Policies Towards Foreign Direct Investment

Italy welcomes foreign direct investment (FDI).  As a European Union (EU) member state, Italy is bound by the EU’s treaties and laws.  Under EU treaties with the United States, as well as OECD commitments, Italy is generally obliged to provide national treatment to U.S. investors established in Italy or in another EU member state.

EU and Italian antitrust laws provide Italian authorities with the right to review mergers and acquisitions for market dominance.  In addition, the Italian government may block mergers and acquisitions involving foreign firms under its investment screening authority (known as “Golden Power”) if the proposed transactions raise national security concerns.  Enacted in 2012 and further implemented through decrees or follow-on legislation in 2015, 2017, 2019 and 2020, the Golden Power law allows the Government of Italy (GOI) to block foreign acquisition of companies operating in strategic sectors: defense/national security, energy, transportation, telecommunications, critical infrastructure, sensitive technology, and nuclear and space technology.  In March 2019, the GOI expanded the Golden Power authority to cover the purchase of goods and services related to the planning, realization, maintenance, and management of broadband communications networks using 5G technology.  Under the April 6, 2020 Liquidity Decree the Prime Minister’s Office issued, the government strengthened Italy’s investment screening authority to cover all sectors outlined in the EU’s March 2019 foreign direct investment screening directive.  The decree also extends (at least until June 30, 2021) Golden Power review to certain transactions by EU-based investors and gives the government new authorities to investigate non-notified transactions.

The Italian Trade Agency (ITA) is responsible for foreign investment attraction as well as promoting foreign trade and Italian exports.  According to the latest figures available from the ITA, foreign investors own significant shares of 12,768 Italian companies.  As of 2019, these companies had overall sales of €573.6 billion and employed 1,211,872 workers.  ITA operates under the coordination of the Italian Ministry of Economic Development and the Ministry of Foreign Affairs.  As of April 2021, ITA operates through a network of 79 offices in 65 countries.  ITA promotes foreign investment in Italy through Invest in Italy program: http://www.investinitaly.com/en/.  The Foreign Direct Investment Unit is the dedicated unit of ITA for facilitating the establishment and development of foreign companies in Italy.

While not directly responsible for investment attraction, SACE, Italy’s export credit agency, has additional responsibility for guaranteeing certain domestic investments.  Foreign investors – particularly in energy and infrastructure projects – may see SACE’s project guarantees and insurance as further incentive to invest in Italy.

Additionally, Invitalia is the national agency for inward investment and economic development operating under the Italian Ministry of Economy and Finance.  The agency focuses on strategic sectors for development and employment.  Invitalia finances projects both large and small, targeting entrepreneurs with concrete development plans, especially in innovative and high-value-added sectors.  For more information, see https://www.invitalia.it/eng.  The Ministry of Economic Development (https://www.mise.gov.it/index.php/en/) within its Directorate for Incentives to Businesses also has an office with some responsibilities relating to attraction of foreign investment.

Italy’s main business association (Confindustria) also helps companies in Italy:  https://www.confindustria.it/en.

Limits on Foreign Control and Right to Private Ownership and Establishment

Under EU treaties and OECD obligations, Italy is generally obliged to provide national treatment to U.S. investors established in Italy or in another EU member state.  EU and Italian antitrust laws provide national authorities with the right to review mergers and acquisitions over a certain financial threshold.  The Italian government may block mergers and acquisitions involving foreign firms to protect the national strategic interest or in retaliation if the government of the country where the foreign firm is from applies discriminatory measures against Italian firms.  Foreign investors in the defense and aircraft manufacturing sectors are more likely to encounter resistance from the many ministries involved in reviewing foreign acquisitions than are foreign investors in other sectors.

