FDI in figures

Italy is one of 15 most important countries in the world in terms of FDI attraction. The privatization program led by the country and the energy and telecommunications markets liberalization offer interesting opportunities to investors. However, the foreign investment flow has slowed down in recent years and is expected to decline over the coming years due to the financial crisis.

No prior authorization nor notification is required for foreign investors. In effect, companies formed with foreign capital enjoy the same tax status and the same financial assistance as national companies.  However, there are exceptions: the government has the capacity to block mergers which involve foreign companies for national interest reasons or in the case where the government of a foreign country has discriminatory measures towards Italian companies. Other restrictions are for industries connected with military defense systems. The Italian anti-trust law (which applies to national and foreign investors) gives the government the right to check mergers and acquisitions that are over a certain amount.

Taking into account Italy's unfavorable budgetary situation, the authorities have rightly abstained from significant budgetary action, directing some expenses within the existing fund in order to better help domestic demand, especially private consumption. The budgetary deficit has nevertheless increased noticeably in 2009, because of the recession on receipts, and could further worsen in 2010 despite anticipated budget stabilization measures.

Why you should choose to invest in Italy

Strong points

Thanks to the State withdrawal, the market is opening up to competition in several sectors (energy, telephone, etc.). The SME grouping allows for great capacity for adaptation. Italy also has a qualified work force (technical knowledge and high quality production).
Entrepreneurs are creative and innovative.

Weak points

The procedural costs, administrative slowness, red tape and financial scandals do not encourage investments. In some regions, infrastructures are poor, especially in the south of the country.

Government measures to motivate or restrict FDI

There is hardly any assistance in Italy to promote foreign investment. This trend is reinforced by the European Union which wants Italy to harmonize its tax incentives with the Community regulations. Italy only promotes the development of its regions which are in difficulty, facilitates SME activity and job creation. The defense sector and other sectors likely to compromise public safety are not open to foreign investors.
The Italian Institute for Foreign Trade lists and makes available a guide to aids for setting up business in Italy.

Bilateral investment conventions signed by Italy

Italy has signed bilateral agreements with fifty or so countries.
To see the list of countries, click here.
To see the conventions, click here.

Procedures relative to foreign investment

Freedom of establishment

As a member of the European Union, Italy applies the principle of freedom of establishment and non-discrimination. Thus, foreign investors can carry out any type of activity in the same conditions as a local investor. In addition, no specific legal text governs foreign direct investment. The regime is in alignment with that applicable to local investment.

Acquisition of holdings

Acquiring a majority holding in the capital of a local company is authorized in Italy, except in certain sectors (petroleum exploitation).

Obligation to declare

The agency for the promotion of foreign investment in the country gives information about the authorizations necessary for setting up business.

Competent organization for the declaration

Requests for specific authorizations

Foreign investors are subject to particular measures (prior authorization issued by the competent ministry and restrictions concerning the permitted amount of equity acquisitions) in certain sectors only:
- telecommunications and the press;
- airline and shipping companies;
- electricity and gas (liberalized in 1999 and in 2000 by respective legal decrees n° 79/99 and n° 167/00);
- petroleum exploitation.
For further information, consult the ICE website.

Finding assistance for further information

Investment aid agency

Institute for foreign trade (ICE)

Other useful resources

Confindustria
Invest in Italy