Country GuideItaly

From Global Connections

According to UNCTAD's 2015 World Investment Report, Italy received foreign direct investment (FDI) inflows of USD11,451 million in 2014.

Italy ranked 45th in the World Bank's 2016 Doing Business rankings, falling one place from 44th in the year prior. The ranking recognized reforms enacted by Italy to make doing business easier in the country. Italy adopted the Jobs Act, which simplifies redundancy rules and encourages out-of-court reconciliation, reducing the time and cost for resolving labor disputes. Italy also made enforcing contracts easier by introducing a mandatory electronic filing system for court users, simplifying the rules for electronic service of process and automating the enforcement process.

Key facts about starting a business in Italy:

  • It takes approximately 5.5 days and five procedures to start a new business in Italy; this process is detailed in the Doing Business in chapter
  • There is no national minimum wage in place in Italy; employment regulations are discussed in detail in the Labor chapter
  • It takes approximately 135 days and costs EUR38,661 to obtain a building permit
  • Italy was ranked 21st in a comparison of 36 countries' intellectual property systems that assesses cost, speed, quality of judges/tribunals, quality of advice and the fairness and predictability of decisions; intellectual property rights are discussed in the Legal overview chapter
  • Companies that wish to list shares on the Borsa Italiana must, amongst other requirements, have published audited accounts for the preceding three years; this is discussed further in the Finance chapter

While investing in Italy is largely a straightforward process, it is important to understand the nuances of any local regime. The manner in which people conduct business in Italy may differ from the home countries of investors. Furthermore, variations on these distinctions may exist in different regions of Italy and the industry in which a company operates.

Italy's official language is Italian and therefore the lingua franca of business. In Italy, businesses tend to be structured with a rigid hierarchy. Italians place high importance on appearance. Business attire is typically conservative; nevertheless, this may vary across different industries.

A handshake is the typical greeting for a new introduction and business cards will be exchanged after initial introductions. Gift giving is not expected in Italian business culture.

Those looking to establish a business in Italy will often look to countries across the European Union (EU) as alternative options. While membership of the EU ensures parity in many aspects of the legal, Tax and Audit regimes, Italy can be differentiated on the following factors:

  • Italy is the fourth largest economy in the EU
  • Italy is strategically located to provide access to over 700 million potential consumers across Europe, North Africa and the Middle East
  • The Government provides incentives for the following activities: the creation of new production plants and the expansion of existing ones, investments to revive industrial areas and technology research and innovation; discussed further in the Trade chapter
  • Highly qualified workforce, with technical expertise and innovation capabilities
  • Italy is a major shipping power in the Mediterranean, with large ports at Taranto, Genoa, Trieste and Ravenna; further details in the Infrastructure chapter

Although there are many benefits of investing in Italy, foreign investors should remain aware of potential challenges. Complex bureaucracy can create difficulties in establishing and operating businesses; the Global Competitiveness Report highlighted that productivity gains are hampered by both burdensome red tape and labor market inefficiencies across the country. Furthermore, corruption is still a problem with Italy possessing the second lowest ranking of any EU country in the Corruptions Perceptions Index. It is also worth noting that the quality of infrastructure is markedly lower in the south than the industrialized northern regions.

This guide has been developed to provide businesses with an overview of Italy, its legal regime, start-up and market entry considerations, tax and customs requirements and a general summary of the factors that may affect the decision to do business in Italy. However, the information contained in this document is generic in nature and you should not act or rely on it without obtaining specific professional advice.

Please note that the Country Guides may only be available in English.

Useful Links

1 Italian Business Register
2 Italian Agency of Revenue
3 Customs Office
4 Data Protection Authority
5 Ministry of Foreign Affairs and International Cooperation
6 Industrial Property Office
7 Invitalia
8 Ministry of Labor and Social Policy

 

Download Country Guide - Italy (3.5MB, PDF)

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