www.state.gov
Open in
urlscan Pro
2600:9000:214f:2e00:1f:e8cc:9e00:93a1
Public Scan
URL:
https://www.state.gov/reports/2024-investment-climate-statements/italy/
Submission: On December 25 via api from US — Scanned from ES
Submission: On December 25 via api from US — Scanned from ES
Form analysis 2 forms found in the DOM
Name: gs — GET //findit.state.gov/search
<form id="nav__search-form" accept-charset="UTF-8" action="//findit.state.gov/search" method="get" class="nav__search-form" name="gs">
<div class="nav__search-input-wrapper">
<label id="nav__search-query-id" for="nav__search-query">Search:</label>
<input autocomplete="off" class="usagov-search-autocomplete nav__search-input ui-autocomplete-input" id="nav__search-query" name="query" type="search" placeholder="Enter your search term or phrase" aria-labelledby="nav__search-query-id">
<input id="affiliate" name="affiliate" type="hidden" value="dos_stategov">
</div>
<div class="nav__search-cta-wrapper">
<button class="icon-arrow-right link--arrow--right nav__search-cta" type="submit" form="nav__search-form">Search</button>
</div>
</form><form>
<h2 class="sz-feedback-question sz-feedback-text-align-center sz-feedback-word-wrap sz-feedback-main-font-style" id="sz-feedback-question-element">What is your overall satisfaction with this site?</h2>
<div class="sz-feedback-validation-presenter sz-feedback-hide-validation" role="alert" aria-atomic="true"></div>
<div class="sz-feedback-rating" aria-labelledby="sz-feedback-question-element" role="radiogroup"><input class="sz-feedback-rating-icon-input sz-feedback-visually-hidden" type="radio" id="sz-feedback-rating-element-0" name="sz-feedback-rating"
value="0" required=""><label class="sz-feedback-rating-icon-label" for="sz-feedback-rating-element-0"><svg focusable="false" aria-hidden="true" class="sz-feedback-rating-icon" viewBox="0 0 19.93 18.85">
<path
d="M10,4.23l1.25,2.91.41.91,1,.09,3.32.33-2.49,2.16-.75.66.25,1,.75,3.15-2.91-1.66L10,13.29l-.83.49L6.31,15.44l.75-3.23.25-1-.83-.58L4.07,8.55,7.22,8.3l1-.08.42-.91L10,4.23M10,0,7.14,6.64,0,7.22l5.4,4.65-1.58,7L10,15.2l6.23,3.65-1.66-7,5.4-4.65-7.14-.74L10,0Z">
</path>
</svg><span class="sz-feedback-rating-icon-label-text sz-feedback-visually-hidden">1 <img draggable="false" role="img" class="emoji" alt="⭐" src="https://s.w.org/images/core/emoji/15.0.3/svg/2b50.svg"></span></label><input
class="sz-feedback-rating-icon-input sz-feedback-visually-hidden" type="radio" id="sz-feedback-rating-element-1" name="sz-feedback-rating" value="1" required=""><label class="sz-feedback-rating-icon-label"
for="sz-feedback-rating-element-1"><svg focusable="false" aria-hidden="true" class="sz-feedback-rating-icon" viewBox="0 0 19.93 18.85">
<path
d="M10,4.23l1.25,2.91.41.91,1,.09,3.32.33-2.49,2.16-.75.66.25,1,.75,3.15-2.91-1.66L10,13.29l-.83.49L6.31,15.44l.75-3.23.25-1-.83-.58L4.07,8.55,7.22,8.3l1-.08.42-.91L10,4.23M10,0,7.14,6.64,0,7.22l5.4,4.65-1.58,7L10,15.2l6.23,3.65-1.66-7,5.4-4.65-7.14-.74L10,0Z">
</path>
</svg><span class="sz-feedback-rating-icon-label-text sz-feedback-visually-hidden">2 <img draggable="false" role="img" class="emoji" alt="⭐" src="https://s.w.org/images/core/emoji/15.0.3/svg/2b50.svg"></span></label><input
class="sz-feedback-rating-icon-input sz-feedback-visually-hidden" type="radio" id="sz-feedback-rating-element-2" name="sz-feedback-rating" value="2" required=""><label class="sz-feedback-rating-icon-label"
for="sz-feedback-rating-element-2"><svg focusable="false" aria-hidden="true" class="sz-feedback-rating-icon" viewBox="0 0 19.93 18.85">
<path
d="M10,4.23l1.25,2.91.41.91,1,.09,3.32.33-2.49,2.16-.75.66.25,1,.75,3.15-2.91-1.66L10,13.29l-.83.49L6.31,15.44l.75-3.23.25-1-.83-.58L4.07,8.55,7.22,8.3l1-.08.42-.91L10,4.23M10,0,7.14,6.64,0,7.22l5.4,4.65-1.58,7L10,15.2l6.23,3.65-1.66-7,5.4-4.65-7.14-.74L10,0Z">
</path>
</svg><span class="sz-feedback-rating-icon-label-text sz-feedback-visually-hidden">3 <img draggable="false" role="img" class="emoji" alt="⭐" src="https://s.w.org/images/core/emoji/15.0.3/svg/2b50.svg"></span></label><input
class="sz-feedback-rating-icon-input sz-feedback-visually-hidden" type="radio" id="sz-feedback-rating-element-3" name="sz-feedback-rating" value="3" required=""><label class="sz-feedback-rating-icon-label"
for="sz-feedback-rating-element-3"><svg focusable="false" aria-hidden="true" class="sz-feedback-rating-icon" viewBox="0 0 19.93 18.85">
<path
d="M10,4.23l1.25,2.91.41.91,1,.09,3.32.33-2.49,2.16-.75.66.25,1,.75,3.15-2.91-1.66L10,13.29l-.83.49L6.31,15.44l.75-3.23.25-1-.83-.58L4.07,8.55,7.22,8.3l1-.08.42-.91L10,4.23M10,0,7.14,6.64,0,7.22l5.4,4.65-1.58,7L10,15.2l6.23,3.65-1.66-7,5.4-4.65-7.14-.74L10,0Z">
</path>
</svg><span class="sz-feedback-rating-icon-label-text sz-feedback-visually-hidden">4 <img draggable="false" role="img" class="emoji" alt="⭐" src="https://s.w.org/images/core/emoji/15.0.3/svg/2b50.svg"></span></label><input
class="sz-feedback-rating-icon-input sz-feedback-visually-hidden" type="radio" id="sz-feedback-rating-element-4" name="sz-feedback-rating" value="4" required=""><label class="sz-feedback-rating-icon-label"
for="sz-feedback-rating-element-4"><svg focusable="false" aria-hidden="true" class="sz-feedback-rating-icon" viewBox="0 0 19.93 18.85">
<path
d="M10,4.23l1.25,2.91.41.91,1,.09,3.32.33-2.49,2.16-.75.66.25,1,.75,3.15-2.91-1.66L10,13.29l-.83.49L6.31,15.44l.75-3.23.25-1-.83-.58L4.07,8.55,7.22,8.3l1-.08.42-.91L10,4.23M10,0,7.14,6.64,0,7.22l5.4,4.65-1.58,7L10,15.2l6.23,3.65-1.66-7,5.4-4.65-7.14-.74L10,0Z">
</path>
</svg><span class="sz-feedback-rating-icon-label-text sz-feedback-visually-hidden">5 <img draggable="false" role="img" class="emoji" alt="⭐" src="https://s.w.org/images/core/emoji/15.0.3/svg/2b50.svg"></span></label></div>
<div class="sz-feedback-validation-presenter sz-feedback-hide-validation" id="sz-feedback-comment-validation" role="alert" aria-atomic="true"></div>
<div><label class="sz-feedback-label-note sz-feedback-visually-hidden" for="sz-feedback-textarea">Have feedback about our website? Note: we can’t address visa or passport issues through this box.</label></div><textarea
class="sz-feedback-textarea sz-feedback-main-font-style ignore" rows="5" placeholder="Have feedback about our website? Note: we can’t address visa or passport issues through this box." maxlength="1000" id="sz-feedback-textarea"></textarea>
<div class="sz-feedback-comment-character-counter sz-feedback-display-none"><span></span><span>/1000</span></div><button
class="sz-feedback-submit-button sz-feedback-text-align-center sz-feedback-word-wrap sz-feedback-main-font-style sz-feedback-border-radius">Submit</button>
</form>Text Content
Skip to content
An official website of the United States Government Here's how you know
Official websites use .gov
A .gov website belongs to an official government organization in the United
States.
Secure .gov websites use HTTPS
A lock ( ) or https:// means you’ve safely connected to the .gov website. Share
sensitive information only on official, secure websites.
