Italy has become a strategic administrative and financial point that attracts investors from all over the planet, thanks to the fact that it has one of the largest markets in the European Union and is positioned as the ninth largest economy on the planet and the third largest in Europe.

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Description of the country's economic outlook


According to estimates from World Bacchus, Italy's economy is one of the largest in the world, with a nominal GDP as of 2020 of US$1,886,445.27 million and more than 60 million inhabitants, it is positioned as the ninth largest economy on the planet and the third of Europe's largest.

This nation has become the administrative and financial strategic point, which attracts investors from all over the planet, thanks to the fact that it has one of the largest markets in the EU, it has a well-diversified economy. According to the Italian Trade Agency (ITA), the nation having a strategic position in the Mediterranean Sea has 40 important ports and 42 airports, which facilitates the connection between Europe, North Africa and the Middle East.

Likewise, Italy has a robust industrial sector, as well as a diversified and strong export system. Another important aspect with which this country supports Foreign Direct Investment (FDI), is through the realization of important registered international exhibitions, known as trade fairs, for example, one of the most important and remembered was Expo Milan 2015, which managed to summon nearly 20 million visitors.

On the other hand, this member country of the European community has a trained workforce with great technical knowledge and experience in high-quality production and in the tourism sector. Additionally, ITA highlights that this country has an efficient transportation system that facilitates interconnection inside and outside the territory; to strengthen connectivity, the Italian Government, through its Ministry of Infrastructure and Transport, has designed the Strategic Plan, which includes the prioritization of strategic public works to promote modal change, enhance the technological dimension of infrastructure and invest in a program solid maintenance, among others.

Along with the above, it should be noted that Italy has one of the most efficient national port systems in Europe, made up of 58 main ports organized into 15 new Port System Authorities, managed by the National Coordination Conference attached to the Ministry of Infrastructure and Transport.

On the other hand, this European member has worked hard to position its Made in Italy brand, through the design and production of original and high-quality products.


Why invest in Italy


Robust intermodal system

Italy is one of the countries in Europe with the best massive network of public and private transport, made up of rail networks, highways, air transport and maritime transport. For example, this nation has more than 130 airports that transport more than 91 million passengers and approximately 750,000 tons of cargo annually. There are structures in the main cities of the country and in its regions, allowing you to connect with the most important cities in Europe and the world. Leonardo Da Vinci Airport, near Rome and one of the main international airports, has an annual traffic of more than 35 million passengers.

The railway network is one of the most widely used systems in this nation, thanks to its easy access and large number of lines that run throughout the peninsula. The trains, which are supervised by the Rete Ferroviaria Italiana, have one of the safest and most extensive railway networks in Europe with its 16,781 km, of which 6,469 km are fundamental lines and 12,018 km are electrified. These roads represent 10.7% of the total in the European Union – the third largest after Germany and France.

Through this railway system, 473 million passengers and 87 million tons of cargo are mobilized annually. Additionally, the high-speed train network currently connects the main Italian cities and is still in the process of expansion.

The road system is the means par excellence for the development of internal trade, so it is always kept in perfect condition to guarantee good service for those who use it. This country has the highest traffic density in the world with almost 38 million vehicles and 315,000 km of roads outside urban areas. The Italian land transport system of highways reaches 6,500 kilometers, where 85% is handled with the toll modality.

The port infrastructure is made up of more than 260 ports located along its coast, especially Livorno, La Spezia, Naples, Palermo, Venice, Trieste and Genoa, the latter recognized as the most important because it receives the largest amount of the country's exports and is the one that concentrates the largest number of commercial transactions. Annually they handle approximately 463 million tons of cargo and 85 million passengers.

A world-class market and economy

Without a doubt, the Italian economy is one of the most developed and mature in the Eurozone, with a well-organized market, made up of approximately 60 million consumers, who have high purchasing power. This makes it an ideal place for exportable supply. Italy is very open to foreign trade, being a major importer of raw materials and semi-finished products, with a very dynamic processing industry and a long export tradition.

The Italian domestic market offers many opportunities, thanks to its inhabitants and a GDP per capita of 36,000 dollars. The net worth of Italian households is 8 times their disposable income (proportionally higher than in the United States, Germany and Canada) and their debt is relatively low, at 82% of their disposable income.

Skilled labor

Without a doubt, Italy has a well-prepared labor force with a more profitable cost than the Eurozone average: only 82% compared to the cost of France and 90% compared to Germany. More than 20 Italian academic institutions are among the ranking of the best 500 universities in the world, with more than 300,000 annual graduates.

Strategic point for manufacturing and international trade

Thanks to its geographical position, Italy becomes an important step in Europe both to receive and to send goods to the American continent. According to data obtained by Eurostat (2021), this nation is listed as the second manufacturing power in Europe.

For more than 30 years, Italy has been Europe's second-largest manufacturing economy after Germany, and sixth or seventh in the world, according to the World Bank. The country is the tenth largest exporter and the eleventh largest importer in the world, where around 57% of GDP is represented by trade.

