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 UNCTAD’s 2022 World Investment Report, after dropping during the COVID-19 pandemic outbreak (with a divestment of USD 23.6 billion in 2020), FDI inflows towards Italy gained pace in 2021 and stood at USD 8.5 billion. In the same year, the stock of FDI totalled USD 454 billion. According to the Europe Attractiveness Survey 2022 published by EY, Italy saw 207 new FDI projects lunched in 2021, marking a 83% increase over the previous year. Most of the new projects were directed towards the software and IT sector (15%), followed by transport and logistics (14%), and B2B services (12%). Overall, data from the Bank of Italy shows that the majority of FDI stock is held by France (22.2%), the U.S. (10.4%), Germany (8.3%) and the UK (7.3%). In terms of sectors, manufacturing holds 29.1% of the total FDI stock, followed by professional, scientific and technical activities (15%), information and communication (10.9%), financial and insurance activities (9.8%), and wholesale and retail trade (8.8% - data OECD). According to the latest figures from OECD, in the first half of 2022 total investments to Italy stood at USD 9.3 billion, up from USD 0.4 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, 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 (defense/national security, energy, transportation, telecommunications including 5G and cloud computing, critical infrastructure, sensitive technology, and nuclear and space technology). Italy ranks 39th out of 82 countries in the Economist Business Environment ranking, and 41st out of 63 in the World Competitiveness Ranking.
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 | United States | Germany |
---|---|---|---|---|
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: June 2023