* Newsroom
* Business
* Employees
* Job Seekers
* Students
* Travelers
* Visas
Facebook X Instagram YouTube Flickr GovDelivery
* State Department Home
* Policy Issues
* Back
* Policy Issues
Anti-Corruption and Transparency
Arms Control and Nonproliferation
Artificial Intelligence (AI)
Climate and Environment
Climate Crisis
Combating Drugs and Crime
Countering Terrorism
COVID-19 Response and Recovery
Cyber Issues
Economic Prosperity and Trade Policy
Energy
Global Health
Global Women’s Issues
Holding Russia and Belarus to Account
Human Rights and Democracy
Human Trafficking
The Ocean and Polar Affairs
Refugee and Humanitarian Assistance
Science, Technology, and Innovation
Treaties and International Agreements
United with Ukraine
* Countries & Areas
* Back
* Countries & Areas
Search for country or area
Select an Option
Search for country or area
AAfghanistanAlbaniaAlgeriaAndorraAngolaAntigua and
BarbudaArgentinaArmeniaAustraliaAustriaAzerbaijanBBahamas,
TheBahrainBangladeshBarbadosBelarusBelgiumBelizeBeninBhutanBoliviaBosnia
and HerzegovinaBotswanaBrazilBruneiBulgariaBurkina FasoBurmaBurundiCCabo
VerdeCambodiaCameroonCanadaCentral African
RepublicChadChileChinaColombiaComorosCook IslandsCosta
RicaCroatiaCubaCyprusCzechiaCôte d’IvoireDDemocratic Republic of the
CongoDenmarkDjiboutiDominicaDominican RepublicEEcuadorEgyptEl
SalvadorEquatorial
GuineaEritreaEstoniaEswatiniEthiopiaFFijiFinlandFranceGGabonGambia,
TheGeorgiaGermanyGhanaGreeceGrenadaGuatemalaGuineaGuinea-BissauGuyanaHHaitiHoly
SeeHondurasHungaryIIcelandIndiaIndonesiaIranIraqIrelandIsraelItalyJJamaicaJapanJordanKKazakhstanKenyaKiribatiKosovoKuwaitKyrgyzstanLLaosLatviaLebanonLesothoLiberiaLibyaLiechtensteinLithuaniaLuxembourgMMadagascarMalawiMalaysiaMaldivesMaliMaltaMarshall
IslandsMauritaniaMauritiusMexicoMicronesiaMoldovaMonacoMongoliaMontenegroMoroccoMozambiqueNNamibiaNauruNepalNetherlandsNew
ZealandNicaraguaNigerNigeriaNiueNorth KoreaNorth
MacedoniaNorwayOOmanPPakistanPalauPalestinian TerritoriesPanamaPapua New
GuineaParaguayPeruPhilippinesPolandPortugalQQatarRRepublic of the
CongoRomaniaRussiaRwandaSSaint Kitts and NevisSaint LuciaSaint Vincent and
the GrenadinesSamoaSan MarinoSao Tome and PrincipeSaudi
ArabiaSenegalSerbiaSeychellesSierra LeoneSingaporeSlovakiaSloveniaSolomon
IslandsSomaliaSouth AfricaSouth KoreaSouth SudanSpainSri
LankaSudanSurinameSwedenSwitzerlandSyriaTTaiwanTajikistanTanzaniaThailandTimor-LesteTogoTongaTrinidad
and TobagoTunisiaTurkey (Türkiye)TurkmenistanTuvaluUUgandaUkraineUnited
Arab EmiratesUnited
KingdomUruguayUzbekistanVVanuatuVenezuelaVietnamYYemenZZambiaZimbabwe
* Bureaus & Offices
* Back
* Bureaus & Offices
* The Secretary of State
* The Secretary of State
* The Secretary of State
* Bureau of Global Health Security and Diplomacy
* Bureau of Intelligence and Research
* Bureau of Legislative Affairs
* Counselor of the Department
* Executive Secretariat
* Office of the Chief of Protocol
* Office of Civil Rights
* Office of Diversity and Inclusion
* Office of Global Women’s Issues
* Office of the AUKUS Senior Advisor
* Office of the Legal Adviser
* Office of the Ombuds
* Office of the Special Envoy for Critical and Emerging Technology
* Office of the U.S. Special Coordinator for the Partnership for Global
Infrastructure and Investment
* Office of the U.S. Special Presidential Envoy for Climate
* Policy Planning Staff
* Special Envoy for Iran
* Special Presidential Envoy for Hostage Affairs
* Special Representative for Syria Engagement
* Special Representative for Venezuela
* U.S. Security Coordinator for Israel and the Palestinian Authority
* Deputy Secretaries of State
* Deputy Secretaries of State
* Deputy Secretary of State
* Bureau of Cyberspace and Digital Policy
* Office of the Ambassador-at-Large for Arctic Affairs
* Deputy Secretary of State for Management and Resources
* Office of Foreign Assistance
* Office of Small and Disadvantaged Business Utilization
* Arms Control and International Security
* Arms Control and International Security
* Under Secretary for Arms Control and International Security
* Bureau of Arms Control, Deterrence, and Stability
* Bureau of International Security and Nonproliferation
* Bureau of Political-Military Affairs
* Civilian Security, Democracy, and Human Rights
* Civilian Security, Democracy, and Human Rights
* Under Secretary for Civilian Security, Democracy, and Human Rights
* Bureau of Conflict and Stabilization Operations
* Bureau of Democracy, Human Rights, and Labor
* Bureau of International Narcotics and Law Enforcement Affairs
* Bureau of Population, Refugees, and Migration
* Office of Global Criminal Justice
* Office of International Religious Freedom
* Office of the Special Envoy To Monitor and Combat Antisemitism
* Office of the U.S. Special Coordinator for Tibetan Issues
* Office to Monitor and Combat Trafficking in Persons
* Economic Growth, Energy, and Environment
* Economic Growth, Energy, and Environment
* Under Secretary for Economic Growth, Energy, and the Environment
* Bureau of Economic and Business Affairs
* Bureau of Energy Resources
* Bureau of Oceans and International Environmental and Scientific
Affairs
* Office of Global Food Security
* Office of Global Partnerships
* Office of the Chief Economist
* Office of the Science and Technology Adviser
* Subnational Diplomacy Unit
* Management
* Management
* Under Secretary for Management
* Bureau of Administration
* Bureau of Budget and Planning
* Bureau of the Comptroller and Global Financial Services
* Bureau of Consular Affairs
* Bureau of Diplomatic Security
* Bureau of Diplomatic Technology
* Bureau of Global Talent Management
* Bureau of Medical Services
* Bureau of Overseas Buildings Operations
* Director of Diplomatic Reception Rooms
* Foreign Service Institute
* Office of Foreign Missions
* Office of Management Strategy and Solutions
* Political Affairs
* Political Affairs
* Under Secretary for Political Affairs
* Bureau of African Affairs
* Bureau of Counterterrorism
* Bureau of East Asian and Pacific Affairs
* Bureau of European and Eurasian Affairs
* Bureau of International Organization Affairs
* Bureau of Near Eastern Affairs
* Bureau of South and Central Asian Affairs
* Bureau of Western Hemisphere Affairs
* Public Diplomacy and Public Affairs
* Public Diplomacy and Public Affairs
* Under Secretary for Public Diplomacy
* Educational and Cultural Affairs
* Expo Unit
* Global Public Affairs
* Office of Global Youth Issues
* Policy, Planning, and Resources
* U.S. Advisory Commission on Public Diplomacy
* About
* Back
* About
Mission
About the U.S. Department of State
Joint Strategic Plan
Equity Action Plan
Foreign Affairs Manual and Handbook
Department of State by State Map
DipNote Blog
Domestic Impact
We Are the U.S. Department of State
History
Previous Administration Archives
Foreign Relations of the United States
National Museum of American Diplomacy
Art in Embassies
Administrative
Department Reports and Publications
Agency Financial Reports
Form Finder
Organization Chart
Plans, Performance, Budget
Evidence, Evaluation, and Learning
Information Quality Act
Open Government Initiative
Data Informed Diplomacy
Digital Government Strategy
Plain Writing Program
Partner with State
Leadership
The Secretary of State
Deputy Secretary of State
Deputy Secretary of State for Management and Resources
Biographies of Senior Officials
Directories
Contact Us
Telephone Directory
U.S. Ambassadors
U.S. Embassies and Other Posts
Country Offices Directory
Key Officers of Foreign Service Posts
Diplomats in Residence
* Menu
* State Department Home
* search
Search:
Search
Close
HomeReportsBureau of Economic and Business Affairs2024 Investment Climate
Statements…Italy
hide
2024 INVESTMENT CLIMATE STATEMENTS: ITALY
In this section /
EXECUTIVE SUMMARY
1. EXECUTIVE SUMMARY
2. 1. Openness To, and Restrictions Upon, Foreign Investment
1. Policies Towards Foreign Direct Investment
2. Limits on Foreign Control and Right to Private Ownership and
Establishment
3. Other Investment Policy Reviews
4. Business Facilitation
5. Outward Investment
3. 2. Bilateral Investment and Taxation Treaties
4. 3. Legal Regime
1. Transparency of the Regulatory System
2. International Regulatory Considerations
3. Legal System and Judicial Independence
4. Laws and Regulations on Foreign Direct Investment
5. Competition and Antitrust Laws
6. Expropriation and Compensation
7. Dispute Settlement
1. ICSID Convention and New York Convention
2. Investor-State Dispute Settlement
3. International Commercial Arbitration and Foreign Courts
8. Bankruptcy Regulations
5. 4. Industrial Policies
1. Investment Incentives
2. Foreign Trade Zones/Free Ports/Trade Facilitation
3. Performance and Data Localization Requirements
6. 5. Protection of Property Rights
1. Real Property
2. Intellectual Property Rights
7. 6. Financial Sector
1. Capital Markets and Portfolio Investment
2. Money and Banking System
3. Foreign Exchange and Remittances
1. Foreign Exchange
2. Remittance Policies
4. Sovereign Wealth Funds
8. 7. State-Owned Enterprises
1. Privatization Program
9. 8. Responsible Business Conduct
1. Additional Resources
2. Climate Issues
10. 9. Corruption
1. Resources to Report Corruption
11. 10. Political and Security Environment
12. 11. Labor Policies and Practices
13. 12. U.S. International Development Finance Corporation (DFC), and Other
Investment Insurance or Development Finance Programs
14. 13. Foreign Direct Investment Statistics
15. 14. Contact for More Information
EXECUTIVE SUMMARY
*A translation of the 2023 Investment Climate Statement for Italy is available
at: https://it.usembassy.gov/investment-climate-statements-2023/
*Su questo sito è disponibile la traduzione in italiano dell’Investment Climate
Statement 2023 per l’Italia:
https://it.usembassy.gov/investment-climate-statements-2023/
Italy’s economy, the eighth largest in the world and the third largest in the
EU, is globally competitive in the areas of business and financial services,
agricultural and food production, fashion, design, tourism, and industrial
production, including of vehicles and ships. Italy’s economy overall has proven
resilient, but GDP growth declined from 4.0 percent in 2022 to 0.9 percent
in 2023 and the consensus forecast for 2024 is a deceleration to 0.7 percent.
Factors weighing on private consumption and investment include inflation, which
erodes real wage growth, tightening financial conditions, and the phasing out of
measures adopted to mitigate the energy crisis induced by Russia’s war of
aggression against Ukraine. Robust growth in the construction sector, which
benefited from tax credits for eco-friendly renovation projects, as well as
rebounds of the tourism and services sectors, helped drive a post-COVID
expansion in 2022. Italy’s public debt to GDP ratio was 141.7 percent as of
2022, a decrease from 155 percent in 2020; the government projects it will
continue to trend downward.
Italy’s National Recovery and Resilience Plan (NRRP), which runs from 2021-2026,
is funded by over €200 ($217) billion from EU funds to accelerate digital and
green transitions and wide-ranging reforms addressing the Italian economy’s
longstanding growth constraints – including a slow legal system, inefficient
bureaucracy, and barriers to market competition – while promoting policies to
address gender, youth, and regional disparities. To date, Italy has received
€102 ($111) billion in EU grants and loans as part of the NRRP. Further
disbursements will be dependent on Italy’s achievement of EU-agreed milestones
and targets. The government has had difficulty, however, in spending the funds
as quickly as planned due to a lack of administrative capacity, which is a
systemic weakness the NRRP seeks to address through reforms of public
administration. For U.S. investors, judicial reform, and bureaucratic
streamlining would reduce investment uncertainty and create a more favorable
investment climate.
Italy is and will remain an attractive destination for foreign investment, with
one of the largest markets in the EU, a diversified economy, and a skilled
workforce. Italy’s economy is dominated by small and medium-sized enterprises
(SMEs), defined as firms with less than 250 employees. SMEs comprise 99.9
percent of Italian businesses. Italy’s relatively affluent domestic market,
access to the European Common Market, proximity to emerging economies in North
Africa and the Middle East, and centers of excellence in scientific and
information technology research, remain attractive to investors. The clustering
of industry, infrastructure, and quality of life are also among the top reasons
international businesses choose Italy for new investments or expansion in the
EU.
According to Italy’s Institute of Statistics, in 2021, more than 17,600 foreign
multinationals employed nearly 1.7 million individuals. While representing only
0.4 percent of all Italian companies, foreign-owned companies employ 9.4 percent
of employees, produce 20.3 percent of total sales, provide 17.1 percent of added
value, and spend 32.7 percent of research-and-development expenditures.
U.S.-controlled companies are the largest foreign investors, employing over
333,000 individuals and accounting for 19.1 percent of sales, 20.1 percent of
added value, and 23.7 percent of research and development expenditures. Exports
of pharmaceutical products, industrial machinery and machine tools, electrical
appliances, automobiles, and auto parts, as well as food and wine,
textiles/fashion, and furniture, are an important source of revenue. Sectors
which have attracted significant foreign investment include manufacturing,
telecommunications, energy, and pharmaceuticals. The government generally
remains open to foreign investment in shares of Italian companies and continues
to make information available online to prospective investors.
Table 1: Key Metrics and Rankings Measure Year Index/Rank Website Address TI
Corruption Perceptions Index 2023 42 of 180
https://www.transparency.org/en/cpi/2023/ Global Innovation Index 2023 26 of
132 https://www.wipo.int/global_innovation_index/en/2023/ U.S. FDI in partner
country ($M USD, historical stock positions) 2022 $26,107
https://apps.bea.gov/international/factsheet World Bank GNI per capita 2022
$38,200 http://data.worldbank.org/indicator/NY.GNP.PCAP.CD
1. OPENNESS TO, AND RESTRICTIONS UPON, FOREIGN INVESTMENT
POLICIES TOWARDS FOREIGN DIRECT INVESTMENT
Italy is an open economy and welcomes foreign direct investment (FDI). As an EU
member state, Italy is bound by the EU’s treaties and laws. Under EU treaties
with the United States, as well as OECD commitments, Italy is generally obliged
to provide national treatment to U.S. investors established in Italy or in
another EU member state.
EU and Italian antitrust laws provide Italian authorities with the right to
review mergers and acquisitions for market dominance. In addition, the Italian
government may block or apply conditions to mergers and acquisitions involving
foreign firms under its investment-screening authority if the proposed
transactions raise national security concerns.
