flag Italy Italy: Investing

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


FDI in Figures

According to UNCTAD’s World Investment Report 2023, FDI inflows towards Italy gained pace in 2022 and stood at USD 19.9 billion, after recording negative flows in the last couple of years. Meanwhile, the stock of FDI totalled USD 448.5 billion, around 22.3% of the country’s GDP. Data from the Bank of Italy shows that the majority of FDI stock is held by the Netherlands (23.7%), Luxembourg (17.7%), France (17.6%), Germany (9.2%), the UK (7.6%), and Switzerland (6.1%). 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 Europe Attractiveness Survey 2023 published by EY, the number of investment projects in Italy has more than doubled compared to the pre-COVID situation: in 2022, 243 FDI projects were announced, representing a 17% increase from one year earlier. As per the latest figures from OECD, in the first half of 2023 total investments in Italy stood at USD 10.8 billion, down from USD 18.6 billion in the same period the previous year.

Among the reasons to invest in Italy, 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. The National Resilience and Recovery Plan (NRRP) of Italy, spanning from 2021 to 2026, leverages more than EUR 200 billion in EU funds. The plan aims to expedite the digital and green transitions while implementing comprehensive reforms to tackle longstanding impediments to growth in the Italian economy. Overall, foreign companies account for 18% of the Italian GDP and 14% of investments (data U.S. Department of State). Nevertheless, high procedural and tax costs slow administrative processes, labour costs, regional disparities, corruption and organised crime are still among the factors that hinder investments in 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. Finally, the country’s government amended the “Golden Power” law, which gives it authority to block foreign acquisitions of companies operating in strategic sectors (defence/national security, energy, transportation, telecommunications including 5G and cloud computing, critical infrastructure, sensitive technology, and nuclear and space technology). Italy ranks 41st out of 63 in the World Competitiveness Ranking. Furthermore, it ranks 26th among the 132 economies on the Global Innovation Index 2023 and 69th out of 177 countries on the 2023 Index of Economic Freedom.

Foreign Direct Investment 202020212022
FDI Inward Flow (million USD) -23,622-8,95619,947
FDI Stock (million USD) 490,197449,962448,493
Number of Greenfield Investments* 169236274
Value of Greenfield Investments (million USD) 10,02219,84825,437

Source: UNCTAD, Latest data available.

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 data available.

Main Foreign Companies
According to the latest data available, the Italian Trade Agency counted 12 743 Foreign Invested Enterprises in Italy in 2015, these companies employed 1,210,239 people with a turnover of 573.1 billion euros. 
Sources of Statistics
ITA (Italian Trade Agency)
Invitalia (Italian agency for investment promotion)

Return to top

What to consider if you invest in Italy

Strong Points

The strong points of Italy in terms of foreign investment include:

  • Italy has a strong and still important industrial sector (22.6% of GDP in 2021, latest data available by World Bank) as well as a strong and diversified export ecosystem.
  • Italian SMEs are very competitive with exports.
  • Italy hosts major trade shows that attract buyers from all over the world. For example, Salone del Mobile in Milan attracted around 270,000 visitors from all over the world in 2022.
  • Very good infrastructure (although disparate depending on the region)
  • Skilled workforce with technical knowledge and experience in high quality production and tourism.
  • The government has been pursuing a strategic economic repositioning: the government resulting from the coalition between the Five Stars Movement and the centre-left Democratic Party in 2019 has as its main objectives the innovation and digitisation of the Public Administration, the strengthening of exports by identifying the most suitable tools to promote Made in Italy, and a more intense coordination between universities and research entities.
  • Labour market and banking sector reforms have been implemented and are beginning to bear fruit.
Weak Points

The key weak points of Italy in terms of foreign investment include : 

  • High procedural costs and slow administrative processes that significantly slow down the process of starting a business 
  • A fragile banking system
  • Weak enforcement of intellectual property rights
  • Corruption and organised crime that impact business confidence and thus significantly slow down investment and development 
  • Labour costs are high and productivity has barely increased over the past 15 years; a fact that can be explained, among other things, by Italy's specialisation in low and medium value added sectors
  • State investment in R & D remains low
  • Private and public debts are high and create a rigid business environment because the state has to impose heavy taxes.
  • Unemployment remains large (9.3% in 2022, IMF) and hampers household confidence.
  • Regional disparity between north and south is fairly pronounced: for example, infrastructure in some regions, particularly in the South, is poor.
  • Political instability
Government Measures to Motivate or Restrict FDI
The Government supports FDI via tax credits. Companies investing in strategic intangible assets can benefit from a tax credits of 15%, whereas those investing in machinery and capital goods qualify for a tax credit of 20-40%. Further public support is granted to new investments in manufacturing and R&D, especially in southern regions and in Special Economic Zones.
The “Industria 4.0” plan aims at boosting private investment in research and development. “Industria 4.0” essentially translates into a series of measures, economic incentives for the digital development of businesses: these include hyperamortisation, superamortisation and soft loans for innovative start-ups.
Companies that make investments in new machinery, plant or equipment for productive use and digital technologies can benefit “Nuova Sabatini" Law facilities. It is an important part of the Industry Plan 4.0 and consists of a contribution by the government to partially cover the interest paid by the company on bank loans relating to the investments made. In order to support the investments of companies that have difficulty in accessing credit, the Industria 4.0 plan has a special instrument: the Guarantee Fund. It aims at facilitating access to sources of finance (loan/grant) for SMEs through the provision of a public guarantee (up to a maximum of 80% of the financing), that works alone or in conjunction with other guarantees and securities.

The Italian Trade Agency's Invest in Italy website provides guidance on investing and setting up a business in the country.