Italy has a leading position in the surplus of 935 products out of 5,116 goods traded: being in first place for 235 products, second for 377 products and third for 323 products.

Worldwide recognition of machinery and sectors “Made In Italy”

According to ICEX Spain Export and Investment, the machine tool and robotics sector in Italy is an essential gear in the Italian productive sector, it is of great importance in international trade, because it facilitates investment and the technological modernization of all its productive sectors and promotes the economic growth of the country. For this reason it is cataloged as one of the powers of the sector.

Another important sector is Made in Italy, which is a brand of products designed and manufactured in Italy, which are recognized in all markets around the world for their quality, reliability, creativity and the originality of their designs, as well as their resistance and security. According to a market study carried out by the KPMG company, it was determined that it is the third most influential brand in the world. Among the main sectors most recognized internationally are, in addition to machinery: fashion, textiles, jewelry, design, film and food.

Therefore, companies investing in Italy can also count on extensive networks of small and medium-sized companies and many industrial conglomerates throughout the country, with the ability to supply high-quality intermediate products specially adapted to customer needs.

With the middle class of the BRIC economies projected to increase by 800 million people by 2020, according to Goldman Sachs, global demand for “Made in Italy” products is expected to grow in the coming years, assisted by rising prices tourism.

Great opening to foreign investment

According to the World Investment Report 2020 of the United Nations Conference on Trade and Development, the flows of Foreign Direct Investment (FDI) were of the order of 26,500 million USD in 2019. The FDI reserves were in the 445 billion USD in 2019, placing Italy in position 15 among the top 20 host economies of FDI.

Among the main investing nations, according to OECD data are France, the Netherlands, Luxembourg, the United Kingdom and Germany. Italy is experiencing high performance from multinational companies: foreign business entities employ 11% of the total workforce, producing 20% of total domestic consumption, and 26% of exported goods. Investments are directed above all to the manufacturing sector, wholesale and retail trade, professional, financial and insurance activities, and Information Technology.

According to the FDI Confidence Index, Italy ranked 13th in 2017, moving up three places compared to its performance in 2016. Thanks to recent legal reforms, there is much more flexibility when setting up new companies; Italy now precedes Germany in the ranking of the best countries to set up new companies.

Good cultural offer and quality of life

According to the Index for a Better Life, created by the Organization for Economic Co-operation and Development (OECD), Italy scores well in terms of well-being in areas such as the index for a better life, a high average income and heritage, good work-life balance, civic engagement, sense of community, and health status.

Along with the above, one of the main attractions of Italy is found in its cities, which have impressive historical and artistic monuments that, together with their wealth of art, culture, music, food and quality goods generate a satisfactory standard of living.

It is well known in the world that Italy has more world heritage sites than any other country on the planet and this is an important aspect that drives its tourism sector, which amounts to 50 million annual entries.

Italy inspires passion and interest in the world for its heritage, culture, tourism and “Made in Italy” products, which are characterized by unique and attractive brands.

Main taxes

Below you can find some of the main taxes in Italy, if you want to know in detail the country's tax information you can download our Global Taxes App.



Tax on capital gains and dividends


IRES corporation tax

3% to 5,9%

Regional tax on productive activities (IRAP)

5% to 25%

Municipal property tax IMU

0,5% to 15%

Registration Tax

23% to 43%

Personal taxes

27% to 32%

Labor taxes


Tax to added value / VAT


Corporate Tax

4% to 8%

Inheritance and gift taxes

2% to 9%

Transfer taxes


Taxes on income from work

27% to 43%

Income tax (IRPEF)

Sectors of interest and market opportunities

These are the sectors that offer the most investment opportunities in the country and that have the support of the government for their development.


European agricultural leader

Italy is recognized for being one of the main agricultural players in the EU, leading the production of rice, fruits, vegetables and wine. The agricultural sector has a participation of 1.9% in its GDP and is supplied by the import of raw materials used in its agricultural production since its natural resources are limited.

In this sector, according to World Bank estimates, about 4% of the Italian labor force is employed in approximately 1.1 million farms that, according to the FAO, have an average size of 11 hectares. Currently, this country has 12.6 million hectares enabled for the sowing and production of wheat, corn, barley, rice and oats. Additionally, Italy is the world's leading producer of wine, which is highly sought after for its high quality.

In the current context, the Italian Government implemented a series of initiatives to encourage the recovery of this sector, such as:

  • Reduction of taxes and contributions.
  • Improvements in the supply chain to optimize the competitiveness and transparency of contractual relationships.
  • Tax discounts for investments in technological innovation.
  • Compensation and compensatory incentives to mitigate the damage caused to agri-food companies due to natural disasters.
  • Creation of a fund to guarantee the distribution of food products to the most needy people.

At this moment, the government is working on the elaboration of a National Strategic Plan (PSN) of the Post-2022 Common Agricultural Policy that has the participation of the government, social and economic actors and the main associations of the sector, professional organizations, unions, among others.