The Italian government’s foreign investment and procurement screening law is
commonly referred to as “the Golden Power law.” Enacted in 2012 and further
implemented through follow-on legislation in 2015, 2017, 2019, 2020, and 2022,
the Golden Power law allows the government to block foreign acquisition of
companies operating in strategic sectors: defense/national security, energy,
transportation, telecommunications including 5G and cloud computing, critical
infrastructure, sensitive technology, and nuclear and space technology. The
April 2020 Liquidity Decree issued by the Prime Minister’s Office to protect
Italian companies from hostile takeovers in light of the pandemic strengthened
Italy’s investment-screening authority to cover all sectors outlined in the EU’s
March 2019 foreign direct investment screening directive, which covers: (1)
critical infrastructure, physical or virtual, including energy, transport,
water, health, communications, media, data processing or storage, aerospace,
defense, electoral or financial infrastructure, and sensitive facilities, as
well as land and real estate; (2) critical technologies and dual-use items,
including artificial intelligence, robotics, semiconductors, cybersecurity,
aerospace, defense, energy storage, quantum and nuclear technologies, and
nanotechnologies and biotechnologies; (3) supply of critical inputs, including
food security, energy, and raw materials; (4) access to sensitive information;
and (5) freedom of the media. The EU decree also expanded Golden Power review to
EU-based investors and gives the government new authorities to investigate
non-notified transactions.
Embedded in a broader decree issued March 2022, the government revised the
Golden Power investment-screening authority to reflect its effort to adapt to
both rapid developments in technology and recent shifts in the geopolitical
landscape. The 2022 revision included three modifications: the first enlarged
Golden Power’s scope to capture emerging and critical htechnology, including
cloud-based activities of strategic importance to the national defense and
security system; the second required companies submit to the Golden Power
committee for approval annual procurement plans; and the third empowered a
ten-expert committee to carry out investigations to monitor compliance, and
established strict penalties and enforcement mechanisms for non-compliance. In
December 2022, the government decreed that firms negatively affected by a Golden
Power decision made based on national security can apply for compensatory
measures.
Golden Power review has affected recent transactions involving U.S. firms and
those based within the EU. U.S. investors considering transactions that would
entail Golden Power screening review are encouraged to engage local counsel with
knowledge of the process early and consult with the Commercial and Economic
Affairs offices of the Embassy prior to notification.
The Italian Trade Agency (ITA) is responsible for attracting foreign investment
as well as promoting foreign trade and Italian exports. ITA operates under the
coordination of the Ministry of Enterprise and Made in Italy (formerly the
Ministry of Economic Development) and the Ministry of Foreign Affairs through a
network of 79 offices in 65 countries. ITA promotes foreign investment in Italy
through the Invest in Italy program: h ttp://www.investinitaly.com/en/ . The
Foreign Investments Attraction Department is a dedicated unit of ITA for
facilitating the establishment and the development of foreign companies in
Italy. The department’s main activities are promoting business opportunities,
helping foreign investors to establish or expand their operations, supporting
investors throughout the investment life cycle, and offering high-level
consulting services for existing strategic investments.
While not directly responsible for attracting investment, SACE (Italy’s
export-credit agency) has additional responsibility for guaranteeing certain
domestic investments. For foreign investors, particularly in energy and
infrastructure projects, SACE’s project guarantees and insurance may provide a
further incentive to invest in Italy. Additionally, Invitalia is the national
agency for inward investment and economic development within the Italian
Ministry of Economy and Finance. The agency focuses on strategic sectors for
development and employment. Invitalia finances projects both large and small,
targeting entrepreneurs with concrete development plans, especially in
innovative and high-value-added sectors. For more information, see
https://www.invitalia.it/eng . Italy’s main business association (Confindustria)
also helps companies in Italy: https://www.confindustria.it/en .
LIMITS ON FOREIGN CONTROL AND RIGHT TO PRIVATE OWNERSHIP AND ESTABLISHMENT
EU and Italian antitrust laws also provide national authorities with the right
to review mergers and acquisitions over a certain financial threshold. Further,
the Italian government may block mergers and acquisitions involving foreign
firms to protect the national strategic interest or in retaliation if the
government of the country where the foreign firm is based applies discriminatory
measures against Italian firms.
OTHER INVESTMENT POLICY REVIEWS
The UN Working Group on Business and Human Rights conducted a visit to Italy in
2021. In its report, the Working Group stated it “was encouraged by ongoing
efforts to advance responsible business conduct and to address remaining gaps,
particularly in relation to preventing and addressing serious abuses suffered by
migrant workers in the agricultural and other sectors. However, numerous
challenges remain in the need to address the root causes of such abuses, unsafe
working conditions across supply chains, and how to hold businesses to account.
The Working Group also observed efforts by the government to find a balanced
approach towards industrial-economic development, the protection of human rights
and the environment and noted that meaningful participation of affected
communities in environmental decisions remains insufficient, which also hampers
efforts to ensure inclusive transition to a green economy as well as social and
environmental accountability.” In its response, the government expressed “wide
appreciation for the fruitful collaboration and the outcomes of the visit” and
stated, “Italy is committed to turn into action all planned measures and
commitments included in the second National Action Plan on Business and Human
Rights, which have been complemented by some ones directly suggested by the UN
Working Group during the visit.” The report is available at:
https://undocs.org/A/HRC/50/40/Add.2 and Italy’s response is available at:
https://undocs.org/A/HRC/50/G/11 .
BUSINESS FACILITATION
Italy has a business registration website, available in Italian and English,
administered through the Union of Italian Chambers of Commerce:
http://www.registroimprese.it. The online business-registration process is
clear and complete, and available to foreign companies. Before registering a
company online, applicants must obtain a certified e-mail address and digital
signature, a process that may take up to five days. A notary is required to
certify the documentation. The precise steps required for the registration
process depend on the type of business being registered. The minimum capital
requirement also varies by type of business. Generally, companies must obtain a
value-added tax account number (partita IVA) from the Italian Revenue Agency;
register with the social security agency (Istituto Nazionale della Previdenza
Sociale – INPS); verify adequate capital and insurance coverage with the Italian
workers’ compensation agency (Istituto Nazionale per l’Assicurazione contro gli
Infortuni sul Lavoro – INAIL); and notify the regional office of the Ministry of
Labor. Additional licenses may be required, depending on the type of business to
be conducted. Invitalia and the Italian Trade Agency’s Foreign Direct Investment
Unit assist those wanting to set up a new business in Italy. Many Italian
localities also have one-stop shops to serve as a single point of contact for,
and provide advice to, potential investors on applying for necessary licenses
and authorizations at both the local and national level. These services are
available to all investors.
OUTWARD INVESTMENT
Italy neither promotes, restricts, nor incentivizes outward investment, nor
restricts domestic investors from investing abroad.
2. BILATERAL INVESTMENT AND TAXATION TREATIES
Italy does not have a bilateral investment treaty (BIT) with the United States.
https://www.state.gov/investment-affairs/bilateral-investment-treaties-and-related-agreements/united-states-bilateral-investment-treaties/.
A list of all countries with which Italy currently has bilateral investment
treaties is available at the following website:
http://investmentpolicyhub.unctad.org/IIA/CountryBits/103 .
Italy has not ratified a BIT since 2009 and has not negotiated a BIT since 2014.
Since 2009, investment-treaty negotiations fall within the competence of the EU:
http://ec.europa.eu/trade/policy/accessing-markets/investment/ .
Likewise, Italy’s FTA negotiations are handled at the EU level:
http://ec.europa.eu/trade/policy/ .
Italy shares a bilateral taxation treaty with the United States. The text of the
treaty is available at:
https://www.irs.gov/businesses/international-businesses/united-states-income-tax-treaties-a-to-z .
Italy is a member of the OECD Inclusive Framework on Base Erosion and Profit
Shifting and is party to the Inclusive Framework’s October 2021 deal on the
two-pillar solution to global tax challenges, including a global minimum
corporate tax.
3. LEGAL REGIME
TRANSPARENCY OF THE REGULATORY SYSTEM
Regulatory authority exists at the national, regional, and municipal level. All
applicable regulations could be relevant for foreign investors. The government
and individual ministries, as well as independent regulatory authorities,
develop regulations at the national level. Regional and municipal authorities
issue regulations at the sub-national level. Draft regulations may be posted
for public comment, but there is generally no requirement to do so. Final
national-level regulations generally are published in the Gazzetta Ufficiale
(and only become effective upon publication). Regulatory agencies may publish
summaries of received comments. In Italy, private companies are not required to
obtain an Environmental Product Declaration (EPD) – an
internationally-recognized certificate on the environmental impact of their
products or services – but an increasing number of companies apply and disclose
it voluntarily. EU ecolabel licenses were first introduced in Italy in 1998. As
of September 2023, Italy ranked first in Europe for number of EU ecolabeling
licenses, with 18 percent of the total. Currently in Italy, there are 464 EU
ecolabel licenses covering 14,138 products. As of February 2023, the product
group with the largest number of licenses was “cleaning services” with 148
licenses followed by “tourist accommodation services” with 64 licenses.
Aggrieved parties may challenge regulations in court. Public finances and debt
obligations are transparent and are publicly available through banking channels
such as the Bank of Italy (BOI).
INTERNATIONAL REGULATORY CONSIDERATIONS
Italy is a founding member of the EU. EU directives are brought into force in
Italy through implementing national legislation. In some areas, EU procedures
require member states to notify the European Commission (EC) before implementing
national-level regulations. Italy on occasion has failed to notify the EC and/or
the World Trade Organization (WTO) of draft regulations in a timely way. For
example, in 2017 Italy adopted country-of-origin labelling (COOL) measures for
milk and milk products, rice, durum wheat, and tomato-based products. Italy’s
Ministers of Agriculture and Economic Development publicly stated these measures
would support the “Made in Italy” brand and make Italian products more
competitive. Though the requirements were widely regarded as a technical barrier
to trade (TBT), Italy failed to notify the WTO in advance of implementing these
regulations. On December 22, 2023, the Italian Ministers of Agriculture, Food
Sovereignty, and Forests, Health, and Enterprises and Made in Italy signed a
decree to extend the validity of country-of-origin labeling (“COOL”) measures
for durum wheat, rice, pork meat, tomatoes, and dairy products until December
31, 2024. Italy is a signatory to the WTO’s Trade Facilitation Agreement (TFA)
and has implemented all developed-country obligations.
LEGAL SYSTEM AND JUDICIAL INDEPENDENCE
Italian law is based on Roman law and on the French Napoleonic code. The Italian
judicial system consists of a series of courts and a body of judges employed as
civil servants. The system is unified; every court is part of the national
network. Though notoriously slow, the Italian civil legal system meets the
generally recognized principles of international law, with provisions for
enforcing property and contractual rights. Italy has a written and consistently
applied commercial and bankruptcy law. Foreign investors in Italy can choose
among different means of alternate dispute resolution (ADR), including legally
binding arbitration, though use of ADR remains rare. The GOI in recent years has
introduced justice reforms to reduce the backlog of civil cases and speed new
cases to conclusion. These reforms also included a digitization of procedures,
and a new emphasis on ADR. Judicial-sector reform is a significant pillar of
Italy’s National Recovery and Resilience Program. Regulations can be appealed in
the court system.
LAWS AND REGULATIONS ON FOREIGN DIRECT INVESTMENT
Italy is bound by EU laws on FDI.
COMPETITION AND ANTITRUST LAWS
The Italian Competition Authority (AGCM) is responsible for reviewing
transactions for competition-related concerns. AGCM may examine transactions
that restrict competition in Italy as well as in the broader EU market. As a
member of the EU, Italy is also subject to interventions by the European
Commission Competition Directorate (DG COMP). Companies can challenge AGCM
decisions before the Lazio Regional Administrative Court. Regional
administrative court decisions can be appealed to the Council of State.
