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Cultivate relationships. Understand the bureaucracy and labor market. Be patient. Those are the ground rules for seeing success in Italy. Besides its legendary culinary scene, rich cultural heritage, and reputation for outstanding hospitality, the world’s eighth-largest economy combines a strategic location with a heavy focus on R&D, innovation, and diverse manufacturing. If you have a presence in Italy, then 500 million consumers across the continent are all within reach.

At a Glance

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Good to Know

  • Italy’s hospitality extends to investors. A committee within the Ministry of Economic Development was established specifically for that purpose. To attract FDI, the government also offers a range of tax credits, incentives, and support.

  • The vibrant education sector is fueling the country’s emphasis on R&D. A growing network of incubators and science/technology parks closely connected to universities and local development agencies has produced countless successful startups. Generous R&D tax credits and a patent box regime also draw foreign companies.

  • The focus on R&D goes hand in hand with the rise of several high-tech sectors. Government support varies by the region and sector but industries such as biotechnology, chemicals, and aerospace tend to attract FDI.

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Top Challenges

Heavy Tax Burden

The corporate tax rate at 24% is on par with other OECD countries, but it doesn’t tell the whole story. Preparing, filing, and paying taxes is a time-consuming endeavor in Italy, demanding over 230 hours per year. When all tax requirements are tallied, the total tax and contribution rate equals an average of 59% of profit.

Cumbersome Bureaucracy

Despite government efforts to cut red tape, businesses are subjected to more laws, rules, and regulations than in most other EU countries. Although starting a business is relatively easy, the cost incurred from notary fees and more is high. Contract enforcement is also slow and anyone seeking a construction permit can expect to complete over a dozen procedures over close to 200 days.

Labor Market Complexity

Labor market regulations are notoriously complex in Italy. Although the government has made efforts to ease labor costs as well as the regulatory burden, companies have to contend with a range of national bargaining agreements. The majority involve splitting salary payments into 13, 14 or 15 installments.

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Next Steps

  • Do you have the in-depth knowledge required to navigate complex labor rules and a slow-moving bureaucracy in Italy? We do. Our team of local experts are here to support your Italian operation, every step of the way.

  • At the core of our unparalleled focus on the customer experience is GateWay, a pioneering platform that unifies all your applications and data for cross-border success in a single place, including Payroll, HR, Accounting, Tax, and Statutory Compliance. It’s your one-stop-shop for global growth.

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Learn More About How We Can Simplify Your Expansion Goals

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