an invention which then becomes the subject of a patent application by another party, may continue to use such invention within the limits of such prior use.

Use in one’s own Company should not be intended to mean experimentation, nor any design activity, but the real and effective use of the invention for the purposes of profit. If pre-use is invoked, it must be remembered that the filing of the subsequent patent application by the third party freezes the extension of the pre-use on the date of said filing. Any further extension is subject to the right of the patent and must be authorized by the owner of said right or by his successor in title. This entitlement may be transferred only together with the Company, or branch of the Company, in which the invention has been used. The person claiming prior use is responsible for proving such prior use and its extent.

Types of rights

The rights arising from an invention are rights of a personal nature (the moral right of the inventor, a personal and inalienable right) and of a patrimonial nature (rights which are disposable or transferable). Patrimonial rights arising from inventions can be ceded either by deeds drawn up by living persons or through death; they are also subject to forfeit, confiscation and expropriation (for debts, or in the public interest). The right to the patent belongs to the author of the invention and to his successors in title.

Requirements of patentability

In order to be patented, an invention:

• must be lawful;
• must be suitable for application in the industrial field;
• must be new;
• must not be obvious, that is, it must not be a natural evolution of the state of the art.

Lawful means that inventions which, if worked, would be against public order or morality, cannot be the object of a patent. However, the working of an invention is not considered against public order or morality simply because it is forbidden by a law or administrative regulation. Public order means the protection of public interests such as safety, security, physical integrity, tranquility and health. Morality covers the principles of moral ethics. Breeds of animal, and the essentially biological procedures followed in order to obtain them, cannot be patented either. However it should be noted that it is possible to patent microbiological procedures and also the products obtained by such procedures.

An invention is considered able to have an industrial application when the object thereof can be manufactured or used in any type of industry, including agriculture.

An invention is considered new if it is not included in the state of the art. State of the art means everything which has been made available to the public in the territory of the State or abroad, before the filing date of the patent application, by means of a written or oral description, by use, or by any other means. The state of the art is also considered to include the contents of Italian patent applications, or the contents of applications for a European or international patent which designates Italy, as they have been filed, which have a filing date earlier than that of the invention, even if they have been published or made available to the public later; this is on condition that their content is identical to that of the later patent document.

An invention is considered not obvious, and hence implying an inventive activity if, for a person of skill in the art, it is not obvious from the state of the art. The person of skill is a virtual figure who knows the state of the art at the priority date which generated the invention, who reads the prior art documents keeping in mind his scholastic knowledge and his acquired knowledge. The person of skill does not have any intuitive capacity but has a combinatory logic and the aim of his activity is to find a solution to the problem he is given. In deciding whether an activity is inventive or not, the documents comprising national applications, European applications or international applications designating Italy are not taken into consideration, when they have a filing date prior to that of the invention and have been published, or made available to the public, at a later date.

An invention, if it is to satisfy the requirement of inventive activity and be considered not obvious, must be intrinsically new. It must solve a technical problem and entail an improvement, that is, the solution of a new problem, even if it is only small, as compared to the state of the prior art in that field at that given time. The content of the invention must not be such as can be inferred from what existed beforehand, and it must entail the solution of technical and/or technological problems; therefore it must not be a mere combination of things or facts already known.

Types of inventions

Inventions can refer to a product, a device to obtain a product, or a method or a system.

Programs for processors, which are used to manage machines, plants, equipment or physical functions, such as for example road junctions, can be protected by means of a patent of invention, provided that the functions performed by the program are protected, and not for the way they are written. The protection of a program for a processor is protected for the way it is written by means of copyright. In a patent application, and therefore in a patent, several inventions can be present connected to each other, which generate autonomous and independent claims. Therefore a patent can have product claims, method claims, device claims and use claims.

They may be main inventions, if they have been conceived independently of any other invention, or derived if they employ elements of one or more earlier inventions. When an invention is dependent on a patent which is still valid and belongs to a third party, the dependent invention cannot be embodied without the authorization of the owner of the previously patented invention, and that owner cannot embody the dependent invention without the authorization of the owner of the same. There may also be:

• inventions of improvement of what is already known, whether patented or not, and such inventions are subject to the regulations for derived inventions as regards their embodiment;
• inventions of transfer when they entail a new use of something which is already known, or a previous inventive idea, by means of an original application of the same in a different field of the art and for purposes other than the original purpose;
• inventions of combination, which are those inventions realized by an intimate union or amalgamation of elements taken from something known or from earlier inventions.