Renewable energy

Italy has positioned itself as a major player in the new world energy scenario, with its robust renewable energy sector. This has stemmed from its need to find alternative sources of energy, since it depended 75% on foreign energy.

In this way, Italy has become one of the European leaders in the development of alternative energy sources and is considered one of the most attractive world markets for equipment and services for renewable energy generation. Currently there are attractive opportunities for solar, geothermal, wind and energy infrastructure projects.

During 2019, Italian renewable energies covered 40.3% of electricity production and 35.1% of demand in its territory. Within photovoltaic energy, according to estimates from the Italian renewable energy association Anie Rinnovabili, this nation deployed about 436.5 MW of new solar systems. Given the growth, it aims to reach a photovoltaic capacity of 50 GW by 2030.

For its part, this nation is the fifth country in terms of accumulated installations in Europe, with 10 GW of onshore wind energy currently installed. Wind energy supplies 6% of the annual domestic energy demand.


Telecommunications equipment and services

Italy is the second largest market for telecommunications in Western Europe and one of the most developed. The diffusion of mobile phones in Italy is among the highest in the world, with 95 million active SIM cards and more than 46 million users, which represents three quarters of the Italian population. As for the use of the Internet, the market is experiencing stable growth, reaching more than 39 million users and a broadband penetration of more than 22% of the population.

Cloud computing, unified communications, mobile commerce, mobile payment, mobile security solutions, mobile merchandising and services, and mobile applications are among the segments with the best projections in the sector.

Another interesting aspect, according to the Italian Trade Agency (ITA), is the increase in ICT investments in all sectors of the economy, from services to manufacturing, also with a significant presence in the public sector. Here, the Italian technology centers attract international innovative companies that promote technology transfer and contribute to the development of new companies, they are currently located in Lombardy, Liguria, Piedmont, Veneto, Friuli Venezia Giulia, Emilia Romagna, Lazio, Abruzzo and Sicily.


Motorcycle market

Italy has always been the most important European market for new motorcycles and mopeds, as well as the European leader in the manufacture of used two-wheelers. Currently the European motorcycle market has shown significant growth thanks to the Italian drive with 47% more sales.

The country is also a leader in Europe in the manufacture of two-wheeled motor vehicles, with more than half the volume of European production. Although it is complex to identify all the subsectors that present good opportunities for investors, the following are some of them: electronic accessories, clothing and apparel, protection and safety devices, tools and equipment for maintenance parts.

It is important to highlight the excellent market trend in Europe, where motorcycles have achieved a growth of 10.3% in the first quarter of this 2021, while mopeds achieved a growth of 21.6%.


Automovile industry

Without a doubt, the automobile industry is an important gear in the economic development of Italy, which according to ITA generates a significant number of jobs throughout the value chain, from the design of vehicles and their components, to the manufacture and marketing of products. finished inside and outside the country. This industry, regarding production, ranked sixth in Europe and 19th in the world and in the sales segment it was recognized as the fourth largest in Europe and the ninth in the world.

Italy has four main regions for the automotive industry which are:

  • The industrial district of Piedmont, dominated by the FIAT-Chrysler group.
  • “Motor Valley” in Emilia Romagna, specializing in the production of world-renowned Italian luxury brands.
  • Lombardy, epicenter of component manufacturers, especially in the province of Brescia.
  • The automotive industry district of Abruzzo, which is involved in new technological developments for motor vehicles and other types of machineries.

Tourist power

Without a doubt, Italy is an ideal destination and much desired by tourists from around the world, for its cultural and artistic heritage and for its recognized culinary excellence, as well as its extraordinary natural environments. According to government estimates, in recent years they reached the visit of more than 94 million foreign tourists, who spent about 42 million euros in the country, which positively boosted the Italian economy.

Therefore, Italy has more than 33,000 hotels and 400,000 employees, which shows that tourism is one of its fastest growing and most profitable sectors, generating revenues of around 136.1 billion euros. With more than 47.7 million annual tourists, Italy is the fifth country with the highest income from tourism and also the fifth most visited country in the world.

Given this international recognition, the country offers great growth potential and enormous investment opportunities, which can be found in the lodging and infrastructure subsectors, and in restaurants and recreational facilities.


Aerospace industry

Without a doubt, this sector will be one of the pillars of regional economic development in Italy, since according to the Italian Trade Agency (ITA), since, thanks to the technological skills and technical knowledge of Italian aeronautical and space companies, acquired through their participation in the main international research programs, it has allowed them to become one of the critical growth engines for Italy in the sector.

At this time, new technologies derived from aerospace research and development programs are being implemented in other markets such as radar manufacturing and geo-information. For its part, technological advances in aeronautics are used in the production of helicopters and airplanes.

Our advisors in Italy

Italy -  Pirola Pennuto

Pirola Pennuto Zei & Associati

Pirola Pennuto Zei & Associati was established as an association of professionals in the early 1980s and is currently one of the leading independent law firms in Italy.