FITA helps you find
service providers for:


flag Italy Italy: Investing

In this page: FDI in Figures | Why You Should Choose to Invest in Italy | Procedures Relative to Foreign Investment | Investment Opportunities

 

FDI in Figures

Compared to its European neighbors, Italy attracts little foreign direct investment (FDI) but nevertheless ranks 14th among global investors (UNCTAD, World Investment Report 2013).

FDI flows are highly volatile and fall and rise in reaction to the opportunities created by the crises of the Italian economy. After recovering in 2011, they have now again fallen sharply. A recovery of the FDIs is expected in 2014 if the country becomes more politically and economically stable. 

A privatization program implemented by the government and the energy sector and telecommunication markets liberalization offer interesting opportunities to investors. Italian investment abroad exceeds foreign investment in Italy. In spite of the recent reforms, various interest groups including organized crime are still heavily involved in the country's economic life. The taxation system is also an obstacle to FDI. Nevertheless, Italy is considered a very transparent country with a favorable business climate.

 

Country Comparison For the Protection of Investors

  Italy OECD United States Germany
Index of Transaction Transparency* 7.0 6.0 7.0 5.0
Index of Manager’s Responsibility** 4.0 5.0 9.0 5.0
Index of Shareholders’ Power*** 7.0 9.0 5.0
Index of Investor Protection**** 6.0 6.1 8.3 5.0

Source: Doing Business - Last Available Data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

 
Foreign Direct Investment 201120122013
FDI Inward Flow (million USD) 34,3249316,508
FDI Stock (million USD) 355,126363,624403,747
Performance Index*, Ranking on 181 Economies 97--
Potential Index**, Ranking on 177 Economies 12--
Number of Greenfield Investments*** 147120113
FDI Inwards (in % of GFCF****) 8.10.04.4
FDI Stock (in % of GDP) 16.218.119.5

Source: UNCTAD - Last Available Data.

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

Return to top

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 and slow administration processes. In average, a business needs to spend 62 days, follow 16 procedures, and pay around USD 5,000 in fees. These costs are among the highest in Europe.

Red tape and financial scandals do not encourage investments. In some regions, infrastructures are poor, especially in the south of the country.

Weak enforcement of Intellectual Property Rights is still a problem.

The presence of corruption and organised crime in some regions is an obstacle to investments.

Government Measures to Motivate or Restrict FDI
There is hardly any assistance in Italy for promoting 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, in order to facilitate 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.

Return to top

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.
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.

Learn more about Foreign Investment in Italy on Globaltrade.net, the Directory for International Trade Service Providers.

Return to top

Investment Opportunities

Investment Aid Agency
Institute for foreign trade (ICE)
Tenders, Projects and Public Procurement
Ted - Tenders Electronic daily, Business opportunities in EU 27
DgMarket, Tenders Worldwide
Other Useful Resources
Confindustria
Invitalia
 
 

Return to top

Any Comments About This Content? Report It to Us.

 

Learn more about Investing in Italy on Globaltrade.net, the Directory for International Trade Service Providers.

© Export Entreprises SA, All Rights Reserved.
Last Updates: November 2014