Italy maintains a formal national security screening process for inbound foreign investment in the sectors of defense/national security, transportation, energy, telecommunications, critical infrastructure, sensitive technology, and nuclear and space technology through its “Golden Power” legislation.  Italy expanded its Golden Power authority in March 2019 to include the purchase of goods and services related to the planning, realization, maintenance, and management of broadband communications networks using 5G technology.  On April 6, 2020 the GOI passed a Liquidity Decree in which the Prime Minister’s office made three main changes to its Golden Power authority to prevent the hostile takeover of Italian firms as they weather the financial impact of the COVID-19 crisis.  First, under the decree Golden Power authority now encompasses the financial sector (including insurance and credit) and all the sectors listed under the EU’s March 19, 2019 regulations establishing a framework for the screening of foreign direct investment.  The Italian government previously had adopted only some of the sectors in the EU regulations when it passed its National Cybersecurity Perimeter legislation in November 2019.  The EU regulations cover:  (1) critical infrastructure, physical or virtual, including energy, transport, water, health, communications, media, data processing or storage, aerospace, defense, electoral or financial infrastructure, and sensitive facilities, as well as land and real estate; (2) critical technologies and dual use items, including artificial intelligence, robotics, semiconductors, cybersecurity, aerospace, defense, energy storage, quantum and nuclear technologies, and nanotechnologies and biotechnologies; (3) supply of critical inputs, including food security, energy, and raw materials; (4) access to sensitive information; and (5) freedom of the media.

Second, until the end of the COVID-19 pandemic, EU-based investors must notify Italy’s investment screening authority if they seek to acquire, purchase significant shares in, or change the core activities of an Italian company in one of the covered sectors.  Previously EU-based investors had to notify the government only of transactions deemed strategic to national interests, such as in the defense sector.  Third, the government now has the power to investigate non-notified transactions and require that both public and private entities cooperate with the investigation.  In addition to being able to fine companies for non-notified transactions, the government can impose risk mitigation measures for non-notified transactions.  An interagency group led by the Prime Minister’s office reviews acquisition applications and makes recommendations for Council of Ministers’ decisions.

Other Investment Policy Reviews

The OECD published its Economic Survey for Italy in April 2019.  See https://www.oecd.org/economy/surveys/Italy-2019-OECD-economic-survey-overview.pdf.

Business Facilitation

Italy has a business registration website, available in Italian and English, administered through the Union of Italian Chambers of Commerce:  http://www.registroimprese.it.  The online business registration process is clear and complete, and available to foreign companies.  Before registering a company online, applicants must obtain a certified e-mail address and digital signature, a process that may take up to five days.  A notary is required to certify the documentation.  The precise steps required for the registration process depend on the type of business being registered.  The minimum capital requirement also varies by type of business. Generally, companies must obtain a value-added tax account number (partita IVA) from the Italian Revenue Agency; register with the social security agency (Istituto Nazionale della Previdenza Sociale– INPS); verify adequate capital and insurance coverage with the Italian workers’ compensation agency (Istituto Nazionale per L’Assicurazione contro gli Infortuni sul Lavoro – INAIL); and notify the regional office of the Ministry of Labor.  According to the World Bank Doing Business Index 2020, Italy’s ranking decreased from 67 to 98 out of 190 countries in terms of the ease of starting a business:  it takes seven procedures and 11 days to start a business in Italy.  Additional licenses may be required, depending on the type of business to be conducted.

Invitalia and the Italian Trade Agency’s Foreign Direct Investment Unit assist those wanting to set up a new business in Italy.  Many Italian localities also have one-stop shops to serve as a single point of contact for, and provide advice to, potential investors on applying for necessary licenses and authorizations at both the local and national level.  These services are available to all investors.

Outward Investment

Italy neither promotes, restricts, nor incentivizes outward investment, nor restricts domestic investors from investing abroad.

Italy does not have a bilateral investment treaty (BIT) with the United States.

Italy has bilateral investment agreements with the countries listed below.  (Additional information and the text of the agreements are available at the following website:  http://investmentpolicyhub.unctad.org/IIA/CountryBits/103.)