In November 2021, AGCM fined Amazon and Apple $225 million for alleged
anti-competitive cooperation in the resale of Apple and Beats products. In
October 2022, the Lazio Regional administrative court cancelled the fine citing
administrative process. In December 2021, AGCM fined Amazon $1.3 billion for
abuse of market dominance, one of the biggest penalties imposed on a U.S.
technology company in Europe. AGCM alleged Amazon granted benefits and higher
site visibility to users (sellers) of Amazon’s warehouse and delivery service,
thereby harming competitor delivery services. In addition to the fine, AGCM
ordered Amazon “to grant sales benefits and visibility on Amazon.it to all
third-party sellers which are able to comply with fair and non-discriminatory
standards for the fulfillment of their orders.” AGCM alleged Amazon unfairly
imposed stringent performance metrics on sellers not using Amazon delivery
services, which can lead to account suspension. Amazon appealed to the Lazio
Regional administrative court to annul the fine. In October 2022, the Lazio
Regional administrative court said it had suspended judgment pending a ruling by
the European Union Court of Justice over the case. In March 2024, AGCM launched
an investigation of the Italian subsidiary of Booking Holdings for abuse of
market position.
EXPROPRIATION AND COMPENSATION
The Italian constitution permits expropriation of private property for “public
purposes,” defined as essential services (including during national health
emergencies) or measures indispensable for the national economy, with fair and
timely compensation.
DISPUTE SETTLEMENT
ICSID CONVENTION AND NEW YORK CONVENTION
Italy is a member state of the World Bank’s International Centre for the
Settlement of Investment Disputes (ICSID convention). Italy has signed and
ratified the Convention on the Recognition and Enforcement of Foreign Arbitral
Awards (1958 New York Convention). Italian civil law (Section 839) provides for
and governs the enforcement of foreign arbitration awards in Italy.
INVESTOR-STATE DISPUTE SETTLEMENT
Italian law recognizes and enforces foreign court judgments. According to UNCTAD
statistics, since 2014, Italy has been the respondent state in 14 investment
disputes based on international investor agreements. Four have been decided in
favor of the investor, five have been decided in favor of Italy, and five remain
pending.
INTERNATIONAL COMMERCIAL ARBITRATION AND FOREIGN COURTS
Italy is a party to the following international treaties relating to
arbitration:
* The 1927 Geneva Convention on The Execution of Foreign Arbitral Awards
(entered into force on February 12, 1931);
* The 1958 New York Convention on the Recognition and Enforcement of Foreign
Arbitral Awards (entered into force on May 1, 1969); and
* The 1961 European Convention on International Commercial Arbitration (entered
into force on November 1, 1970).
Italy’s Code of Civil Procedure (Book IV, Title VIII, Sections 806-840) governs
arbitration, including the recognition of foreign arbitration awards. Italian
law is not based on the UNCITRAL Model Law; however, many of the principles of
the Model Law are present in Italian law. Parties are free to choose from a
variety of alternative dispute resolution methods, including mediation,
arbitration, and lawyer-assisted negotiation.
BANKRUPTCY REGULATIONS
Italy’s bankruptcy regulations are somewhat analogous to U.S. Chapter 11
restructuring and allow firms and their creditors to reach a solution without
declaring bankruptcy. In recent years, the judiciary’s role in bankruptcy
proceedings has been reduced to simplify and expedite proceedings. In 2015, the
Italian parliament passed changes to the bankruptcy law, including measures to
ease access to interim credit for bankrupt companies and to restructure debts.
Additional changes were approved in 2017 (juridical liquidation, early warning,
simplified process, arrangement with creditors, insolvency of affiliated
companies as a group, and reorganization of indebtedness rules). The measures
aim to reduce the number of bankruptcies, limit the impact on the local economy,
and facilitate the settlement of corporate disputes outside of the court system.
The reform followed the 2015 reform of insolvency procedures. Finally, a law
adopted in 2022 to implement Italy’s NRRP includes elements to resolve potential
bankruptcies through preliminary agreements among creditors, facilitated by
exchanges of information and data with the digital tools.
4. INDUSTRIAL POLICIES
INVESTMENT INCENTIVES
The government offers incentives to encourage private sector investment in
targeted sectors and economically depressed regions, particularly in southern
Italy. The incentives are available to eligible foreign investors as well.
Incentives include grants, low-interest loans, and deductions and tax credits.
Some incentive programs have a cost cap, which may prevent otherwise eligible
companies from receiving the incentive benefits once the cap is reached. The
government applies cost caps on a non-discriminatory basis, typically based on
the order in which the applications were filed. The government does not have a
practice of issuing guarantees or jointly financing foreign direct investment
projects.
Italy provides an incentive for investments by SMEs in new machinery and capital
equipment (“New Sabatini Law”), available to eligible companies regardless of
nationality. This investment incentive provides financing, subject to an annual
cost cap. Sector-specific investment incentives are also available in targeted
sectors. The government has renewed “New Sabatini Law” benefits, extending them
through 2027.
The government allocated €23.8 ($25.8) billion in 2021-2023 for the private
investment plan “Industry 4.0” (later renamed “Transition 4.0”), which aims to
improve the Italian industrial sector’s competitiveness through a combination of
policy measures, tax credits, and research and infrastructure funding. The 2022
budget reformulated the rates of the tax credit of “Industry/Transition 4.0” for
the purchase of new investment goods. The government also extended the
incentives to the purchase of immaterial goods (software, system integration,
platforms, and apps). The 2023 budget, however, downscaled this program
significantly, ending tax credits related to both tangible and intangible
ordinary capital goods. Incentives related to investments in tangible capital
goods that were already scheduled and partially funded in 2022 were extended
until September 2023. In addition, the 2023 budget reduced – but did not
eliminate – “Industry/Transition 4.0” tax credits for certain research and
development activities as well as for investment in green-technology innovation.
Under the so-called “Green Bonus” program implemented in 2020, the government
provided generous tradable tax incentives for renovations that increase
buildings’ energy efficiency. This program was extended from the end of 2021
until the end of 2022. A similar program provided tax incentives for façade
improvements. Given concerns about the cost of the Green Bonus program and
alleged fraud, the government in 2023 decided to reduce the amount of the tax
credits and end their tradability.
The Italian tax system generally does not discriminate between foreign and
domestic investors. Italy’s digital services tax of 3 percent affects certain
U.S. companies but is suspended and pending removal pursuant to the global OECD
solution on such tax regimes. The corporate income tax (IRES) rate is 24
percent. In addition, companies may be subject to a regional tax on productive
activities (IRAP) at a 3.9 percent rate. In 2022, Italy imposed a 25 percent
“energy windfall tax” on energy companies that reported additional profits. The
government reformulated the tax for 2023 and imposed a tax of 50 percent on
energy companies’ income that exceeds prior years’ averages by more than 10
percent. The tax generated a much lower revenue flow than expected and is the
subject of an appeal to the constitutional court. In 2023, Italy imposed a 40
percent tax on bank profits targeting “unjust” earnings driven by high interest
rates, then amended the measure to allow banks to set aside cash as reserves in
lieu of paying the additional tax.
FOREIGN TRADE ZONES/FREE PORTS/TRADE FACILITATION
In 2017, Laws 91 and 123 created eight special economic zones (SEZs) managed by
port authorities in Italy’s less-developed southern regions (Abruzzo,
Basilicata, Calabria, Campania, Molise, and Puglia) and on the islands of
Sardinia and Sicily. Law 162 of 2023 unified these eight SEZs into one unified
single SEZ effective January 2024. The law also established a web portal for the
single SEZ to provide details of benefits provided to businesses, which is
available here (Italian only as of April 2024):
https://www.impresainungiorno.gov.it/web/l-impresa-e-la-pa-centrale/zes .
Italy’s National Recovery and Resilience Plan includes €630 million ($682
million) for SEZ investments. Businesses investing in SEZs benefit from tax
breaks, hiring incentives, and reduced bureaucracy. With the 2020 budget law,
the Italian government established that each SEZ would be chaired by a
government commissioner.
Law 205 of 2017 also regulated the possibility of setting up simplified
logistics zones (ZLS – Zona Logistica Semplificata) in the port areas of the
most developed regions, as identified by European legislation. ZLSs aim to
provide benefits including administrative simplifications, economic incentives,
and tax relief. The first ZLS to become operational was the “Venice Rodigino”
ZLS, which was established by a prime ministerial decree signed in October 2022.
Free trade zones (FTZs) allow companies to import goods and re-export them to
non-EU countries without paying import tariffs and free of any customs
restraints. FTZ law allows companies to employ workers of the same nationality
of the company under that country’s labor laws. Italy’s main FTZ is in the
northeastern city of Trieste. Others are Venice and Gioia Tauro.
In addition to FTZs, SEZs, and ZLSs, Italian ports are also focusing on
customs-free zones, whereby port operators can conduct commercial activities and
take advantage of significant customs incentives. As of August 2022, there were
six operating customs free zones in Italy (Trieste, Venezia, Portovesme,
Taranto, Brindisi Nord, and Brindisi Capobianco).
PERFORMANCE AND DATA LOCALIZATION REQUIREMENTS
As a member of the EU, Italy does not follow forced localization policies in
which foreign investors must use domestic content in goods or technology. Italy
does not have enforcement procedures for investment performance requirements.
Italy does not require local data storage but companies transmitting customer or
other business-related data within or outside of the EU must comply with
relevant EU privacy regulations.
In 2020, the GOI exercised its Golden Power authority in several 5G-equipment
procurement cases. In some cases, the GOI authorized telecom operators to
purchase equipment from certain foreign IT vendors if they could adhere to a set
of “prescriptions.” One of these prescriptions included access to the foreign IT
vendors’ source code.
5. PROTECTION OF PROPERTY RIGHTS
REAL PROPERTY
Real-property rights are enforced in Italian courts. Mortgages and judgment
liens against property exist in Italy and the recording system is reliable.
Although Italy does not publish official statistics on property with titling
issues, the Embassy estimates that less than 10 percent of the land in Italy
lacks clear title. Italian law includes provisions whereby peaceful and
uninterrupted possession of real property for a period of 20 years can, under
certain circumstances, allow the occupying party to take title to a property.
Real-property registration can be performed online via Italy’s tax agency. The
online service allows for contract registration as well as the payment of
registration and stamp fees.
INTELLECTUAL PROPERTY RIGHTS
Italy is not listed in USTR’s Review of Notorious Markets for Counterfeiting and
Piracy, although USTR has identified several online domains subject to blocking
orders in Italy that have promoted access to unlicensed digital content. The
Italian communications authority (AGCOM)’s authority to block access to computer
servers and web sites is limited to those located in Italy. Many illegal
services provide content through servers located outside Italy.
Italian laws are considered effective in protecting and enforcing intellectual
property (IP) rights including trademarks and copyright. The Italian police
forces, the Guardia di Finanza, and the customs agency, Agenzia delle Dogane
(ADM) are primarily responsible for combating IP theft and take this
responsibility seriously. Italian magistrates are also aware of the economic
value of IP and have actively prosecuted IP theft. USTR removed Italy from the
Special 301 Watch List in 2014 after AGCOM issued a new regulation to combat
digital copyright theft. The regulation created a process by which rights
holders can report online infringements to AGCOM, which then blocks access to
the domestic websites hosting infringing content. In July 2023, the government
approved new antipiracy legislation that improved AGCOM’s powers and provided
new technological tools to combat online piracy. In July 2023, the Italian
government approved a reform to the Industrial Property Code which regulates
patents and trademarks and aims to strengthen protections for industrial
property and simplify administrative and digitization processes.
In December 2021, the EU Copyright in the Digital Single Market (CDSM) Directive
came into force, essentially replacing the Italian Copyright Act. The Italian
version is more lenient on sharing the digital search results (through new
original works research) of legally accessed materials databases and archival
collections unless rights holders “opt out.” The Italian law also recognizes the
exception to copyright for cultural heritage preservation. For example, copies
of works in any format or medium cannot be limited via a contract if permanently
held by cultural heritage institutions. The law also allows educational
institutions to use sections of copyrighted materials without the copyright
holder’s permission if used in secure online systems accessed only by students
and educators.