Procedure

In Italy a patent application must be filed through the portal set up for the purpose by the Ministry of Economic Development.

Without authorization from the Ministry of Productive Activities, residents in Italy cannot file their applications for a patent of invention, utility model or topography exclusively at the offices of foreign states or the European Patent Office or the World Intellectual Property Office as receiving office, nor can they file them at said offices before ninety days have passed from the date of filing in Italy, or the date on which the request for authorization was presented.

Once it has been filed, a patent application is first examined to see if it affects national defence, then it is examined to see if it is formally correct, and if it meets the characteristics required by the law relating to the search report transmitted by UIBM.

In some countries third Parties are allowed to oppose the definitive grant, by filing a reasoned request within a defined period, starting from the date the patent is granted by the Patent Office of said country. With regard to specific rules, an opposition procedure can involve a dialogue between the Parties, or it may be managed autonomously by the examiner with the owner of the right. It is possible to send the claims, translated into English, to the Italian Patent and Trademark Office (UIBM), or to pay a search fee. Sending the translated claims or paying the search fee must be done at most within two months from the filing date, otherwise the application is rejected. When it receives the patent application, UIBM assigns the class and carries out a pre-filtering to eliminate those applications which are obviously unpatentable.

If the patent application is not of interest for reasons of national defence, and if it is formally correct, it is sent to the European Patent Office (EPO) which carries out a prior art search and sends to UIBM, within nine months of the filing date, a report and a preliminary opinion. In an urgent case it is possible to ask UIBM (which may reserve the right to refuse) to carry out an accelerated procedure. EPO carries out the search on the basis of the claims translated with the support of the description translated using software, if not supplied at the moment of filing. In the event of doubts regarding the search, it is possible to ask for a copy of the translation done using software. EPO may object to a lack of inventive unity and carry out the search only on a part of the patent. After receiving the search report and the preliminary opinion (which normally occurs around nine months after filing and are forwarded by UIBM), it is possible to make voluntary comments or amendments to the text within eighteen months after the filing date of the application, when all the documentation is made accessible to the public and the application is examined by the Italian examiners, who must base their examination on the search report and can use the preliminary opinion issued by EPO only for consultation. A patent subject to the new Italian procedure, which is extended as a European patent or PCT, can have the right to have part of the search fee repaid, if the claims are the same as those of the first Italian filing.

It should be noted that the PCT search report drawn up by EPO, in some foreign countries, in particular the US, is often completely reformulated.

In the case of a request for early issue, if the search is still in progress, the patent is granted without a search, and in the public file it is noted that no search has been carried out. In Italy, a fee must be paid for every claim after the tenth.

There are also countries where third parties are allowed to present an opposition to the definitive grant by presenting a proper, reasoned request within a certain period from the date of grant by the Patent Office of that country. With regard to the specific rules, an opposition procedure can involve a dialogue between the parties, or it can be managed autonomously by the examiner with the owner of the right.

The field of protection of a patent

Both in Italian and in European law, it is a fundamental principle that the field of protection of a patent is determined by the content of the claims; the description and the drawings are considered only for the purposes of interpreting the claims, and not, therefore, in terms of integration. However, it should be noted that the description and drawings support and justify the claims juridically, and the claims cannot contain features that are not present in the description and the drawings.

Since the claims define the subject matter of the protection requested, they must be clear and concise, and they must be founded in the description and in the possible diagrams or drawings; they must also be comprehensible in themselves. If there are features in the description and/or in the drawings that are not present in the claims, said features are not protected. In the same way, if there are features in the claims that are not supported by the description and/or drawings, these features cannot be used in opposition against third parties.

Claims are independent or dependent, the dependent claims are justified and supported juridically by the respective independent claim. An independent claim is a claim which reproduces the essential characteristics (the so-called “bottleneck”) of the invention for which protection is requested, and which serves to identify the subject matter of the invention. A dependent claim contains all the characteristics of the independent claims to which it is connected, and indicates other characteristics or variants for which protection is requested. It matters nothing that the dependent claim is in itself patentable with respect to the state of the art or even with respect to the independent claim to which it is connected. This is important only when the main claim which supports it is not patentable itself. In some systems, a dependent claim which is patentable in itself can be the object of a divisional application to be filed by the grant date of the main application.

