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+39 02 366 38 610
Company Formation Italy



Foreign Investments in Italy

Updated on Monday 05th February 2018

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After a period in which foreign direct investments went through a period of uncertainty, the Italian economy has started recovering which led to a steadiness in terms of foreign investors setting up companies here.

Now, the Italian economy is one of the largest in the world by size, being ranked as the ninth in terms of gross domestic product and the tenth in nominal parity of purchasing power. Italy is also a country heavily oriented to foreign trade, being ranked as the ninth in the world by value of exports and the twelfth by the value of imports.

 The Italian industry is dominated by small and medium-sized enterprises, most of them implied in manufacturing or services, while large enterprises are few, phenomenon so-called industrial dualism. Italian companies have responded in part by outsourcing the production in developing countries, in part by focusing on quality production. In addition, from the late '90s Italy has begun to introduce legislation provisions in order to deregulate the labor market, making it more flexible.

Our Italian company formation agents can assist foreign investors who want to start businesses here.

 The Italian economy in numbers

 The attractiveness of the economy for foreign investments in Italy was traditionally limited, despite the country's advantages, such as a large domestic market and a skilled workforce.

The last several years have been very good for the Italian economy, as recent numbers indicate the investment flow in Italy rose to approximately 30 billion USD in 2016, and thus the country became the 15th largest foreign direct investments (FDI) recipient in the world. During the same year, Italy surpassed large economies in Europe, such as France and Spain.

At the level of 2017, Italy has become the 3rd largest Eurozone economy and is ranked among the 10 largest economies in the world thanks to foreign investments.

The most powerful investment sectors in Italy

 The main sectors which offer great investment opportunities in Italy are:

  •  - real estate, as in recent years Italians are interested in buying a second home or a holiday home and immigrants willing to remain in Italy search for real estate properties in order to settle here;
  • - tourism, which is the most profitable domain in Italy. The country is the fifth most visited country in the world, with 46.1 million of international tourists.
  • - food industry: Italy has a remarkable culinary tradition and lately surveys have shown that tourists are attracted to spend the holiday in Italy also because of the great food and specialties offer.

Our company incorporation consultants in Italy can assist investors in setting up a business in any of the industries mentioned above.

Foreign direct investment incentives in Italy

Over the years, the Italian government had created various sets of regulations which provide an attractive FDI environment. Among these are:

  • -          tax deductions for investments in research and development activities, which can reach up to 50% of the income tax;
  • -          investment grants which can reach up to 65% of the costs related to buying various assets;
  • -          tax deductions for companies employing workers on a permanent basis;
  • -          a patent box which provides for tax exemptions related to the creation of intellectual property, such as patents, know-how and trademarks;
  • -          various tax incentives for startups and innovative companies.

Several tax cuts were announced at the end of 2017 which should be enforced starting with 2018.

For full information on the legislation favoring foreign investments in Italy, please feel free to contact our local consultants.





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