Albania, Angola, Argentina, Bahrain, Bangladesh, Barbados, Belize (signed, not in force), Brazil (signed, not in force), Cameroon, Cape Verde (signed, not in force), Chad, Chile, China, Congo, Cote d’Ivoire (signed, not in force),  Cuba, Democratic Republic of Congo (signed, not in force), Djibouti, Dominican Republic, Egypt, Eritrea, Ethiopia,  Gabon, Ghana (signed, not in force), Guatemala, Guinea, Hong Kong, Iran, Jamaica, Democratic People’s Republic of Korea  (signed, not in force),  Republic of Korea, Republic of Kuwait, Lebanon, Libya, Malawi, Malaysia, Malta (signed, not in force), Mauritania, Mexico, Republic of Mongolia, Morocco, Mozambique, Namibia, Nicaragua, Nigeria, Oman, Pakistan, Panama, Paraguay, Peru, Philippines, Qatar, Russian Federation, Saudi Arabia, Senegal, Serbia (signed, not in force), Sri Lanka, Sudan (signed, not in force), Tanzania, United Republic of Tunisia, Turkey, Turkmenistan (signed, not in force), United Arab Emirates, Uruguay, Venezuela (signed, not in force), Vietnam, Yemen, Zambia, Zimbabwe (signed, not in force).

Italy has not ratified a BIT since 2009 and has not negotiated a BIT since 2014.  Since 2009, investment treaty negotiations fall within the competence of the EU:  http://ec.europa.eu/trade/policy/accessing-markets/investment/.

Likewise, Italy’s FTA negotiations are handled at the EU level:  http://ec.europa.eu/trade/policy/.

Italy shares a bilateral taxation treaty with the United States.  The text of the treaty is available at:  https://www.irs.gov/businesses/international-businesses/united-states-income-tax-treaties-a-to-z.

Real Property

According to the World Bank 2020 Doing Business Index, Italy ranks 26 worldwide out of 190 economies for the ease of registering property.  Real property registration takes an average of 16 days, requires four procedures, and costs an average of 4.4 percent of the value of the property.  Real property rights are enforced in Italian courts.  Mortgages and judgment liens against property exist in Italy and the recording system is reliable.  Although Italy does not publish official statistics on property with titling issues, the Embassy estimates that less than 10 percent of the land in Italy lacks clear title.  Italian law includes provisions whereby peaceful and uninterrupted possession of real property for a period of 20 years can, under certain circumstances, allow the occupying party to take title to a property.

Intellectual Property Rights

USTR removed Italy from its Special 301 Watch List in 2014 after the Italian Communications Authority (AGCOM) issued a new regulation to combat digital copyright theft.  The regulation created a process by which rights holders can report online infringements to AGCOM, which will then block access to the domestic and international sites hosting infringing content.  This reduced the need for lengthy litigation.  Authorities further strengthened the system in 2018 when they adopted new measures to prevent previously blocked websites from opening under different domain names.  AGCOM is working to further expand application of the regulation.  Italian copyright stakeholders report satisfaction with the AGCOM’s action and note improved judicial action by magistrates.  Counterfeiting remains an issue, but it is in Italy’s interest to protect the “Made in Italy” branding and, accordingly, Italian law enforcement reportedly is active in combatting this phenomenon.  USTR’s Notorious Market List includes two domains reportedly located in Italy that host infringing content.

The Italian customs agency, Agenzia Dogane Monopoli (ADM), has an active enforcement posture at Italian ports of entry for interdicting the importation of counterfeit and substandard goods into Italy and the European Union.  In 2019, the last year for which full data is available, ADM seized over 10,000 tons of counterfeit goods at ports of entry with a retail value of €1.97 billion (with fines of €144 million).

The Republic of San Marino (covered by U.S. Embassy Rome) is home to an ongoing transnational case involving ‘legal fakes’ of a U.S. brand, SUPREME.  According to the complaint, a San Marino-based company applied to register the SUPREME trademark with the San Marino Trademark Office in November 2015 through UK-registered International Brand Firm Ltd. (IBF).  According to SUPREME, IBF was able to obtain trademark registrations with the World Intellectual Property Organization and in several third countries.  Owning a national trademark, for example, a U.S. trademark, does not automatically lead to worldwide trademark protection against copycats.  IBF is now using these registrations as the legal basis for the production and distribution of the SUPREME trademark-infringing products internationally.  There are proceedings pending before the European Intellection Property Office (EUIPO) on the legality of IBF’s trademark registration.