In the case of infringement, protection is defined by the so-called subject matter of the invention as identified in the independent claims by the so-called person of skill in the art. It is important to note the substantive difference between inventive idea, found in the patent description, and the field protected by a granted patent found in the claims. A dependent claim is considered infringed only if the independent claim which supports and justifies the dependent claim is infringed. If, during an examination or administrative opposition, an independent claim were to be found invalid, it is possible to integrate it with one or more of the dependent claims, or by acquiring features contained in the description, thus achieving a new, valid, independent claim.

An independent claim must be read in its entirety and compared with what is considered to be interfering. During the life of a granted patent right, the claims can be voluntarily amended on condition that they remain within the limits of the content of the patent application as initially filed, and do not extend the protection conferred by the granted patent. Any amendment of the claims must entail a reduction of the field protected by the claims as granted. The amendments can be made either at UIBM, or at EPO, or in the course of a case. At UIBM the amendments must be requested before starting an active legal action and are requested when relevant prior art documents, previously unknown, become known. At EPO, or during a case, the amendments can be requested in order to overcome a possible case for annulment, due to the presence of relevant prior art documents. The amendments at EPO must be requested according to certain European legislations. In Italy, during a case, the limitations can be requested at every stage and degree of the judicial system, when the annulment of the right is requested. In some European systems, it is also possible to request amendments of the claims in the event of active actions for infringement. In Italy, the source where the material to be introduced or reformulated for the claims must be found is the description, drawings and dependent claims.

An independent claim must be read in its entirety and compared with what is deemed to interfere. The interference can be literal, when what is considered interfering can be read completely in the claim, or through equivalence. By equivalents we mean those technical means, instead of the means described in the patent at the moment of the priority date and claimed, the alternative use of which was obvious for the person of skill without having to apply a particular mental effort. Furthermore, the concept of equivalent means is also important in the examination procedure, that is, in the procedure which precedes the grant of a patent in the systems which have a prior examination to assess the relevance or irrelevance of a prior art document, or in a court of law as happens for example in Italy, to define the subject matter of the invention or its protected field. The formulation of claims for medicines provides that, when the medicine is a new product, it can also be protected as a medicine according to the protection granted to the substance.

When the product used as a medicine is in itself known, but without therapeutic characteristics, the substance or mixture of substances can be protected for specific use in a therapeutic treatment.

The protection of a patents

The protection of the exclusivity of patented inventions is both a civil and a penal matter. It concerns both patrimonial rights and the moral right of the inventor.

Judicial proceedings to protect the exclusivity right may be proceedings of ascertainment (to verify whether infringement has or has not occurred), prohibition (to prevent the continuance of the detrimental act), recovery of the damages (to obtain a fair compensation for the damage suffered as a result of the detrimental act), and also of claiming (when the ownership of a patent is in dispute). Judicial proceedings can be both active and passive. It should be remembered that it is not possible to make actions of negative ascertainment, which decide whether the product of a Company infringes a patent title of a foreigner who has no registered office or domicile in Italy.

Legal actions regarding patents for industrial inventions are characterized as movable commercial actions.

For any disputes on intellectual property beginning from 22.02.2014 and to which a foreign Company is a party, that is, “a Company, in whatever form it is incorporated, with its legal headquarters abroad, even having secondary headquarters stably representing it within Italian territory”, only nine Specialized Sections are competent, which are: Bari (for judicial offices situated in the districts of Bari, Lecce, Taranto and Potenza, Cagliari (for judicial offices situated in the districts of Cagliari and Sassari), Catania (for judicial offices situated in the districts of Caltanissetta, Catania, Catanzaro, Messina, Palermo, Reggio Calabria), Genoa (for judicial offices situated in the districts of Bologna and Genoa), Milan (for judicial offices situated in the districts of Brescia and Milan), Naples (for judicial offices situated in the districts of Campobasso, Naples and Salerno), Rome (for judicial offices situated in the districts of Ancona, Florence, L’Aquila, Perugia and Rome), Turin (for judicial offices situated in the districts of Turin) and Venice (for judicial offices situated in the districts of Trento, Bolzano, Trieste and Venice).

