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Italy flag Italy:

Country risk of Italy : Investment

According to the World Investment Report 2021 by UNCTAD, FDI inflows dropped sharply to USD -388 million in 2020, down from USD 18 billion in 2019. This was mostly due to the early outbreak of the COVID-19 pandemic, with Italy being the first country in Europe to be affected by the spreading of the virus (and the first one to recur to lockdowns). In the same year, the stock of FDI was about USD 486 billion. Investments are mainly directed to manufacturing, professional, scientific and technical activities, wholesale and retail trade, financial activities and insurance, and ICT. According to the latest data, the two most attractive sectors for foreign investors in 2020 were business services (13%) and software and IT services (12%) (EY). Also growing compared to one year earlier were logistics and wholesale (12%), financial services (8%) and pharmaceuticals (7%). Furthermore, of the total of 113 new projects directly financed by foreign investors in 2020, 22% were in the area of sales and marketing (EY). The main investing countries are Luxembourg (19.8%), France (18%), the Netherlands (17.1%) and the UK (13.8% - OECD statistics). According to the latest figures from OECD, in the first half of 2021 total investments to Italy stood at USD 6.7 billion, up from a negative flow of USD 4.6 billion in the same period one year earlier.

Among the reasons to invest in Italy, there is the fact that the country has one of the biggest markets in the EU, it has a diversified economy and a skilled workforce, it is one of the main manufacturing countries in the world and has good infrastructures and a strategic position, at the crossroads between Europe, Northern Africa and the Middle East. Nevertheless, high procedural and tax costs and slow administrative processes, high labour costs, regional disparities, corruption and organised crime are still among the factors that hinder investments to the country. In order to foster Italy’s attractiveness, the government created “InvestItalia”, an agency dependent on the Prime Minister which coordinates Italy’s promotion activities to attract foreign direct investments. Furthermore, the government allocated EUR 23.8 billion in 2021-2023 for the “Industry 4.0” plan aimed at improving the Italian industrial sector’s competitiveness through a mix of policy measures, tax credits, and research and infrastructure funding.  Finally, the country’s government amended the “Golden Power” law, which gives it authority to block foreign acquisitions of companies operating in strategic sectors (as happened in the 5g networks sector). Italy ranks 58th in the latest Doing Business report of the World Bank, losing seven positions compared to the previous edition.

 

Investment Opportunities

Tenders, Projects and Public Procurement
Ted - Tenders Electronic daily, Business Opportunities in the European Union
DgMarket, Tenders Worldwide
Setting Up a Company
Consult Doing Business Website, to know about procedures to start a Business in Italy
Infocamere
Useful Resources
Invitalia (National Agency for Inward Investment and Economic Development, Italian Ministry of Economy)
Italian Trade Agency
 

Business Setup Procedures

Setting Up a Company Italy OECD
Procedures (number) 7.00 5.21
Time (days) 11.00 9.47

Source: Doing Business.

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Latest Update: June 2022