In June 2019, the European Observatory for Intellectual Property Rights, based in Spain, launched a new single EU platform for IPR protection issues.  EUIPO handles the registration of trademarks, designs, and models valid in all 27 EU member states.  EUIPO has also consolidated three databases for case tracking, enforcement, and anti-counterfeiting intelligence.

For additional information about treaty obligations and points of contact at local IPR offices, please see the World Intellectual Property Organization’s country profiles at http://www.wipo.int/directory/en/.

There is a general awareness of expectations and standards for responsible business conduct (RBC) in Italy.  Enforcement of civil society disputes with businesses is generally fair, though the slow pace of civil justice may delay individuals’ ability to seek effective redress for adverse business impacts.  In addition, EU laws and standards on RBC apply in Italy.  In the event Italian courts fail to protect an individual’s rights under EU law, it is possible to seek redress at the European Court of Justice (ECJ).

CONSOB has enacted corporate governance, accounting, and executive compensation standards to protect shareholders.  Information on corporate governance standards is available at: https://www.consob.it/c/portal/layout?p_l_id=892052&p_v_l_s_g_id=0 .

As an OECD member, Italy supports and promotes the OECD Guidelines for Multinational Enterprises (“Guidelines”), which are recommendations by governments to multinational enterprises for conducting a risk-based due diligence approach to achieve responsible business conduct (RBC).  The Guidelines provide voluntary principles and standards in a variety of areas including employment and industrial relations, human rights, environment, information disclosure, competition, consumer protection, taxation, and science and technology.   (See OECD Guidelines: http://www.oecd.org/dataoecd/12/21/1903291.pdf). The Italian National Contact Point (NCP) for the Guidelines is in the Ministry of Economic Development.  The NCP promotes the Guidelines; disseminates related information; and encourages collaboration among national and international institutions, the business community, and civil society.  The NCP also promotes Italy’s National Action Plan on Corporate Social Responsibility which is available online.  See Italian NCP: http://pcnitalia.sviluppoeconomico.gov.it/en/.

Independent NGOs and unions operate freely in Italy.  Additionally, Italy’s three largest trade union confederations actively promote and monitor RBC.  They serve on the advisory body to Italy’s NCP for the OECD Guidelines for Multinational Enterprises.

Italy encourages adherence to OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Afflicted and High-Risk Areas and has provided operational guidelines for Italian businesses to assist them in supply chain due diligence.  Italy is a member of the Extractive Industries Transparency Initiative (EITI).  The Italian Ministry of Foreign Affairs works internationally to promote the adoption of best practices.

Additional Resources 

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities and;
• North Korea Sanctions & Enforcement Actions Advisory

Department of Labor

• Findings on the Worst Forms of Child Labor Report;
• List of Goods Produced by Child Labor or Forced Labor.
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World and;
• Comply Chain.

Corruption and organized crime continue to be significant impediments to investment and economic growth in parts of Italy, despite efforts by successive governments to reduce risks.  Italian law provides criminal penalties for corruption by officials.  The government has usually implemented these laws effectively, but officials sometimes have engaged in corrupt practices with impunity.  While anti-corruption laws and trials garner headlines, they have been only somewhat effective in stopping corruption.  Since 2014, Italy has improved its overall rank and score in Transparency International’s Corruption Perceptions Index, reaching a rank of 52 in the 2020 Index.  Italy has made improvements in strengthening its institutions and public administration, but Transparency International assesses that the COVID 19 emergency has undermined the efficiency of Italy’s anti-corruption and transparency efforts.  The organization cited weaknesses in regulation and oversight procedures for the use of the over €200 billion in Next Generation EU funds Italy expects to receive to spur its economic recovery – funds to be allocated in digitalization, green transition, infrastructures, education/research and social inclusion.