According to the various cases, the actions are brought before the Specialized Section where the defendant is resident or domiciled, or before the one competent for the place where the plaintiff is resident or domiciled, or before the one competent for the place where the fact occurred, or before the Specialized Section in Rome. It should be remembered that the address noted in the register of patents is taken to be the elected domicile, in order to determine the competent Court and for all notifications, both administrative and judicial. Consequently, before proceeding with any action whatsoever, it is always advisable to verify in the register of patents not only if there are registrations or notes, but also if there have been amendments to the addresses or the domicile, or again in the content of the patent. When an action is based on facts which are assumed to damage the plaintiff’s rights, this action can also be brought before the Specialized Section of the place in the district where the facts have been committed.

The burden of proving the invalidity or lapse of a patent in any case falls to whoever challenges the patent, while the burden of proving infringement falls to the holder of the patent. The owner of the rights of a patent may ask for a description or confiscation of whatever is alleged to infringe said rights. He may also request that the documents attesting or documenting the extension of the damage suffered shall be taken. The description and confiscation are carried out by a Judicial Officer, assisted when necessary by one or more experts and also by using any technical means or photographic means or any other means. The measure authorizing description and confiscation also defines the limits and the rules.

The owner of the patent rights can request temporary measures and can then ask for the manufacturing, trading and use of whatever is in infringement of the patent to be prohibited. Such a request is subject to the regulations of the Code of Civil Procedure concerning interim measures and also to the special norms of the Industrial Property Code. A request for prohibition can be made before or during the main lawsuit. When the judge decides for prohibition, he can establish a sum owed for every violation or non-observance occurring later, or for every delay in carrying out the measure.

Actions for ascertainment and negative ascertainment of validity are requested when a third party wishes to ascertain that one of his products does not infringe the specific rights of others, and where another party desires to verify the validity of the rights of others. Actions for negative ascertainment cannot be brought against third parties which do not have registered offices in Italy, unless said third parties have the patent available in Italy.

The penalties which a person who has been found to commit an infringement may incur consist of publication of the ruling, apportionment of the infringed articles to the owner of the patent as his property, the removal, deprivation or destruction of such articles, and the payment of a sum to compensate for the damage caused.

Judicial proceedings to defend one’s patent rights have a certain cost and require a certain time to reach the final judgement. The cost must be assessed taking into account the value of the infringement. The time must be assessed in the context of the extent of the infringement and the damage caused by it. There are countries where a case for infringement lasts a reasonable time, but there are also countries where a case may last 6-7 years. In the same way, there are countries where the cost of a case is reasonable, but there are countries where costs are enormous.

Protection of a patents abroad

An application for a patent can be extended abroad, under the priority procedure, within 12 months of the first filing. If the extended text substantially corresponds to the original text as filed in Italy, it has the right of priority. If new features are introduced into the text, not connected to the original ones, such new features do not enjoy the right of priority.

A patent application can also be extended outside the priority procedure, that is, within 18 months from the first filing, provided that the content of the patent application has not been made available to the public (for example by putting the object containing the inventive idea onto the market, if by examining the object it is possible to understand the inventive idea), and provided that the subject matter of the invention has not been otherwise disclosed, or on condition that third parties have not in the meantime filed an identical application. Extension abroad can be done country by country, that is, taking advantage of one of the unified procedures such as that under the European Patent Convention or the international application Convention (PCT). The PCT provides a procedure which allows to delay the moment when one has to decide in which countries to confirm a patent title. The PCT procedure must be considered a delaying procedure not a granting procedure, whereas the European Patent procedure is a granting procedure. The unified procedures should be used taking into account the times required by such procedures to reach the grant, and also the problems that can arise after the grant. Indeed it should be noted that there are few countries (e.g. Italy) which allow a case for infringement to be started before the patent title has been granted.

A grant occurring when infringement has already started can even frustrate any interest in starting a defensive action.

An extension must be considered in the same way as any other production investment. The expenses for patent protection abroad must therefore find a correspondence in a reasonable turnover, and the relative margin of contribution or in the advantage over competitors which the owner hopes to acquire. Furthermore, the protection must take into account the possibility that only in certain countries is it worthwhile starting judicial proceedings, since actions in such countries are concluded in a reasonable time and give reasonable and expected judgements. In those countries where there is no security under the law, patents should be filed only after long meditation and evaluating the commercial reasons or effective technical collaboration.

