Italy is the eighth largest economy in the world and continues to grow at a steady rate every year. They are located at the centre of the Mediterranean with an attractive investment culture and reputation for innovation. Italy is also a beautiful country, filled with dynamic cities and possibilities for new ideas and creativity.
However, there are also several challenges to be considered when doing business in Italy. Italy is known for its high taxes, long timelines, and somewhat rocky business environment. If you are moving to Italy for business, hire an immigration lawyer to help you navigate the legal process.
Here are the pros and cons of doing business in Italy and what they could mean for your company.
Advantage: Pro-investment culture
Investors are welcomed into Italy’s economy with open arms. The government offers incentives and tax credits to investors, and there is a high-level government committee focused on gaining investor trust. Tax credits include tax deductions for energy efficiency and income derived from intangible assets.
Challenge: Business environment
Unfortunately, Italy ranked below the EU average for ease of doing business in the global report, Doing Business 2020. Starting a business in Italy typically costs more than the EU average. There are several governmental procedures to go through, which can take time, money, and effort.
Advantage: Strategic logistics hub
Italy is in the centre of the Mediterranean and has connections with the European Union, Northern Africa, and the Middle East. A whopping 30% of fuel traffic and 25% of container traffic come through Italy’s ports. 432 million tonnes of goods move through Italy’s ports and airports, making it a central European logistics hub.
Challenge: High taxes
Italy has a complex tax system that requires companies to make 15 payments per year, totalling 269 hours on dealing with taxes. There are various taxes for companies to pay, including corporate income tax, sales tax, labour taxes and social contributions.
Italy hones a network of innovation, particularly in the fields of science and technology. These networks are linked with multiple universities and local development agencies that aim to share new knowledge and market innovative technology.
Challenge: Long construction timelines
Italians like to take their time. Permits for construction can take much longer and cost you much more than in other EU countries. In fact, you may need to complete 14 procedures over 198 days just to get a permit. However, each city interprets the law differently, and it can be quicker (or longer) in some areas. If you are planning a construction project, make sure to plan for these delays and added expenses.
Working in Italy can be a wonderful experience – just make sure to plan for a few roadblocks along the way.