In December 2018 Italy’s Parliament passed an anti-corruption bill that introduced new provisions to combat corruption in the public sector and regulate campaign finance.  The measures in the bill changed the statute of limitations for corruption-related crimes as well as other crimes and made it more difficult for people to “run out the clock” on their respective cases.  Italy’s anti-money laundering laws also apply to public officials, defined as people entrusted with important political functions, as well as their immediate family members.  (This includes officials ranging from the head of state to members of the executive bodies of state-owned companies.)  In 2019 the government passed an anti-corruption measure, called “spazza-corrotti,” giving the same treatment for political parties and related foundations, strengthening the penalties for corruption crimes against public administration, and providing more tools for investigations.

U.S. individuals and firms operating or investing in foreign markets should take the time to become familiar with the anticorruption laws of both the foreign country and the United States to comply with them and, where appropriate, U.S. individuals and firms should seek the advice of legal counsel.

While the U.S. Embassy has not received specific complaints of corruption from U.S. companies operating in Italy in the past year, commercial and economic officers are familiar with high-profile cases that may affect U.S. companies.  The Embassy has received requests for assistance from companies facing a lack of transparency and complicated bureaucracy, particularly in the sphere of government procurement and specifically in the aerospace industry.  There have been no reports of government failure to protect NGOs that investigate corruption (e.g., Transparency International Italy).

Italy has signed and ratified the UN Anticorruption Convention and the OECD Convention on Combatting Bribery.

Resources to Report Corruption

Autorità Nazionale Anticorruzione (ANAC)
Via Marco Minghetti, 10 – 00187 Roma
Phone:  +39 06 367231
Fax:  +39 06 36723274
Email:  protocollo@pec.anticorruzione.it

Contact Info page:  http://www.anticorruzione.it/portal/public/classic/MenuServizio/Contatti

ANAC’s whistleblowing web page is:  http://www.anticorruzione.it/portal/public/classic/Servizi/ServiziOnline/SegnalazioneWhistleblowing

Transparency International Italia
P.le Carlo Maciachini 11
20159 Milano – Italy
T:  +39 02 40093560
F:  +39 02 406829
E:  info@transparency.it
General web site:  www.transparency.it
Corruption Specific:  https://www.transparency.it/alac/

Politically motivated violence is not a threat to foreign investments in Italy.  On rare occasion, extremist groups have made threats and deployed letter bombs, firebombs, and Molotov cocktails against Italian public buildings, private enterprises and individuals, and foreign diplomatic facilities.  Though many of these groups have hostile views of the United States, they have not targeted U.S. property or citizens in recent years.

Italy-specific travel information and advisories can be found at: www.travel.state.gov.

Unemployment continues to be a pressing issue in Italy, particularly among youth (ages 15-24).  Italy has one of the EU’s highest rates of youth unemployment at 29.7 percent (December 2020), while the overall unemployment rate was 9.0 percent in December 2020.  The unemployment rate has decreased since the pandemic, but the decrease significantly underestimates the pandemic’s impact on the economy and labor as the government has banned most layoffs and implemented a program to provide paid furloughs, which allow companies to reduce staff temporarily without adding them to the ranks of the unemployed.  Despite these measures, Italy lost 456,000 jobs in 2020, while Italy’s inactive population (neither working nor seeking work actively) rose 0.9 percent.  Job losses were concentrated among those employed under temporary contracts and in the services sector, disproportionately affecting young people and women.  As of December 2020, only 49% of females were employed, the second to lowest rate of all EU countries.  The ratio of long-term unemployment (unemployment lasting over 12 months) as a share of overall unemployment continues to be among the highest of major European economies.  Underemployment (employment that is not full-time or not commensurate with the employee’s skills and abilities) is also a serious issue.  These jobs are often concentrated in the service industry and other low-skilled professions.