Italy tracks and reports seizures of counterfeit goods, primarily through ADM
which has an active enforcement posture at Italian ports and an excellent track
record for interdicting goods connected with intellectual and property right
violations, or goods that infringe trademark, patent, copyright, or geographical
indicator regulations. In 2022, Italy seized €10.2 million ($11 million) worth
of counterfeit goods.
The Republic of San Marino is considering new legislation to improve trademark
registration and is currently digitizing trademark applications. The San Marino
Trademark and Patent Office (USBM) publishes a bimonthly bulletin to advertise
new trademark applications. Requests remain in pending status for four months,
during which interested third parties can submit their observations to USBM.
While the final decision rests with USBM, there is pending legislation that
would grant third parties the possibility to submit their remarks and express
their opposition to the registration of a trademark. In this case, USBM would
refer the final decision to a new entity composed of specialized experts and
attorneys. San Marino has finalized but not yet signed an association agreement
with the EU. Once signed, San Marino will need to align its intellectual
property laws with EU regulations.
For additional information about treaty obligations and points of contact at
local IPR offices, please see the World Intellectual Property Organization’s
country profiles at http://www.wipo.int/directory/en/ .
6. FINANCIAL SECTOR
CAPITAL MARKETS AND PORTFOLIO INVESTMENT
The government welcomes foreign portfolio investments, which are generally
subject to the same reporting and disclosure requirements as domestic
investments. Financial resources flow relatively freely in Italian financial
markets and capital is allocated mostly on market terms. Foreign participation
in Italian capital markets is not restricted. In practice, many of Italy’s
largest publicly traded companies have foreign owners among their primary
shareholders. While foreign investors may obtain capital in local markets and
have access to a variety of credit instruments, gaining access to equity capital
is difficult. Italy has a relatively underdeveloped private-equity capital
market and businesses have a long-standing preference for credit financing. The
limited venture capital available is usually provided by established commercial
banks and a handful of venture-capital funds.
Milan serves as the financial capital of Italy and is home to Italy’s only stock
exchange, the Milan Stock Exchange – MIL (Borsa Italiana). In 2021, the
Netherlands-based Euronext acquired the MIL from the London Stock Exchange.
Euronext’s primary data center was transferred from London to Bergamo, in
northern Italy, in October 2022. Borsa Italiana is relatively small, with 428
listed companies and a market capitalization of 28.6 percent of GDP at the end
of 2023. Although the exchange remains primarily a source of capital for larger
Italian firms, Borsa Italiana created “AIM Italia” in 2012 as an alternative
exchange with streamlined filing and reporting requirements to encourage SMEs to
seek equity financing. The government recognizes that Italian firms remain
overly reliant on bank financing, which discourages foreign investment, and has
initiated some programs to encourage alternative forms of financing, including
venture capital and corporate bonds. Financial experts argue that slow CONSOB
(the Italian companies and stock exchange commission) processes and cultural
biases against private equity limit equity financing in Italy. Venture Capital
Monitor, produced by LUISS business school, reported that after constant growth
from 2018, venture-capital investments in innovative Italian startups slowed in
2023. The overall total of investments in innovative Italian
startups in 2023 stood at around €1.4 billion ($1.5 million), while in 2022
they were almost €2.2 billion ($2.4 million). However, for the third
consecutive year, investments exceeded €1 billion, representing a sign of
consolidation and maturity of the Italian market. The state, through CDP Venture
Capital (part of state-owned investment bank Cassa Depositi e Prestiti, or CDP)
plays an active role in the Italian venture capital market. CDP Venture Capital,
the CDP subsidiary dedicated to investments innovative SMEs, reported investing
a total of €3.5 billion ($3.8 billion) by the end of 2023.
Italy’s financial markets are regulated by securities regulator CONSOB, Italy’s
central bank, the Bank of Italy (BOI), and the Institute for the Supervision of
Insurance (IVASS). CONSOB supervises and regulates Italy’s securities markets
(e.g., the Milan Stock Exchange). As of January 2024, the European Central Bank
directly supervised 12 of Italy’s largest banks and indirectly supervised less
significant Italian banks through the BOI. IVASS supervises and regulates
insurance companies. Liquidity in the primary markets is sufficient to enter
and exit sizeable positions, though Italian capital markets are small by
international standards. Liquidity may be limited for certain less-frequently
traded investments (e.g., bonds traded on the secondary and OTC markets).
Italian policies generally facilitate the flow of financial resources to
markets. Dividends and royalties paid to non-Italians may be subject to a
withholding tax, unless covered by a tax treaty. Dividends paid to permanent
establishments of non-resident corporations in Italy are not subject to the
withholding tax.
Italy imposed a financial transactions tax (FTT, or Tobin Tax) beginning in
2013. Financial trading is taxed at 0.1 percent in regulated markets and 0.2
percent in unregulated markets. The FTT applies to daily balances rather than
to each transaction. The FTT applies to trade in derivatives as well, with fees
ranging from €0.025 to €200. High-frequency trading is also subject to a 0.02
percent tax on trades occurring every 0.5 seconds or faster (e.g., automated
trading). The FTT does not apply to “market makers,” pension and small-cap
funds, transactions involving donations or inheritances, purchases of
derivatives to cover exchange/interest-rate/raw-materials (commodity market)
risks, government and other bonds, or financial instruments for companies with a
capitalization of less than €500 million ($542 million). The FTT has been
criticized for discouraging small savers from investing in publicly traded
companies on the Milan stock market.
There are no restrictions on foreigners engaging in portfolio investment in
Italy. Financial-services companies incorporated in another EU member state may
offer investment services and products in Italy without establishing a local
presence. Since 2020, investors, Italian or foreign, acquiring a stake of more
than one percent of a publicly traded Italian firm must inform CONSOB but do not
need its approval. Any Italian or foreign investor seeking to acquire or
increase its stake in an Italian bank equal to or greater than 10 percent must
receive prior authorization from the BOI. Acquisitions of holdings that would
change the controlling interest of a banking group must be communicated to the
BOI at least 30 days in advance of the closing of the transactions. Approval
and advance authorization by the Italian Insurance Supervisory Authority are
required for any significant acquisition in ownership, portfolio transfer, or
merger of insurers or reinsurers.
Italy has sought to curb widespread tax evasion – which cost Italy about €90
billion ($97.5 billion) in 2021 according to the government (roughly 5 percent
of GDP) – by improving enforcement and changing attitudes. GOI actions included
a public communications effort to reduce tolerance of tax evasion; mailing out
letters to those suspected of not fully reporting their income; increased and
visible financial-police controls on businesses (e.g., raids on businesses in
vacation spots at peak holiday periods); and audits requiring individuals to
document their income. Electronic invoicing, which has been mandatory for
businesses (above a certain revenue threshold) since 2014 for
business-to-government transactions and mandatory since 2019 for
business-to-business and business-to-consumer transactions, has also reduced tax
evasion. Tax reforms implemented in 2015 institutionalized some OECD best
practices to encourage taxpayer compliance, including by reducing the
administrative burden for taxpayers through the increased use of technology such
as e-filing, pre-completed tax returns, and automated screenings of tax returns
for errors and omissions prior to a formal audit.
The reforms also offered additional certainty for taxpayers through programs
such as cooperative compliance and advance tax rulings (i.e., binding opinions
on tax treatment of transactions in advance) for prospective investors. The
previous government approved overarching guidelines of a general tax reform to
simplify Italy’s tax system, which remains complex and has relatively high tax
rates on labor income. Parliament did not pass the tax reform, however. The
current government adopted guidelines for a new tax reform in March 2023 that
would reduce Italy’s tax brackets, eliminate certain tax deductions, and tax
expenditures. The Parliament passed the tax reform framework legislation in
August 2023 (law 111/2023). From the date of entry into force (August 29, 2023),
the government has 24 months to develop the related implementing decrees. Most
of the details of the reform will be contained in the implementing decrees.
The GOI and the BOI have accepted and respect IMF obligations, including Article
VIII.
In March 2024, the parliament approved a capital-markets reform. Based on the
recommendation of a 2020 OECD report, the law is aimed at stimulating the growth
of the Italian capital market by promoting access and permanence of companies
within the financial markets. It is meant to lure more listings to the Milan
stock exchange, pre-empt hostile takeovers, and prevent big companies from
incorporating outside of Italy. The law’s advocates argue it will remove an
obstacle to the creation of large corporations despite the shallowness of
Italy’s capital markets. Critics warn it may have the opposite effect. With
foreigners comprising 95 percent of shareholders in Italian listed firms,
critics also fear the law will favor Italians by allowing public companies to
grant long-term shareholders, who tend to be domestic, outsized voting rights
and, if their stake exceeds 9 percent, the ability to veto some board
appointments. The government now has 12 months to implement the law via decree.
MONEY AND BANKING SYSTEM
Despite isolated problems at individual Italian banks, the banking system
remains sound and capital ratios exceed regulatory thresholds. About 100
different banking groups and independent banks operate in Italy. While Italian
banks’ profit margins suffered since 2011, they recovered significantly in 2021,
2022, and 2023. The BOI said the annualized rate of return on equity (ROE)
increased to 6 percent in 2020, 8percent in 2022 and 11 percent in 2023. This
increase in ROE may suggest enhanced efficiency in generating profits related to
shareholders’ liquidity. Government support measures for households and firms
and the economy’s recovery in 2021 contributed to mitigating the effects of the
pandemic on the quality of banks’ assets. While the BOI has not yet released ROE
data for all of 2023, major Italian banks reported improvements in their
profitability compared to 2022. The change in the banking sector’s profitability
is linked to Italy’s economic growth outlook, rising net interest income because
of changes in monetary policy, and reorganizational efforts to reduce costs and
increase efficiency. The exceptional performance observed in 2023 can be
attributed to proactive provision of public guarantees on loans granted during
the pandemic and central bank monetary policies creating favorable market
conditions for the banking sector.
The ratio of non-performing loans (NPLs) to total outstanding loans has
decreased significantly since its height in November 2015 during the financial
crisis, as banks continue to offload NPLs and unlikely-to-pay loans. As of
December 2023, net NPLs decreased to €16.6 billion ($18 billion). ABI, the
Italian banking association, reported the NPL ratio was 0.98 percent (net of
provisions) in December 2023, compared to 0.81 percent in December 2022 and 4.89
percent in November 2015 when net NPLs equaled €88.8 billion ($94.6 billion).
The GOI has also taken steps to facilitate acquisitions of NPLs by outside
investors.
In 2016, the GOI created a €20 billion ($21.3 billion) bank rescue fund to
assist struggling Italian banks in need of liquidity or capital support.
Italy’s fourth-largest bank, Monte Dei Paschi Di Siena (MPS), became the first
bank to avail itself of this fund in 2019. The government owned 64 percent of
MPS but failed to exit the bank by the beginning of 2022, as agreed with EU
authorities. The government now hopes to offload its stake by the end of 2024.
In November 2023 and March 2024, the Ministry of Economy and Finance (MEF) sold
25 and 12.5 percent of the bank for €720 million ($781 million) and €650 million
($705 million) respectively, lowering its overall stake to 26.73 percent. The
government also facilitated the sale of two struggling “Veneto banks” (Banca
Popolare di Vicenza and Veneto Banca) to Intesa Sanpaolo in 2017. While Italy’s
Interbank Deposit Guarantee Fund (FITD) owned 80 percent of Banca Carige after
an industry-financed rescue in 2019, Carige was subsequently bought by
Modena-based BPER bank. This merger created Italy’s fourth-largest banking
group.
