In this page: FDI in Figures | What to consider if you invest in Italy | Protection of Foreign Investment | Procedures Relative to Foreign Investment | Office Real Estate and Land Ownership | Investment Aid | Investment Opportunities | Sectors Where Investment Opportunities Are Fewer | Finding Assistance For Further Information
According to the World Investment Report 2021 by UNCTAD, FDI inflows dropped sharply to USD -388 million in 2020, down from USD 18 billion in 2019. This was mostly due to the early outbreak of the COVID-19 pandemic, with Italy being the first country in Europe to be affected by the spreading of the virus (and the first one to recur to lockdowns). In the same year, the stock of FDI was about USD 486 billion. Investments are mainly directed to manufacturing, professional, scientific and technical activities, wholesale and retail trade, financial activities and insurance, and ICT. According to the latest data, the two most attractive sectors for foreign investors in 2020 were business services (13%) and software and IT services (12%) (EY). Also growing compared to one year earlier were logistics and wholesale (12%), financial services (8%) and pharmaceuticals (7%). Furthermore, of the total of 113 new projects directly financed by foreign investors in 2020, 22% were in the area of sales and marketing (EY). The main investing countries are Luxembourg (19.8%), France (18%), the Netherlands (17.1%) and the UK (13.8% - OECD statistics). According to the latest figures from OECD, in the first half of 2021 total investments to Italy stood at USD 6.7 billion, up from a negative flow of USD 4.6 billion in the same period one year earlier.
Among the reasons to invest in Italy, there is the fact that the country has one of the biggest markets in the EU, it has a diversified economy and a skilled workforce, it is one of the main manufacturing countries in the world and has good infrastructures and a strategic position, at the crossroads between Europe, Northern Africa and the Middle East. Nevertheless, high procedural and tax costs and slow administrative processes, high labour costs, regional disparities, corruption and organised crime are still among the factors that hinder investments to the country. In order to foster Italy’s attractiveness, the government created “InvestItalia”, an agency dependent on the Prime Minister which coordinates Italy’s promotion activities to attract foreign direct investments. Furthermore, the government allocated EUR 23.8 billion in 2021-2023 for the “Industry 4.0” plan aimed at improving the Italian industrial sector’s competitiveness through a mix of policy measures, tax credits, and research and infrastructure funding. Finally, the country’s government amended the “Golden Power” law, which gives it authority to block foreign acquisitions of companies operating in strategic sectors (as happened in the 5g networks sector). Italy ranks 58th in the latest Doing Business report of the World Bank, losing seven positions compared to the previous edition.
Foreign Direct Investment | 2019 | 2020 | 2021 |
---|---|---|---|
FDI Inward Flow (million USD) | 18,146 | -23,622 | 8,487 |
FDI Stock (million USD) | 443,554 | 472,685 | 454,910 |
Number of Greenfield Investments* | 222 | 167 | 230 |
Value of Greenfield Investments (million USD) | 6,951 | 7,109 | 7,594 |
Source: UNCTAD, Latest available data.
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
Main Investing Countries | 2019, in % |
---|---|
Luxembourg | 19.8 |
France | 18.0 |
Netherlands | 17.1 |
United Kingdom | 13.8 |
Germany | 9.2 |
Switzerland | 5.7 |
Spain | 2.8 |
Belgium | 2.7 |
Main Invested Sectors | 2019, in % |
---|---|
Manufacturing | 24.7 |
Professional, scientific and technical activities | 22.0 |
Wholesale and retail trade; repair of motor vehicles and motorcycles | 11.3 |
Financial and insurance activities | 10.0 |
Information and communication | 6.3 |
Real estate | 4.9 |
Administrative and support service activities | 3.5 |
Source: OECD Stats Extracts - Latest available data.
The strong points of Italy in terms of foreign investment include:
The key weak points of Italy in terms of foreign investment include :
The Italian Trade Agency's Invest in Italy website provides guidance on investing and setting up a business in the country.
Country Comparison For the Protection of Investors | Italy | OECD | Stati Uniti | Germania |
---|---|---|---|---|
Index of Transaction Transparency* | 7.0 | 6.5 | 7.0 | 5.0 |
Index of Manager’s Responsibility** | 4.0 | 5.3 | 9.0 | 5.0 |
Index of Shareholders’ Power*** | 6.0 | 7.3 | 9.0 | 5.0 |
Source: Doing Business - Latest available data.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
For further information, consult the ICE website.
The Reasoned Handbook on Incentives has been issued by the Ministry of Economic Development with the aim of helping entrepreneurs to find the right incentive for their needs, their territory or the size of their business.
In the automobile sector, Italy distinguishes itself in design, technology and skills, with avant-garde research centres. The automobile market is constantly expanding and is attractive to foreign manufacturers.
The Italian chemical industry is one of the country's most dynamic sectors (with a strong propensity for innovation, highly qualified human resources and large multinationals who have chosen the peninsula to set up their business). Italy is the third-largest European producer in the chemical sector and a prominent actor on the world stage. In a country where volumes of production and consumption of agri-food products and beverages are the largest in Europe, tradition and innovation create new opportunities to conquer new foreign markets. The country is characterised by a tradition of typical products, culinary dishes and wines well-known all over the world, and very high-level standards of quality and safety.
Italy has many investment opportunities in new technologies: nanotechnologies, biotechnologies, high tech products, etc. Italy also enjoys a favourable and stimulating environment to develop Life Science projects (competitive costs, simple standards, search for excellence). Italy is also a logistical platform for international trade, with new investments and the best transport and telecommunications infrastructures around the Mediterranean. Finally, Italy is the fourth most-popular tourist destination in the world, an industry worth around € 70 billion a year.
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Latest Update: January 2023