Likewise, a patent title must be abandoned as soon as it is seen that there is no real interest in terms of competitive barrier or of turnover.

When you learn how to network, it doesn’t just improve your career — it improves your personal life too. The YME Project , with help from the Kangan Institute has gathered for you the 10 best ways to network and make new connections. Don’t forget our YME YouTube event which is due April 22nd. Sign up here

1.Taking Lead

Before going to an event or a conference, figure out who is going to be there and do your research. This takes out that anxiety of feeling like you’re going to walk into the room and you have no idea what to talk about with people, instead you are going in armed and prepared for conversations and you know exactly what talking points to bring up and sometimes, you know what talking points not to bring up so you can avoid awkward conversations. What creates real relationships with people is those common interests and things that you wouldn’t even necessarily think about talking. Do your research!

2.Use Social Media

Use social media (certainly now in Corona times) to get to know your future contacts better. When you meet them in person, it will be easier for you because you will be able to refer to common interest things or previous communication.

3.Dress Professionally

Dress appropriately for that event. This does not mean that you need to wear expensive clothes, but do wear something a bit on the dressy side and leave the comfortable clothes at home.

4.Listen to Others

Listen more than you talk! Be there, present to the conversation, with the connection with the people you are talking to, so you can offer valuable insights that keep the conversation on. Listening to someone allows you to find opportunities to connect with somebody, maybe offering value to their life, or their business

5.Look People in the Eye

It is often missed and whether that’s due to a lack of confidence or personal reasons. It might keep the one you are talking to out of interest of talking. This may look like you’re disinterested in the conversation you’re having with the person in front of you, or a group.

This may also make people think that they can’t trust you. Not maintaining an eye contact might make the people you’re in contact think that you hide something, or doesn’t motivate you to talk with them.

6.Come with a Goal!

When you are going to an event, go with a goal, connecting people, learning something, discovering hobbies, etc. Anything that you can retain from that event or meeting.

Try any event, meeting, workshop etc. that matters to you! Setting a goal for anything you do will make you discover things about you.

If you connect with people at an event you can develop in the future different solutions/ opportunities for you. Business, learning, ideas, anything that might be positive for you, for developing your success.

7.Take the First Step!

A lot of people are shy, maybe you are also one of them, who knows?

People who see that you are interested in them, will cooperate with you, with your ideas. So never be too shy to meet new people. New people = New opportunities.

8.DON’T BE NEGATIVE!

Being negative will always give you a bad mood! Try to find the best aspects in your behavior, in your inner self. If you spread negativity, persons near to you can feel your energy. People will try to avoid you, nobody likes negative people.  You don’t need that, you need people around you, you need connections, as always, people = opportunities.

Positive thinking doesn’t mean that you keep your head in the sand and ignore life’s less pleasant situations. Positive thinking just means that you approach unpleasantness in a more positive and productive way. You think the best is going to happen, not the worst.

9.Talk to People you don’t know

During the event, talk to people you have met before in order to enhance your relationship, but also engage in conversation with people you do not know in order to widen your network and meet potential customers/ business partners.

10.Be able to accept Rejection

You may encounter persons who cannot or do not want to talk to you.  Persons too rude or too busy to have a conversation. You may talk to persons who do not like you or you do not like them. Maybe you will disagree on a subject important to you. Do not take it personally. It does not mean anything about you. You will not be a friend or a business partner with every person you meet, this is part of the process.

(Resource:11  Tips to Help You Network Better!, Kangan Institute)

What is Communication? How do you communicate as a young entrepreneur. The YME Project has it all spelled out for you ! Do you want to know more then read this article en join our YME YouTube event on April 22nd 2021. Don’t miss out, and sign up here !

What Is Communication ? (O3yme): Tips how to Communicate as a Young Entrepreneur

Practice Your Listening Skills (and Your Paying Attention Skills Too):

When others are speaking, are you really listening ? We often confuse ‘listening’ with ‘being quiet’ but just because you aren’t talking while others are talking doesn’t mean you’re really listening. Learn to turn off your own internal dialogue and truly tune into what others are saying. It often helps to repeat what you’ve heard so that you know you’re paying attention and they know it too.

