Italy

Investing

FDI in figures

Between 2000 and 2006, average FDI reached about 20 billion USD. Italy is in 12th place for FDI in the European Union.

Foreign Direct Investment	2004	2005	2006
FDI of inward flow (millions USD)	16,815	19,971	39,159
FDI inward stock (millions USD)	n.c.	n.c.	294,790.0
Performance Index*, world ranking	109	112	106
Potential Index**, world ranking	28	29	n.c.
Number of Greenfield investments	130	140	138
FDI inwards (in % of GFCF)	4.7	5.5	10.2
FDI stock (in % of GDP)	n.c.	n.c.	15.9

Source: UNCTAD, World Investment Report

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.

Why you should choose Italy

Strong points: Thanks to a withdrawal by the State, the market is opening up to competition in several sectors (energy, telephone, etc.). Groups of SMEs offer a great capacity for adaptation. Italy also has a qualified work force (technical knowledge and high quality production). Businessmen are creative and innovative.
Weak points: Costs of procedures, cumbersome administration, bureaucracy and financial scandals do not encourage investment. Infrastructures are poor in some regions, especially in the south of the country.
Government measures to motivate or restrict FDI: There is little aid in Italy to favor foreign investment. This trend is reinforced by the European Union which wants Italy to harmonize its fiscal incentives with Community regulations. Italy only favors the development of its regions in difficulty, facilitates the activity of SMEs 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.

Administrative 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.