Government loan guarantees (to large companies via SACE, Italy’s export credit
agency, and to SMEs via the Central Guarantee Fund, or Fondo Centrale di
Garanzia) and repayment moratoriums also helped lead to a significant increase
in credit to firms during the pandemic. The guarantee on SMEs and large
companies (though SACE) were extended to December 2022. The repayment moratorium
expired in December 2021. Despite some banking-sector M&A activity in the past
several years, the ECB, OECD, and Italian government continue to encourage
additional consolidation to improve efficiency. In 2022, Italy had 51 banking
groups, three cooperative banks, and 45 stand-alone banks, as well as 81
subsidiaries of foreign banks (including 73 from EU member states and two from
the United States). As of January 2023, there were 12 groups classified as
“significant” under the EU’s Single Supervisory Mechanism.
The Italian banking sector remains concentrated on physical bank branches for
delivering services, contributing to sector-wide inefficiency. Electronic
banking is available in Italy, but adoption remains below euro-zone averages.
Cash remains widely used for transactions. The limit for cash transactions was
raised from €2,000 ($2,130) to €5,000 ($5,326) as of January 2023.
Credit is allocated on market terms, with foreign investors eligible to receive
credit in Italy. Credit in Italy remains largely bank driven. In practice,
foreigners may encounter limited access to finance, as Italian banks may be
reluctant to lend to prospective borrowers (even Italians) absent a preexisting
relationship.
The Ministry of Economy and Finance and BOI have indicated interest in
blockchain technologies to transform the banking sector. Beginning in 2021, the
Italian Banking Association implemented a Distributed Ledger Technology-based
system across the Italian banking sector. The process aims to reconcile material
products such as commercial paper or promissory notes that are exchanged between
banks.
In October 2023, the parliament approved, with amendments, the Italian Windfall
Tax for Banks, affecting both Italian banks and Italian branches of foreign
banks. It was a one-off tax, solely for fiscal year 2023, to be levied at a 40
percent rate on the increase of interest margin realized by banks over a
monitoring period of one or two financial years, subject to five percent or 10
percent floors, respectively. The main amendments to the Italian Windfall Tax
for Banks relate to (i) determining taxable basis and (ii) the opportunity for
the banks, in lieu of the relevant cash out, to book a non-distributable reserve
of at least two and a half times the payable amount of the tax.
FOREIGN EXCHANGE AND REMITTANCES
FOREIGN EXCHANGE
In accordance with EU directives, Italy has no foreign-exchange controls. There
are no restrictions on currency transfers; there are only reporting
requirements. Banks are required to report any transaction over €1,000 ($1,065)
due to money laundering and terrorism-financing concerns. Profits, payments, and
currency transfers may be freely repatriated. Residents and non-residents may
hold foreign-exchange accounts. As noted previously, the GOI raised the limit on
cash payments for goods or services from €2,000 ($2,130) to €5,000 ($5,326) as
of January 2023. Payments above this amount must be made electronically.
Enforcement remains uneven. The rule exempts e-money services, banks, and other
financial institutions, but not payment-services companies.
Italy is a member of the European Monetary Union (EMU), with the euro as its
official currency. Exchange rates are floating.
REMITTANCE POLICIES
There are no limitations on remittances, though transactions above €1,000
($1,065) must be reported.
SOVEREIGN WEALTH FUNDS
State-owned investment bank Cassa Depositi e Prestiti (CDP) launched a strategic
wealth fund in 2011, now called CDP Equity (formerly Fondo Strategico Italiano –
FSI). CDP Equity has €9.7 billion ($10.3 billion) in invested capital and 18
companies in its portfolio, holding both majority and minority participations.
CDP Equity invests in companies of relevant national interest and on its website
( http://en.cdpequity.it/ ) provides information on its funding, investment
policies, criteria, and procedures. CDP Equity is open to capital investments
from outside institutional investors, including foreign investors. CDP Equity
is a member of the International Working Group of Sovereign Wealth Funds and
follows the Santiago Principles. CDP’s investments are mostly in domestic assets
and companies, even if the company has a significant international footprint.
7. STATE-OWNED ENTERPRISES
Although there were large-scale privatizations in the 1990s and early 2000s, the
state retains substantial holdings throughout the economy. Through the MEF, the
government maintains direct or indirect interests in hundreds of companies and
appoints senior executives in the case of controlling interests. Between 2023
and 2024, it is estimated that the government will have appointed over 600
officials in 135 entities. According to Italy’s largest financial dailies and
other studies, as of December 2023, the MEF held stakes (either directly or
indirectly) in companies representing about 30 percent of Italy’s stock-market
capitalization. In several cases, MEF exercises its ownership via state-owned
investment bank Cassa Depositi e Prestiti (CDP is 83 percent owned by the GOI).
Examples of state-owned state-controlled entities are state railways Ferrovie
dello Stato (100 percent), Italian postal service Poste Italiane (65 percent),
energy conglomerate Enel (23.6 percent), oil and gas conglomerate Eni (32
percent), and defense manufacturer Leonardo (30.2 percent). In turn, many of
these large companies own several smaller subsidiaries. Some, like Enel, Eni, or
Fincantieri, have a significant presence in the U.S. market.
Despite the Italian government’s shareholding positions, most of these companies
operate in a competitive environment (domestically and internationally), are
under private-sector commercial laws, and are responsive to market-driven
decision-making. In addition, many of the state-controlled entities are publicly
traded, providing additional transparency and corporate-governance obligations,
including equitable treatment for non-governmental minority shareholders. With
some exceptions, state-owned enterprises (SOEs) are subject to the same tax
treatment and budget constraints as fully private firms. Additionally,
industries with SOEs remain open to private competition. The government,
however, has sometimes influenced these firms to make decisions that may differ
from purely commercial objectives. For example national interest and
energy-security concerns may influence Eni and gas-transmission system operator
Snam’s investment decisions.
As an EU member, Italy is covered by EU government-procurement rules. As an OECD
member, Italy adheres to the Guidelines on Corporate Governance of State-owned
Enterprises.
PRIVATIZATION PROGRAM
The government conducted a major privatization effort in the 1990s and early
2000s. The government retained non-controlling minority shares in some
companies, such as TIM (Telecom Italia) and “golden shares” (sufficient to
maintain a controlling interest) in others, such as Eni and Enel. A tepid
privatization program relaunched during the 2010s was largely halted, and in
some cases reversed, during the pandemic. During the pandemic, the government
acquired stakes in some entities either facing financial difficulty or
considered strategic and at risk of a foreign acquisition. For example, the
government took a 38 percent share of the Arcelor Mittal steel plant in Taranto
(formerly known as ILVA). The MEF owned 64 percent of Banca Monte dei Paschi di
Siena (MPS) after a 2017 bailout that cost taxpayers €5.4 billion ($5.75
billion). While the government agreed with the EU Commission to sell its stake
by the beginning of 2022, it now hopes to sell the bank by the end of 2024. In
November 2023 and March 2024, the Ministry of Economy and Finance (MEF) sold 25
and 12.5 percent of the bank for €720 million ($781 million) and €650 million
($705 million) respectively, lowering its overall stake to 26.73 percent. As of
March 2024, the government was also negotiating the sale of state-owned ITA
Airways (which assumed some of the former Alitalia’s assets) to Lufthansa. The
government in the 2024 budget committed to generate in three years 1 percent of
GDP, or €20 billion ($21.7 billion), in privatizations. Analysts calculate that
lower growth in 2024 will lead to a shortfall in public accounts of at least €10
billion ($10.7 billion). To cover the shortfall, the government is hoping to
accelerate partial privatizations of key parastatals Poste Italiane, Eni, and a
not yet defined stake of Ferrovie dello Stato/Italian State Railways.
8. RESPONSIBLE BUSINESS CONDUCT
There is a general awareness of expectations and standards for responsible
business conduct (RBC) in Italy. Enforcement of civil society disputes with
businesses is generally fair, though the slow pace of civil justice may delay
individuals’ ability to seek effective redress for adverse business impacts. In
addition, EU laws and standards on RBC apply in Italy. In the event Italian
courts fail to protect an individual’s rights under EU law, it is possible to
seek redress at the European Court of Justice (ECJ).
CONSOB has enacted corporate governance, accounting, and executive-compensation
standards to protect shareholders. Information on corporate-governance standards
is available at:
https://www.consob.it/c/portal/layout?p_l_id=892052&p_v_l_s_g_id=0
As an OECD member, Italy supports and promotes the OECD Guidelines for
Multinational Enterprises (“Guidelines”), which are recommendations by
governments to multinational enterprises for conducting a risk-based due
diligence approach to achieve responsible business conduct (RBC). The Guidelines
provide voluntary principles and standards in a variety of areas including
employment and industrial relations, human rights, environment, information
disclosure, competition, consumer protection, taxation, and science and
technology. (See OECD Guidelines: https://www.oecd.org/investment/mne/ ). The
Italian National Contact Point (NCP) for the Guidelines is in the Ministry of
Enterprises and Made in Italy. The NCP promotes the Guidelines; disseminates
related information; and encourages collaboration among national and
international institutions, the business community, and civil society. The NCP
also promotes Italy’s National Action Plan on Corporate Social Responsibility
which is available online. See Italian NCP:
http://pcnitalia.sviluppoeconomico.gov.it/en/ .
Independent NGOs and unions operate freely in Italy. Additionally, Italy’s three
largest trade-union confederations actively promote and monitor RBC. They serve
on the advisory body to Italy’s NCP for the OECD Guidelines for Multinational
Enterprises.
Italy encourages adherence to OECD Due Diligence Guidance for Responsible Supply
Chains of Minerals from Conflict-Afflicted and High-Risk Areas and has provided
operational guidelines for Italian businesses to assist them in supply-chain due
diligence. Italy is a member of the Extractive Industries Transparency
Initiative (EITI). The Italian Ministry of Foreign Affairs works internationally
to promote the adoption of best practices.
ADDITIONAL RESOURCES
Department of State
* Country Reports on Human Rights Practices (
https://www.state.gov/reports-bureau-of-democracy-human-rights-and-labor/country-reports-on-human-rights-practices/)
* Trafficking in Persons Report (
https://www.state.gov/trafficking-in-persons-report/)
* Guidance on Implementing the “UN Guiding Principles” for Transactions Linked
to Foreign Government End-Users for Products or Services with Surveillance
Capabilities (
https://www.state.gov/key-topics-bureau-of-democracy-human-rights-and-labor/due-diligence-guidance/)
* U.S. National Contact Point for the OECD Guidelines for Multinational
Enterprises (
https://www.state.gov/u-s-national-contact-point-for-the-oecd-guidelines-for-multinational-enterprises/)
* Xinjiang Supply Chain Business Advisory (
https://www.state.gov/xinjiang-supply-chain-business-advisory/)
Department of the Treasury
* OFAC Recent Actions (
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions )
Department of Labor
* Findings on the Worst Forms of Child Labor Report (
https://www.dol.gov/agencies/ilab/resources/reports/child-labor/findings )
* List of Goods Produced by Child Labor or Forced Labor (
https://www.dol.gov/agencies/ilab/reports/child-labor/list-of-goods )
* Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the
World ( https://www.dol.gov/general/apps/ilab )
* Comply Chain ( https://www.dol.gov/ilab/complychain/ )
CLIMATE ISSUES
The Integrated National Plan for Energy and Climate (PNIEC) issued in 2020
outlined Italy’s strategy from 2021 to 2030 in relation to decarbonization,
energy efficiency, self-consumption vs. distributed generation of renewable
energy, and energy security. After the adoption of more ambitious targets by the
EU in 2021, reducing net greenhouse gas emissions by at least 55 percent by 2030
and reaching net zero emissions by 2050, Italy published its implementation
strategy, called the Ecological Transition Plan (ETP), in 2022. According to the
National Recovery and Resilience Program (NRRP), Italy plans to eliminate the
use of coal by 2025 and bring renewables’ share of final gross energy production
to 72 percent by 2030 and 95-100 percent by 2050. The NRRP earmarked €59 billion
($66 billion) to incentivize renewable energy sources between 2021 and 2026. The
private sector must follow current EU emissions regulations, since there are no
specific Italian requirements.