Long-term unemployment is also elevated, leading to a permanent reduction in human capital and earnings potential.  Italy’s labor force participation rates are among the lowest in the EU, particularly among women, the young, and the elderly, and particularly in the South.  However, low labor force participation rates do not encompass labor in the large informal economy, which Italy’s statistics agency estimates as comprising at least 12 percent of Italian GDP.

The productivity of Italy’s labor force – one of the main weaknesses of the country’s economy – is also below the EU average.  Many Italian employers report an inability to find qualified candidates for highly skilled positions, demonstrating significant skills mismatches in the Italian labor market.  Many well-educated Italians find more attractive career opportunities outside of Italy, with large numbers of Italians taking advantage of EU freedom of movement to work in the United Kingdom (pre-Brexit), Germany, or other EU countries.  There is no reliable measure of Italians working overseas, as many expatriate workers do not report their whereabouts to the Italian government.  Skilled labor shortages are a particular problem in Italy’s industrialized North.

Companies may bring in a non-EU employee after the government-run employment office has certified that no qualified, unemployed Italian is available to fill the position.  However, the cumbersome and lengthy process acts as a deterrent to foreign firms seeking to comply with the law; language barriers also prevent outsiders from competing for Italian positions.  Work visas are subject to annual quotas, although intra-company transfers are exempt.

Indefinite employment contracts signed before March 2015 are governed by the 2012 labor regime, which allows firms to conduct layoffs and firings with lump sum payments.  Under the 2012 system, according to Article 18 of the workers’ statute of 1970, judges can order reinstatement of dismissed employees (with back pay) if they find the dismissal was a pretext for discriminatory or disciplinary dismissal.  In practice, dismissed employees reserved the right to challenge their dismissal indefinitely, often using the threat of protracted legal proceedings or an adverse court ruling to negotiate additional severance packages with employers.

Indefinite employment contracts signed after March 2015 are governed by the rules established under the 2015 Jobs Act, a package of labor market reforms that provides for employment contracts with protections increasing with job tenure.  During the first 36 months of employment, firms may dismiss employees for bona fide economic reasons.  Under the Jobs Act regime, dismissed employees must appeal their dismissal within 60 days and reinstatements are limited.

Regardless of the reason for termination of employment, a former employee is entitled to receive severance payments (TFR – trattamento di fine rapporto) equal to 7.4 percent of the employee’s annual gross compensation for each year worked.

Other Jobs Act measures enacted in 2015 include universal unemployment and maternity benefits, as well as a reduced number of official labor contract templates (from 42 to six).  The GOI’s unemployment insurance (NASPI) provides up to six months of coverage for laid-off workers.  The GOI also provides worker retraining and job placement assistance, but services vary by region and implementation of robust national active labor market policies remains in progress.

In 2018 the government introduced the so-called “Dignity Decree,” which rolled back some of the structural reforms to Italy’s labor market adopted as part of the 2015 Jobs Act.  For example, the Dignity Decree extended incentives to hire people under 35 years old, set limits on how often a short-term contract could be renewed – the government has suspended the limit during the pandemic – and made it more costly to fire workers.

Italy offers residents other social safety net protections.  In 2017 the government implemented an anti-poverty plan (Reddito di Inclusione, or “Inclusion Income”) aimed at providing some financial relief and training to homeless individuals and people with income below a certain threshold.  In the 2019 budget, a prior government introduced the Citizenship Income (Reddito di Cittadinanza), which replaced and broadened the Inclusion Income program of 2017.  The Citizenship Income program provides a basic income of €780 a month to eligible citizens and acts as an employment agency to a portion of those receiving the Citizenship Income.  The estimated annual cost of the program was approximately €6.5 billion, but the pandemic increased the number of potential beneficiaries.  The program provides benefits to around 1.3 million households (or 3.1 million individuals).

In 2019 the government implemented an early retirement scheme (Quota 100), which changed the pension law and permitted earlier retirement for eligible workers aged 62 years or older with at least 38 years of employment.  The benefit expires at the end of 2021.