Collaborate, Don’t Dictate:

Lectures, monologues, and ramblings don’t belong in business communications. If you find you’re speaking more than a few moments (except when giving a presentation or leading a demonstration), stop. Simplify what you’re trying to say as much as possible. Allow others to offer their input on the issue. Communication is about give and take, not dictating how things are going to be or how you think they should be.

Pay Attention to How You Spend Your Leisure Time

You probably didn’t expect this to be on the list. What do the TV shows you watch, the things you read, and your hobbies have to do with business communications? Well, the answer is twofold. First, they have the potential to expose you to new perspectives and important current events that help you grow your business intelligence. Odds are people who watch an hour of reality television daily aren’t going to be as capable of carrying a business-oriented conversation as well as those who spend their free time reading business journals and networking with successful mentors. Second, you will glean tremendously useful ideas and insights from more intellectual pursuits than from watching or reading less helpful material during your off time.

Invest in the Right Communication and Collaboration Tools:

If you’re depending on email and social media for your communications, you’re probably receiving a lot of useless and redundant information and perhaps missing out on the most important conversations. A collaborative tool like Vmoso is the ideal way to streamline communications, collaborate on important projects, and build meaningful business relationships.

Don’t Wait Too Long to Bring Up Sensitive Issues

Allowing a situation to build and fester is a recipe for a breakdown in communications. It’s much easier, effective, and more professional to address an issue as soon as it pops up, while it’s still in its infancy, than to wait until it grows into a big, ugly, angry monster. Most of the time, a quick, direct discussion can resolve any interpersonal or professional issues without negatively affecting the relationship.

Learn to Have and Use a Good People Memory

Is Sheila a morning person, or is it better to approach her with a problem later in the afternoon? Does Samuel prefer a bagel when you swing by to pick up breakfast, or is he more of a sausage biscuit kind of guy? Is it Tuesdays or Thursdays that Becky has to leave as soon as possible to get her child to his orthodontist appointment? Do these little details seem meaningless to you? People are important. When you can remember details about their personal lives, it shows that you care for them beyond their work. This fosters a deeper, more meaningful relationship that will spill easily into a better, more rewarding business relationship

What Is Communication ? (O3yme)

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Source: www.ymeproject.com / (Source: 6 Tips for Improving Your Business Communication Skills)

Below the YME Project gives you Six Marketing Tips and Tricks. These tips and tricks are taken out of the Guide for Young migrant Entrepreneurs. By the way, don’t miss out our OnLine You Tube Multiplier event on April 22nd (Sign up here)

1.Have a memorable LOGO

When you start a company, you need to make yourself known, memorable, and quick to be reminded when you see its logo! Having a memorable logo, it’s helping you getting in people’s mind, let’s check some examples:

For example – Nike’s logo; as soon as you see this “swoosh” you’ll know what brand it is, even without seeing the word “NIKE”. Or think reverse, when you think about a known brand, you’ll have its logo in your head!

2.Actions for improvement the client fidelity

We all want loyal clients, who come to us when they need something that can be found in our product range, right?

So, there are some ways where we can make them be “ours”, let’s think about discounts, “buy 2 -get 3” offers, pre-sale offers or having any little advantage than any other normal client.

3.Try to make your original research

When you want to be a reseller, provider or dealer, better have your own original research accredited by a good, known company or certifier.

Having your own research may make your clients have more trust in your brand! Think about it!

4.Invest in social media

In 2021 this is the best way to launch your brand.

We are millions of users of the internet, the social media platforms (Facebook, Instagram, YouTube, etc.). There is Google Ads, where you can directly pay to have some advertisements on different platforms. Or you can have some partnership with some influent people on the internet, this factor may impact your brand, but also may cost less/ more depending on the number of followers/ subscribers.

These years, this is the most favourable way to promote your goods. People tend to like what their idols like, making you, as a client, get impressed by their opinions and ideas.

5.Film some Ads

Make some advertisements in video format. When you see the products “working”, things may look more likeable. Video remained a popular digital marketing tactic in 2019, and it’s a must marketing strategy for this year, too. Try to include tutorials, testimonials or behind-the-scenes footage, anything that may connect you with the client.

6.Digitises UP!

Everything happens digitally now, your company has too. Make websites, phone apps, anything that can make your client get in contact with you easy and fast! Keep them in touch with you, make some online polls to see what your client needs!