After Italy’s ratification of the Convention for Biological Diversity in 2010,
Italy adopted its first National Strategy for Biodiversity for 2010-2020. In
August 2023, the Ministry for Environment and Energy Security (MASE) issued a
ministerial decree to launch the “National Strategy for Biodiversity towards
2030.” In accordance with the European Biodiversity Strategy for 2030, the key
objectives are focused on increasing protected areas (30 percent of both land
and sea must be protected by 2030, 10 percent of which are “rigorously protected
areas”) and restoring 30 percent of marine and terrestrial ecosystems. The
Implementation Plan is scheduled to be adopted in 2024.
Italy introduced the Ecobonus in 2012 to improve the energy efficiency of
residential and non-residential units in Italy, as well as to reduce the
consumption of fossil fuels and natural gas. The 2024 scheme allowed up to 75
percent of the expenses spent to increase energy efficiency in buildings (e.g.,
new heating and boiler systems; building external coating; windows replacements,
solar panels) to be reimbursed as tax credits in ten equal annual installments.
This tax credit applies to various buildings, including stores, offices, shops,
hotels, and other hospitality buildings in addition to residential units. In
2019, Italy introduced another Ecobonus to increase the incentives for buying
electric and hybrid vehicles. The Ecobonus is scaled according to CO2 emissions
and vehicle classes and was renewed in 2023.
Italy’s public-procurement system is bound by international obligations under
both the WTO Government Procurement Agreement and the EU Public Procurement
Directives. Italy has over 22,000 contracting agencies at the central and local
level that are subject to EU Directives on public procurement. GOI ministries
are the main central contracting agencies. At the local level, principal
contracting agencies include regions, provinces, municipalities, and entities
controlled by the municipalities, including local healthcare authorities. In
2002, Italy approved the “Environmental Action Strategy for Sustainable
Development in Italy,” which states that at least 30 percent of goods purchased
must meet ecological requirements and 30-40 percent of the vehicle fleet for
durable goods must be energy efficient. In 2017, in compliance with the European
Green Public Procurement directive, Italy made the use of “Minimal Environmental
Criteria” (MEC) for acquiring products and services by public administrations
mandatory. Since 2017, MET has identified the MEC for 20 categories of products
and services. According to Italian budget law for 2020, public administrations
must reserve a 50 percent quota for the purchase or rental of electric, hybrid,
or hydrogen vehicles when renewing their fleet.
9. CORRUPTION
RESOURCES TO REPORT CORRUPTION
Contact at the government agency or agencies that are responsible for combating
corruption:
Autorità Nazionale Anticorruzione (ANAC)
Via Marco Minghetti, 10 – 00187 Roma
Phone: +39 06 62-289-571 or +39-800-69-36
Email : protocollo@pec.anticorruzione.it
Contact Info page : https://www.anticorruzione.it/contattaci
Contacts at “watchdog” organizations:
Transparency International Italia
P.le Carlo Maciachini 11
20159 Milano – Italy
T: +39 02 40093560
E: info@transparency.it
Web site: www.transparency.it
Libera
Via Stamira, 5 – 00162 Roma
T: +39 06 69770301-2-3
E: libera@libera.it
Website: www.libera.it
Corruption and organized crime continue to be significant impediments to
investment and economic growth in parts of Italy, despite efforts by successive
governments to reduce risks. Micro, small, and medium-sized businesses, which
account for 99 percent of Italy’s companies, are at a higher risk for
corruption, according to an October 2022 report by the Organization for Economic
Co-operation and Development (OECD). The report identifies Italy’s risk sectors
as energy, transportation, aerospace, large engineering enterprises, and
distribution networks.
Anti-corruption laws and trials have been somewhat effective in stopping
corruption. In 2018, the parliament passed legislation that introduced
provisions to combat corruption in the public sector and regulate campaign
finance. The bill changed the statute of limitations for corruption-related and
other crimes, making it more difficult for parties to “run out the clock” on
their respective cases. In 2019, the government passed an anti-corruption
measure, called “spazza-corrotti,” extending the same treatment to political
parties and related foundations, strengthening the penalties for corruption
crimes against public administration, and providing more tools for
investigations. In 2020, parliament passed a decree that created an
Inter-Departmental Working Group to formulate a code of risk assessment measures
in a continued effort to prevent corruption in the government. In 2023, the
government approved a decree to implement EU Directive 1937/2019 regarding the
protection of whistleblowers and continued to consider proposed EU directive
2023/0135 on combatting corruption.
These actions have reduced the perception of corruption in Italy, improving
Italy’s overall rank and score in Transparency International’s Corruption
Perception Index. Since 2012, Italy has moved up 30 spots on the scale, rising
to 42nd out of 180 countries for 2023 with a score of 56 out of 100. Despite
progress, Italy’s score is below the EU average of 66.
U.S. individuals and firms operating or investing in foreign markets should take
the time to become familiar with the anticorruption laws of both the foreign
country and the United States to comply with them and, where appropriate, U.S.
individuals and firms should seek the advice of legal counsel.
The U.S. Embassy has not received specific complaints of corruption from U.S.
companies operating in Italy in the past year. The Embassy has received requests
for assistance from companies facing a lack of transparency and complicated
bureaucracy, particularly in the sphere of government procurement. There have
been no reports of government failure to protect NGOs that investigate
corruption (e.g., Transparency International Italy). Italy has signed and
ratified the UN Anticorruption Convention and the OECD Convention on Combatting
Bribery. The OECD Working Group on Bribery reported in October 2022 that Italy
strengthened its legislation and had increased its enforcement of foreign
bribery. The report also expressed concern regarding the high rate of dismissals
for foreign-bribery cases and the statute of limitations and low-level of fines
for companies engaged in foreign bribery. Among other recommendations, the OECD
called on Italy to develop a comprehensive national strategy to fight foreign
bribery and to proactively encourage companies to adopt anti-corruption
compliance schemes.
10. POLITICAL AND SECURITY ENVIRONMENT
Politically motivated violence is not generally a threat to foreign investments
in Italy. On rare occasion, extremist groups have made threats and deployed
letter bombs, firebombs, and Molotov cocktails against Italian public buildings,
private enterprises and individuals, and foreign diplomatic facilities.
Italy-specific travel information and advisories can be found at:
www.travel.state.gov.
11. LABOR POLICIES AND PRACTICES
Unemployment continues to be a pressing issue in Italy, particularly among youth
(ages 15-24). Italy has one of the EU’s highest youth-unemployment rates at 22.8
percent (February 2024), while the overall unemployment rate was 7.5 percent.
The lack of participation by women in the labor market continues to limit
economic growth: As of February 2024, the female employment rate was at 52.8
percent, one of the lowest in the EU, compared to male employment at 70.9
percent and overall employment at 61.9 percent. In 2023, the employment rate
reached 62.0 percent, the highest measures in recent Italian history. Female
unemployment was 8.7 percent compared to male unemployment at 6.5 percent. While
overall and female employment has improved after the COVID pandemic, the COVID
pandemic impaired the already low levels of female participation in the labor
force.
Italy has had a steadily declining population since 2014, while real wages have
stagnated since 1990. Unemployment and wage concerns continue to be factors in
emigration.
The effect of the COVID-19 pandemic on the labor force has been uneven and
substantial. Job losses were concentrated among self-employed workers and those
on fixed-term contracts, especially in the services sector, penalizing younger
workers and women. The unemployment rate did not increase due to the
government’s ban on layoffs and a program that provided paid furloughs, which
allowed companies to temporarily reduce staff during the COVID-19 emergency
without adding them to the ranks of the unemployed. Italy lost 456,000 jobs in
2020 but added 540,000 jobs in 2021, an additional 459,000 jobs in 2022, and
465,000 more jobs in 2023. Italy’s inactive population (neither working nor
seeking work actively) was 33.3 percent in January 2024, a drop of 0.4 percent
from January 2023 (corresponding to 157,000 people).
The labor market differs widely between the regions with industrial activity
concentrated in the north and agriculture and tourism concentrated in the south.
Most new jobs in recent years were in the services sector under temporary
contracts (without unemployment insurance and social-security benefits) and
predominantly taken by young people and women. More experienced and older
workers benefited from long-term contracts. The ratio of long-term unemployment
(unemployment lasting over 12 months) as a share of overall unemployment
continues to be among the highest of major European economies. Underemployment
(employment that is not full-time or not commensurate with an employee’s skills
and abilities) is also severe. Those underemployed usually find work in the
service industry or other low-skilled professions in the large informal economy,
which according to the latest available data from Italy’s statistics agency
(released in October 2023) accounted for 10.5 percent of GDP, with undeclared
work estimated slightly below 3 million full-time equivalent units.
Approximations by World Economics and studies for the EU estimated Italy’s
informal economy to be as high as 23.7 percent. The agricultural, services, and
construction sectors stood out for high rates of undeclared work. However, there
is anecdotal evidence of unpaid internships and trainee programs masking as de
facto undeclared work in every industry as a precursor to securing a regular
labor contract.
Labor-force productivity, a central weakness of the Italian economy, is below
the EU average. Many Italian employers report an inability to find qualified
candidates for highly skilled positions, demonstrating considerable skills
disparities in the Italian labor market. The government has also reported
difficulty finding qualified candidates to manage NRRP programs in southern
Italy. Well-educated Italians often find more attractive career opportunities
outside of Italy, with large numbers of Italians taking advantage of EU freedom
of movement to work in other EU countries. There is no reliable measure of
Italians working overseas, as many expatriate workers do not report their
whereabouts to the Italian government. Skilled labor shortages are a particular
problem in Italy’s industrialized north.
Companies may bring in a non-EU employee after the government-run employment
office has certified that no qualified, unemployed Italian is available to fill
the position. However, the cumbersome and lengthy process is a deterrent to
foreign firms seeking to comply with the law. Language barriers also prevent
outsiders from competing for Italian positions. Work visas are subject to annual
quotas, although intra-company transfers are exempt.
Indefinite employment contracts signed before March 2015 are governed by the
2012 labor regulations, which allowed firms to conduct layoffs and firings with
lump-sum payments. Under the 2012 system, according to Article 18 of the
workers’ statute of 1970, judges can order reinstatement of dismissed employees
(with back pay) if they find the dismissal was a pretext for discriminatory or
disciplinary dismissal. In practice, dismissed employees reserve the right to
challenge their release indefinitely, often using the threat of protracted legal
proceedings or an adverse court ruling to negotiate severance packages with
employers.
Indefinite employment contracts signed after March 2015 fall under rules
established by the 2015 Jobs Act, a labor-market reform package that
contractually advanced employee protections that increased with tenure. During
the first 36 months of employment, firms may dismiss employees for bona fide
economic reasons. Under the 2015 Jobs Act regime, dismissed employees must
appeal their dismissal within 60 days, and reinstatements are limited.
Regardless of the reason for termination, a former employee is entitled to
receive severance payments (TFR – trattamento di fine rapporto) equal to 7.4
percent of the employee’s annual gross compensation for each year worked. Other
2015 Jobs Act measures include universal unemployment and maternity benefits and
a reduced number of official labor contract templates (from 42 to six). For
example, Italy’s unemployment insurance (NASPI) provides up to six months of
coverage for laid-off workers. The government also provides worker-retraining
and job-placement assistance, but services vary by region. Implementation of
robust national active labor market policies remains in progress. The NRRP
includes provisions for unemployment benefit reform and new active labor
policies that the government approved as part of the 2022 budget. In 2018, the
government introduced the “Dignity Decree,” which rolled back some structural
reforms to Italy’s labor market adopted as part of the 2015 Jobs Act. For
example, the Dignity Decree set limits on the renewal of short-term contracts
(the government suspended the limit during the pandemic), made it costlier for
companies to fire workers, and extended incentives to hire people under 35 years
of age.