Return to top

Protection of Foreign Investment

Bilateral Investment Conventions Signed By Italy
Italy has signed bilateral investment treaties (BITs) with fifty or so countries. To see the conventions, click here.
International Controversies Registered By UNCTAD
The ISDS Navigator contains information about known international arbitration cases initiated by investors against States pursuant to international investment agreements. Italy is involved in 39 cases as Home State of claimant and in 11 cases as Respondent State.
Organizations Offering Their Assistance in Case of Disagreement
ICCWBO , International Chamber of Commerce Arbitration
ICSID , International Center for settlement of Investment Disputes
Member of the Multilateral Investment Guarantee Agency
Italy is a signatory to the MIGA Convention.
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: The World Bank - Doing Business, Latest data available.

Return to top

Procedures Relative to Foreign Investment

Freedom of Establishment
As a member of the European Union, Italy applies the principle of freedom of establishment and non-discrimination. Thus, foreign investors can carry out any type of activity in the same conditions as a local investor. In addition, no specific legal text governs foreign direct investment. The regime is in alignment with that applicable to local investment.
Acquisition of Holdings
Acquiring a majority holding in the capital of a local company is authorised in Italy, except in certain sectors (such as telecommunication and energy).
Obligation to Declare
Italian Trade Agency, the agency responsible for the promotion of foreign investment in the country, gives information about the authorisations necessary for setting up business.
Requests For Specific Authorisations
Foreign investors are subject to particular measures (prior authorisation issued by the competent ministry and restrictions concerning the permitted amount of equity acquisitions) in the following sectors:
- telecommunications and press
- airline and shipping companies
- electricity and gas
- petroleum exploitation

For further information, consult the ICE website.

Return to top

Office Real Estate and Land Ownership

Possible Temporary Solutions
Companies can temporarily rent a fully equipped office on various online sites:,, Coworker.
The Possibility of Buying Land and Industrial and Commercial Buildings
Foreign investors can become the owners of land on which they set up their business. However, acquiring real estate must be carried out through companies set up specifically for this.
For further information, consult the agencies specialized in the real estate sector
Risk of Expropriation
The Italian constitution allows private property to be expropriated for public purposes and compensation is provided.

Return to top

Investment Aid

Forms of Aid
The majority of regional aids granted to companies concern the regions of the Mezzogiorno (south of Rome, including Sardinia and Sicily). Eligible projects must enable existing companies to be modernized and developed, new technologies to be integrated and/or local resources to be exploited. The Decree Law No. 34 of 2020 increased the tax credit rate for investments in research and development for companies operating in the regions of Southern Italy (Article 244), a measure that is also extended to the regions affected by the 2016-2017 earthquakes. The 2020 budget law regulated the tax credit for investments in research and development, ecological transition, technological innovation 4.0 and other innovative activities to support the competitiveness of companies. Finally, aid for research and development can be granted by the Ministry of Economic Development and the Ministry of Education, Universities and Research.

The Italian Trade Agency and the Ministry of Economic Development list and make available a guide to aids for setting up business in Italy.
Privileged Domains
The Italian Trade Agency and the Ministry of Economic Development list and make available a guide to aids for setting up business in Italy.
A new initiative of the Italian government will make it possible to attract new investment to Tuscany in many sectors linked to information and communication technologies (ICT).
Privileged Geographical Zones
The State favors investment in certain regions. There are aids for the creation of companies in the less developed regions (principally in the regions of southern Italy). For example, companies investing in Basilicata, Calabria, Campania, Puglia, Sicily, Molise and Abruzzo within the end of 2020, can benefit of a tax credit of 25%, 35% or 45% depending on the size of the company.
The government encourages investment in Industry 4.0: companies investing in tangible and intangible capital goods according to the Industry 4.0 national strategy can benefit from a wide range of tax credits. In addition, the aid is aimed at stimulating companies' investments regarding training paths about Industry 4.0 “enabling technologies”. Other public incentives are addressed to industrial research projects and experimental development activities in the following sectors: Italian digital agenda, Sustainable industry, Smart Factory, Agrifood, Life Science.

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.

Free-trade zones
The Italian Special Economic Zones (SEZs) are located in Basilicata, Calabria, Campania, Puglia, Sicily (seaports, inland ports, airports, production areas, logistic platforms and intermodal freight villages).
Public aid and funding organisations
Ministry of Economic Development

Return to top

Investment Opportunities

The Key Sectors of the National Economy
Italy has a very large presence in the aerospace sector (it is a leading producer of helicopters, a partner in the project for the construction of the international space station, etc.).

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.

High Potential Sectors
Health and well-being, aeronautics, transport, arms industry and naval sector, energy, real estate, tourism, food industry.
Privatization Programmes
Airline companies, railways, natural gas.
Tenders, Projects and Public Procurement
Ted - Tenders Electronic daily, Business Opportunities in the European Union
DgMarket, Tenders Worldwide

Return to top

Sectors Where Investment Opportunities Are Fewer

Monopolistic Sectors
Defense, tobacco, energy networks.

Return to top

Finding Assistance For Further Information

Investment Aid Agency
Invitalia (National Agency for Inward Investment and Economic Development, Italian Ministry of Economy)
Other Useful Resources
Italian Trade Agency (ITA)
Confindustria (association of manufacturing and service companies in Italy)
Doing Business Guides
Investment Guide (Italian Trade Agency)
Doing business in Italy (Thomson Reuters Practical Law)
Doing Business Report - Italy (World Bank)
Italian Business Guide (gateway to the Italian manufacturing suppliers)
Investment Climate in Italy - US Department of State

Return to top

Any Comment About This Content? Report It to Us.


© eexpand, All Rights Reserved.
Latest Update: February 2024