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It’s very important to choose the right indicators in the evaluation of the startup: actionable indicators and not vanity indicators. For example, a supermarket can set a vanity indicator – number of customers, but an actionable indicator is the volume of revenue per day. The number of customers may increase, but they can buy considerably less in time.

Ten Tips and Tricks to be successful as an Entrepreneur

Here are our best 10 tips and tricks to help you make it as a successful entrepreneur. We have made this article with help from this blog source: https://www.santam.co.za/blog/business-advice/10-tips-for-becoming-a-successful-entrepreneur/

1. Do Solid business planning

Planning plays a crucial role in any business success. A business plan (see also previous paragraph and chapter 4) is a good place to start – defining your skills and weaknesses, what you offer, how it’s unique and how you plan on growing your offering. What’s more, try to prepare yourself mentally and practically for anything that could go wrong and how you would deal with it. For example, what happens if you get injured? What if clients pay you a month late? What if a weather disaster affects you? Or a trusted supplier goes bankrupt?

2. Prepare for Financial Challenges

Cash flow was by far their biggest challenge when starting up a business (survey Santam) https://www.santam.co.za/blog/business-advice/10-tips-for-becoming-a-successful-entrepreneur/ ). Deal with cash flow blows by saving for a month’s worth of expenses or by getting creative with how you lower your overheads. You could offer clients a discount if they pay a deposit or the full amount upfront, or even an incentive – e.g. pay 10% less if you deliver your product or service a week earlier. Whatever you do, be extremely careful of debt – this is one of the biggest killers of small business success.

3. Be Cautious – Remember you’re starting up a business

Resist the temptation to splash out on fancy offices, expensive equipment and over-the-top marketing. Your company’s livelihood depends on what’s in your wallet so every rand and cent must be triple-checked. Maintain a low overhead and manage your cash flow effectively. For one of our 1001 days survivors Jamie Pike, this meant foregoing a physical shop at first and selling his wares at a market; for design duo JesseJames it meant sharing their premises with other small businesses.

4. Ask for help!

There are loads of resources out there for networking, knowledge sharing and advice. Networking is not just for new business opportunities; it can be a wonderful source of support and fresh ideas. Attend events of your industryand regional business networks. Ask for advice from those around you (such as your intermediary, bank manager, landlord or neighbouring businesses),  or online forums and Facebook community groups in your area.

5. Put your faith in a trusted mentor

It can be a family member, former boss or colleague or even a trusted online source or blog. A mentor is an invaluable sounding board – someone who’s been where you are; someone with whom you can have regular, non-judgmental check-ins.61.9% of respondents in our survey didn’t have mentors – however those that did said that they found mentors to have a significantly positive impact on their businesses.

“My mentor pushed me beyond my biggest fears”, said one female entrepreneur who took part in our survey. “It’s not somebody who will take over”, agrees Cooked Inc’s Mariam Jakoet Harris. “It’s someone who’s going to nurture and help you.”

6. Marketing on a small budget

Marketing your new business is extremely important but doesn’t have to cost to much. Social media is your friend – creating your business page on Facebook or LinkedIn is free and will help your online search ranking. So is submitting your website URL to search engines like Google and Bing – it’s completely free.

Also keep an eye out for community Facebook groups – some will require a small advertising fee while others allow you to advertise your business on certain days of the week. The bottom line with marketing is to try anything and everything. You won’t know what will work for you until you try it.

7. Look after number one

Entrepreneurship is a lifestyle – the days of 9-to-5 are over. That’s not say that you must work yourself into the ground. Exercise regularly, eat healthily and find the time to relax or you’ll end up being less productive. Of Entrepreneurial respondents, 64% said that they had to give up precious time with their family and friends due to work responsibilities (source Santam). Working on your time management skills will help you clear enough time in your day to spend with loved ones.

8. Build a team that shares your vision

It’s simple: great people make a great company. As your business grows, you might need to hire staff. Firstly, take the time to interview people thoroughly to ensure that they fit your culture and share your values. Secondly, it can be hard to let go but it’s important to learn how to delegate tasks. Finally, don’t expect people to be your clones. Be open to new opinions and suggestions. It’s always good to get fresh perspectives on old ways of working.