On January 1, 2024, the Citizenship Income program (Reddito di Cittadinanza) was
abolished and replaced by two new support measures: the Inclusion Allowance
(Assegno di Inclusione) and the Training and Work Support (Supporto alla
Formazione e al Lavoro). The Inclusion Allowance is economic support reserved
for families who have at least one member of the family who is underaged, over
60 years old, or has a disability. The Training and Work Support is reserved for
unemployed persons who are both ineligible for the Inclusion Allowance and are
actively seeking employment. It is a measure aimed to increase employment,
through training, professional qualifications, and other employment-activation
measures. In 2019, the government implemented an early retirement plan (Quota
100), which changed the pension law and permitted earlier retirement for
eligible workers aged 62 or older with at least 38 years of employment. The
benefit expired at the end of 2021, although the government proposed a less
generous early retirement pilot program in the 2022 budget and is actively
negotiating pension reform with unions. The 2024 budget extended with
restrictions the existing early retirement schemes.
While the 2015 Jobs Act included a statutory minimum wage, the government has
yet to implement the policy. With no national minimum wage, sector-wide
collective bargaining determines prevailing wages. The government in 2016
established an agency for Job Training and Placement (ANPAL) to coordinate with
Italian regional governments the implementation of many labor policies. ANPAL
oversees the relocation allowance (Assegno di Ricollocazione), an initiative to
provide unemployment benefits to workers willing to move to different regions,
and a related special wage guarantee fund (Cassa Integrazione Straordinaria)
that provides stipends for retraining.
Historical regional labor market disparities remain unchanged, with the southern
third of the country posting a significantly higher unemployment rate than
northern and central Italy. Despite these differences, internal migration within
Italy remains modest and limited to highly educated workers that cannot find
jobs in the south. At the same time, industry-wide national
collective-bargaining agreements set equal wages across the entire country. The
Ministry of Labor plans to close ANPAL and ANPAL Servizi after eight years of
activity and manage active labor policies from within the Ministry to promote
closer integration and coordination with central and local institutions.
Italy is a member of the International Labor Organization (ILO), and Italy does
not waive existing labor laws to attract or retain investments. Collective labor
agreements in different professions periodically fix the terms and conditions of
employment. Italian unions fall into four major national confederations: the
General Italian Confederation of Labor (CGIL); the Italian Confederation of
Workers’ Unions (CISL); the Italian Union of Labor (UIL); and the General Union
of Labor (UGL). The first three organizations are affiliated with the
International Confederation of Free Trade Unions (ICFTU), while UGL unions are
usually affiliated with the World Confederation of Labor (WCL). The
confederations negotiate national-level collective bargaining agreements with
employer associations that are binding on all employers in a sector or industry.
Collective bargaining is widespread, occurring at the national level and used
primarily by labor to secure compensation for inflation, cost-of-living
adjustments, and bonuses for increased productivity and profitability.
Firm-level collective bargaining is limited, and the Italian Constitution
provides that unions may reach collective agreements binding on all workers.
There are no official estimates of the percentage of the economy covered by
collective-bargaining agreements. However, a 2019 estimate from the European
Trade Union Institute estimated collective-bargaining coverage was approximately
80 percent (for national-level bargaining), with less coverage for
industry-level agreements and minimal coverage for company-level agreements.
Collective agreements may last up to three years, although the current practice
renews collective contracts annually. Collective bargaining establishes the
minimum standards for employment, but employers retain the discretion to apply
more favorable treatment to some employees covered by the agreement.
Labor disputes are handled through the civil court system, though subject to
specific procedures. Before entering the civil court system, parties must first
attempt to resolve their disputes through conciliation (administered by the
local office of the Ministry of Labor) and through specific union-agreed dispute
resolution procedures.
In cases of proposed mass layoffs or facility closures, the Ministry of
Enterprises and Made in Italy may convene a tripartite negotiation (ministry,
company, and union representatives) to reach a mutually acceptable agreement to
avoid layoffs or closure. In recent years, U.S. companies have faced significant
resistance from labor unions and politicians when attempting to right-size
operations. Due to the COVID-19 pandemic, the government banned most layoffs
through 2021. The end of the ban did not generate any relevant impact on
layoffs.
12. U.S. INTERNATIONAL DEVELOPMENT FINANCE CORPORATION (DFC), AND OTHER
INVESTMENT INSURANCE OR DEVELOPMENT FINANCE PROGRAMS
DFC does not currently operate programs in Italy.
13. FOREIGN DIRECT INVESTMENT STATISTICS
Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
Host Country Statistical source* USG or international statistical source USG or
International Source of Data: BEA; IMF; Eurostat; UNCTAD, Other Economic Data
Year Amount Year Amount Host Country Gross Domestic Product (GDP) ($M USD) 2023
$2,257,043 2022 $2,050,000 www.worldbank.org/en/country Foreign Direct
Investment Host Country Statistical source* USG or international statistical
source USG or international Source of data: BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) 2021 $11,024 2022 $26,107
BEA data available at https://apps.bea.gov/international/factsheet/ Host
country’s FDI in the United States ($M USD, stock positions) 2021 $51,533 2022
$39,752 BEA data available at https://apps.bea.gov/international/factsheet/
Total inbound stock of FDI as % host GDP 2021 25.3% 2022 22.4% UNCTAD data
available at
https://unctad.org/topic/investment/world-investment-report
* Source for Host Country Data: Italian GDP data is taken from ISTAT, the
official statistics agency. ISTAT publishes preliminary year end GDP data in
early February and issues revised data in early March. Italian FDI data is from
the Bank of Italy and is the latest available; new data are released in May.
Table 3: Sources and Destination of FDI Direct Investment from/in Counterpart
Economy Data 2022 From Top Five Sources/To Top Five Destinations (US Dollars,
Millions) Inward Direct Investment Outward Direct Investment Total Inward
$458,915 100% Total Outward $558,626 100% The Netherlands $109,044 24% United
States $62,077 11% Luxembourg $81,417 18% Spain $46,165 8% France $80,304 17%
Germany $40,784 7% Germany $42,322 9% Luxembourg $40,752 7% United Kingdom
$34,817 8% The Netherlands $35,486 6% “0” reflects amounts rounded to +/- USD
500,000.
SOURCE: IMF Coordinated Direct Investment Survey (CDIS)
The statistics above show Italy’s largest investment partners to be within the
European Union, and the United Kingdom and the United States. This is consistent
with Italy being fully integrated with its transatlantic trading partners.
14. CONTACT FOR MORE INFORMATION
U.S. Embassy Rome
Office of Economic Affairs
Via Vittorio Veneto, 119
Tel. 39-06-4674-2107
RomeECON@state.gov
Mailing Address:
Unit 9500
Attn: Economic Section
DPO, AE 09624
Email: RomeECON@state.gov
Tel: +39 06 4674 2107
VIEW REPORT BY:
Albania Algeria Andorra Angola Antigua and Barbuda Argentina Armenia Australia
Austria Bahamas, The Bahrain Bangladesh Barbados Belarus Azerbaijan Belgium
Belize Bolivia Bosnia and Herzegovina Botswana Brazil Brunei Bulgaria Burkina
Faso Burma Burundi Cabo Verde Cambodia Cameroon Canada Chile China Colombia
Costa Rica Côte d’Ivoire Croatia Cyprus Czechia Democratic Republic of the Congo
Denmark Djibouti Dominica Dominican Republic Ecuador Egypt El Salvador
Equatorial Guinea Eritrea Estonia Eswatini Ethiopia Fiji Finland France Gabon
Gambia, The Georgia Germany Ghana Greece Grenada Guatemala Guinea Guyana Haiti
Honduras Hong Kong Hungary Iceland India Indonesia Iraq Ireland Israel Italy
Jamaica Japan Jordan Kazakhstan Kenya Kosovo Kuwait Kyrgyz Republic Laos Latvia
Lebanon Lesotho Liberia Libya Lithuania Luxembourg Macau Madagascar Malawi
Malaysia Maldives Mali Malta Marshall Islands Mauritania Mauritius Mexico
Micronesia Moldova Mongolia Montenegro Morocco Mozambique Namibia Nepal
Netherlands New Zealand Nicaragua Nigeria North Macedonia Norway Oman Pakistan
Palau Panama Papua New Guinea Paraguay Peru Philippines Poland Portugal Qatar
Republic of the Congo Romania Rwanda Saint Kitts and Nevis Saint Lucia Saint
Vincent and the Grenadines Samoa Sao Tome and Principe Saudi Arabia Senegal
Serbia Seychelles Singapore Slovakia Slovenia Somalia South Africa South Korea
Spain Sri Lanka Suriname Sweden Switzerland Taiwan Tajikistan Tanzania Thailand
Timor-Leste Togo Trinidad and Tobago Tunisia Turkey Turkmenistan Uganda Ukraine
United Arab Emirates United Kingdom Uruguay Uzbekistan Vietnam West Bank and
Gaza Zimbabwe
Italy
ON THIS PAGE
search
>
<
1. EXECUTIVE SUMMARY
2. 1. Openness To, and Restrictions Upon, Foreign Investment
1. Policies Towards Foreign Direct Investment
2. Limits on Foreign Control and Right to Private Ownership and
Establishment
3. Other Investment Policy Reviews
4. Business Facilitation
5. Outward Investment
3. 2. Bilateral Investment and Taxation Treaties
4. 3. Legal Regime
1. Transparency of the Regulatory System
2. International Regulatory Considerations
3. Legal System and Judicial Independence
4. Laws and Regulations on Foreign Direct Investment
5. Competition and Antitrust Laws
6. Expropriation and Compensation
7. Dispute Settlement
1. ICSID Convention and New York Convention
2. Investor-State Dispute Settlement
3. International Commercial Arbitration and Foreign Courts
8. Bankruptcy Regulations
5. 4. Industrial Policies
1. Investment Incentives
2. Foreign Trade Zones/Free Ports/Trade Facilitation
3. Performance and Data Localization Requirements
6. 5. Protection of Property Rights
1. Real Property
2. Intellectual Property Rights
7. 6. Financial Sector
1. Capital Markets and Portfolio Investment
2. Money and Banking System
3. Foreign Exchange and Remittances
1. Foreign Exchange
2. Remittance Policies
4. Sovereign Wealth Funds
8. 7. State-Owned Enterprises
1. Privatization Program
9. 8. Responsible Business Conduct
1. Additional Resources
2. Climate Issues
10. 9. Corruption
1. Resources to Report Corruption
11. 10. Political and Security Environment
12. 11. Labor Policies and Practices
13. 12. U.S. International Development Finance Corporation (DFC), and Other
Investment Insurance or Development Finance Programs
14. 13. Foreign Direct Investment Statistics
15. 14. Contact for More Information
Tags
Bureau of Economic and Business Affairs Bureau of European and Eurasian Affairs
Investment Climate Investment Climate Statements Italy
Back to Top
* White House
* USA.gov
* Office of the Inspector General
* Archives
* Contact Us
follow us
Facebook X Instagram YouTube Flickr GovDelivery
* Privacy Policy
* Accessibility Statement
* Copyright Information
* FOIA
* No FEAR Act
U.S. DEPARTMENT OF STATE
THE LESSONS OF 1989: FREEDOM AND OUR FUTURE
Give feedback
Close
WHAT IS YOUR OVERALL SATISFACTION WITH THIS SITE?
1 2 3 4 5
Have feedback about our website? Note: we can’t address visa or passport issues
through this box.
/1000
Submit
Don't show this again
Cookie Icon
We use cookies to make our website work better and improve your experience. By
continuing to use the site, you agree to our Privacy Policy
Allow Decline
Close
Cookie Preferences
This website uses the following types of services. Learn more from our Cookie
Policy.
Accordion Toggle Close
Strictly Necessary
Always Active
Strictly Necessary services are absolutely necessary for core functions such as
navigating the page or accessing secure areas. The website cannot function
properly without these cookies.
Accordion Toggle Close
Analytics
analytics Toggle
Analytics services serve to improve the performance and functionality of this
website by collecting and reporting information anonymously.
Accordion Toggle Close
Marketing
marketing Toggle
Marketing services are used to track visitors across websites. The intention is
to display ads that are relevant and engaging for the individual user and
thereby more valuable for publishers and third party advertisers.
Allow All Decline
Accept Selected