Doing Business in Italy

Country Profile

Italy is one of the founding members of the European Union and from July to December 2014 will be in charge of EU Presidency. Also, Italy in 2015 it’s going to host the next world fair: MILANO EXPO.

Italy has a diversified industrial economy. The great strength of its economy lays in its vibrant small and medium firms, specializing both in high quality consumer goods and in high tech design and engineering products, which have won gained large shares of the global market. The small size of such companies is often offset by their belonging to and working within specialized clusters.

Over the past years, Italy has been implementing structural reforms, such as lightening the high tax burden and overhauling its labor market.

With almost 60 million consumers, the Italian market offers countless opportunities to businesses in expansion.

Thanks to its strategic location in the heart of the Mediterranean, Italy is a crucial crossroads for land, sea and air routes linking the north and south of Europe.

ITATA

Official Languages Italian; two bilingual regions: Alto Adige, German and Italian; Valle d'Aosta, French and Italian
Capital City Rome
National Holidays April 25th (Liberation Day); June 2nd (Republic's Day)
Religious Holidays November 1st (All Saints); December 8th (Immaculate Conception)
Form of Government Parliamentary Republic
Administration 15 Regions and 5 autonomous Regions: Friuli-Venezia Giulia; Sardinia; Sicily; Trentino -Alto Adige; Valle d'Aosta

Gross Domestic Product (at current prices)1

EUR 1,590 billion (2012)
Exports (at current price) EUR 477 billion (2012)
Imports (at current price) es)1 EUR 483 billion (2012)
FDI Flows2 Inflows: 29,059 million USD; Outflows: 47,210 million USD (2011)
Size 301.340 km
Neighbouring Countries France, Switzerland, Austria, Slovenia; Enclaves: Holy See (Vatican City), Republic of San Marino

Population3

60,6 million inhabitants (1st January 2011)
Largest Cities3 Rome (2.7 million), Milan (1.3 million), Naples (959 thousand)
Time Zone Central European time (CET) with European daylight savings time
Currency Euro 1 € = 100 Cent
Phone Dial Code 39
Internet TLD .it
Power1 Voltage 230 V, 50 Hz
  1. Source: Eurostat
  2. Source: UNCTAD, World Investment Report, 2012
  3. Source: demo.istat.it

Why Italy

1. A strategic position in Europe and in the Mediterranean Sea

Located in the heart of the Mediterranean Sea, Italy is the main crossroads linking southern Europe to the rest of the continent.

2. Innovative clusters

Italy ranks 2° in the world for business innovation- oriented clusters

3. Manufacturing industry

Italy is the 5° manufacturing economy Worldwide and 2° in Europe

4. Market size

Italy is the 10° largest market in the world, with significant economies of scale

5. International dimension

Italy ranks 12 Worldwide on FDI ranking by source and it is one of the world's 10° leading exporting nation with almost 500 billion euros of export.

6. Value chain

Italy produces goods high on the value chain with export-oriented companies present along all the chain

7. Nature of competitive advantage

11° in terms of unique products

8. Business culture

More than 4 million entrepreneurs

9. Good position on sector

High growth potential Fashion, home furnishings, capital goods, aerospace, robotics, pharma and biotech

10. Cultural heritage

First worldwide for Unesco World Heritage sites

Investment opportunities

Countless opportunities for expanding companies

  • Around 60 million demanding and sophisticated consumers
  • A favorable geographical position in the centre of the Mediterranean Sea
  • High know-how and expertise

Doing business

New business environment

Following a thorough reform of Italian corporate law in 2003, the legal framework for companies can now be considered one of the most modern and dynamic in Europe.

Overall the 2003 reform successfully introduced:

  • Changes to the structure of commercial companies which simplify and speed up the procedures for establishing a business
  • New rules providing greater flexibility and choice in corporate governance
  • Corporate responsibility for groups clarifying issues related to liability, transparency and publicity


Our Service Kit encompasses a comprehensive Company Set-up Service (pls refer to attachment OING BUSINESS IN ITALY)

Italian Tax System - Italian Tax system reform

Over the past years, Italy has been implementing a broad reform of the Italian corporate tax system, with new amendments being introduced annually:

  • Further reduction of corporate income tax rate to 27,5% (from January 1st, 2008);
  • Partial exemption (95%, from 2008) of capital gains arising from the disposal of qualified participations into Italian and foreign corporations ("Participation Exemption");
  • Abolishment of the full imputation system on distribution of corporate profits, i.e., the dividend tax credit, and introduction of a 95% exclusion on dividend distributions;
  • Introduction of a joint taxation regime for Italian/foreign corporations belonging to the same group to consolidate their tax base if the parent company is resident in Italy;
  • Exemption of capital gains reinvested in companies in start up.

Labour market

Italian Labour Law has been subject to important changes after the Law 28 June 2012 n. 92 came into force on 18 July 2012.

Seen as a step forward, the reform gives a strong signal to foreign investors showing Italy’s willingness to exploit its enormous potential. From the first section of the Law, it is easily to identify how the domestic labour market should be: “inclusive and dynamic”.

The core points of the new Law are the following:

  • Types of contracts aim to decrease the use of temporary employment contract in favour of apprenticeship one. The latter should be seen as the main way to promote young people’s entry into the labour market.
  • Outbound flexibility, adjusting the dismissal procedures to the current economic situation.
  • Social safety system, making active labour market policies more efficient, coherent and equal.

Labour is regulated by Italy’s Constitution, Civil Code, the Workers’ Bill of Rights (Statuto dei Lavoratori), and other relevant laws and decrees. Employment terms and conditions are also periodically fixed by collective labour agreements within the various professional categories.

Living and working in Italy

Admission, work permit and residence

Business trips up to 90 days

For the purpose of business trips of up to 90 days, foreign nationals require a visa for entry into Italy. This requirement does not apply to citizens of member states of the European Union, or citizens of certain other countries

Work permits and residence (over 90 days)

  • Citizens of non-EU countries

To work in Italy, foreign nationals from outside the European Union must be in possession of a permit (nulla osta), which their future employer must apply for in advance from the Immigration Office. The Immigration Office will grant the permit on the basis of current immigration quotas established by the State.

  • Citizens of the European Union

A residence permit is no longer required for citizens of the European Union but requires simple registration as residents.

Living in Italy

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Source

Consulate General of Italy in Shanghai

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