9. Life Long Learning

Starting your own business is a constant process of growth and learning. It’s important to enrich yourself with both practical and emotional skills. Take a look at free or low-cost e-learning resources such as the Hubspot Academy, Udemy and Inc.edu.

Sharpen your project or time management skills, learn a new software programme or teach yourself how to run your own social media campaigns. You can also work on your management, presentation and motivational skills. If you travel a lot, podcasts and things like TED talks are great ways to inspire and educate yourself.

10. Safeguard your venture

The best entrepreneurs don’t seek risk, they seek to mitigate risk. Small business insurance is one of the best ways to look after you livelihood, and it’s more affordable than you think. Make sure that your precious stock and premises are covered in an emergency such as a fire or theft.

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A study by the Global Entrepreneurship Monitor (GEM) found that immigrants are far more likely to be entrepreneurial than people born and brought up in the UK… Three times as much in fact. Figures from the Dutch Chamber of Commerce show that one in five starters was not born in the Netherlands.

UK Stats

A new analysis from Zirra reports that, of the UK’s top 10 unicorn (valued at $1bn or more) businesses such as Shazam and Funding Circle, in nine out of the 10 businesses there is at least one immigrant or a child born to first-generation immigrants in the founding team.

Studies and analysis aside (e.g. Startups.co) shows that there are a vast number of incredibly inspiring immigrants who have moved to the UK to set up and build businesses which have driven economic growth and supported job creation.

In nine out of the 10 businesses there is at least one immigrant or a child born to first-generation immigrants in the founding team.

Zirra

In previous years, we’ve tracked the success of business moguls like London’s deputy mayor Rajesh Agrawal, the Indian immigrant who founded £1.3bn foreign exchange company RationalFX back in 2005, alongside Australian-born Alicia Navarro and her international multi-million pound affiliate marketing agency Skimlinks. So What about start-up founders? Last month we profiled London Junk founder Harsha Rathnayake and shared his rousing story of coming to the UK when he was 18 and not being able to speak any English. He would go on to learn English fluently – self-taught – and, with just £160 from his life savings, start a business that now employs 10 people and is on target to hit £1m turnover.

Immigrant Entrepreneurship does not harm Dutch Economy at all

The share of entrepreneurs who were not born in the Netherlands rose last year by a percentage point to 16 percent, ie one in six. Almost a quarter of the starters were not born in the Netherlands. Most have a business in the hospitality, logistics and construction industries. Many starting migrant entrepreneurs are located in the provinces of North and South Holland and Flevoland.

Figures from the Dutch Chamber of Commerce for 2015 show that one in five starters was not born in the Netherlands. Notable risers: entrepreneurs from Syria and Iraq. Immigrant entrepreneurship does not do the Netherlands any harm. The report The Economic Value of Ethnic Entrepreneurship shows that more than 600,000 people work in the companies of these alleged entrepreneurs. The gross added value of these companies amounts to more than 37 billion euros. Watch this great example of successful young Dutch entrepreneur:

Watch this iFly Magazine video about Omar Munie who fled from Somalia to the Netherlands with his brothers when he was just nine years old. Now, 18 years on, he is one of Holland’s most popular bag designers, and his hand-made products are sold throughout the world. One of Omar’s latest projects involves a partnership with KLM, designing a limited edition series of bags made from former KLM uniforms.

Another successful Entrepreneur is Hien Kieu. The director of Kieu Engineering from Sprang-Capelle tells how he left Vietnam in a boat with his parents’ savings as a fourteen-year-old boy. How he was one of the few immigrants to end up in a village in Brabant. Lts went without even speaking a word of Dutch. And how one teacher at that school believed in him. “I will never forget it. He asked the class: Do you know which one of your engineers will be? He is. That little Hien. “The teacher was right. And after lts, mts and hts ’that little Hien’ started in 1998 with Kieu Engineering for himself. This has now grown into a large company with seventy employees in the Netherlands and Vietnam, specialized in product development for machine construction. With clients such as Nedtrain, Tata Steel and Philips. When he opened his branch in Vietnam more than ten years ago, it was pioneering. “This was something completely new. We do not outsource production, but the labor-intensive CAD drawing work. Not only for ourselves, but also for our customers. “It was a leap of faith, but now it is starting to pay off, says Kieu. “The knowledge remains in the Netherlands. This gives our customers more time for innovation, which is good for the Netherlands, for example. “