While the Jobs Act included a statutory minimum wage, it has not yet been implemented.  With no national minimum wage, wages are set through sector-wide collective bargaining.  The government in 2016 established an agency for Job Training and Placement (ANPAL) to coordinate (with Italian regions) implementation of many labor policies.  ANPAL oversees implementation of the Assegno di Ricollocazione (a “relocation allowance”), an initiative to provide unemployment benefits to workers willing to move to different regions of the country), and a related special wage guarantee fund (Cassa Integrazione Straordinaria) that provides stipends for retraining.  The Citizenship Income program and ANPAL appear to have failed in their goal of helping eligible workers find jobs.  The Citizenship Income program, however, seems to have played a role in reducing poverty before the pandemic, and limiting its rise in 2020 during the economic crisis.  In March 2021 the Ministry of Labor set up a committee to examine how to reform the Citizenship Income program.  Historical regional labor market disparities remain unchanged, with the southern third of the country posting a significantly higher unemployment rate than northern and central Italy.  Despite these differences, internal migration within Italy remains modest, while industry-wide national collective bargaining agreements set equal wages across the entire country.

Italy is a member of the International Labor Organization (ILO).  Italy does not waive existing labor laws to attract or retain investments.  Terms and conditions of employment are periodically fixed by collective labor agreements in different professions.  Most Italian unions are grouped into four major national confederations: the General Italian Confederation of Labor (CGIL), the Italian Confederation of Workers’ Unions (CISL), the Italian Union of Labor (UIL), and the General Union of Labor (UGL).  The first three organizations are affiliated with the International Confederation of Free Trade Unions (ICFTU), while UGL has been associated with the World Confederation of Labor (WCL).  The confederations negotiate national-level collective bargaining agreements with employer associations, which are binding on all employers in a sector or industry irrespective of geographical location.

Collective bargaining is widespread in Italy, occurring at the national-level (primarily aimed at securing pay adjustments that take account of inflation/changes in the cost-of-living) and industry-level (to secure pay adjustments that reflect increased productivity and/or profitability).  Firm-level collective bargaining is limited.  The Italian Constitution provides that unions may reach collective agreements that are binding on all workers.  There are no official estimates of the percentage of the economy covered by collective bargaining agreements.  A 2019 estimate from The European Trade Union Institute said collective bargaining coverage was approximately 80 percent (for national-level bargaining), with less coverage for industry-level agreements and minimal coverage for company-level agreements.

Collective agreements may last up to three years, although recent practice is to renew collective agreements annually.  Collective bargaining establishes the minimum standards for employment, but employers retain the discretion to apply more favorable treatment to some employees covered by the agreement.

Labor disputes are handled through the civil court system, though they are subject to specific procedures.  Before entering the civil court system, parties must first attempt to resolve their disputes through conciliation (administered by the local office of the Ministry of Labor) and/or through specific union-agreed dispute resolution procedures.

In cases of proposed mass layoffs or facility closures, the Ministry of Economic Development may convene a tripartite negotiation (Ministry, company, and union representatives) to attempt to reach a mutually acceptable agreement to avoid the layoff or closure.  In recent years, U.S. companies have faced significant resistance from labor unions and politicians when attempting to right size operations.  Due to the pandemic, the government has banned most layoffs through June 2021.  (This date may be extended.)

There have been no recent strikes that posed investment risks.  The Italian Constitution recognizes an employee’s right to strike.  Strikes are permitted in practice, but are typically short-term (e.g., one working day) to draw attention to specific areas of concern.  In addition, workers (or former employees) commonly participate in demonstrations to show opposition to proposed job cuts or facility closings, but these demonstrations have not threatened investments.  In addition, occasional strikes by employees of local transportation providers may limit citizens’ mobility.

* Italian GDP data are taken from ISTAT, the official statistics agency.  ISTAT publishes preliminary year end GDP data in early February and issues revised data in early March.  Italian FDI data are from the Bank of Italy and are the latest available; new data are released in May.

**2020 GDP is $1,967,248 (€1,651,595).

The statistics above show Italy’s largest investment partners to be within the European Union and the United States.  This is consistent with Italy being fully integrated with its EU partners and the United States.