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The eighth largest in the world, Italy’s economy is globally competitive in the areas of business and financial services, agricultural and food production, fashion, design, tourism, and industrial production including of vehicles and ships. Italy’s economy proved resilient to high energy prices and overall inflation in 2022, growing 3.7 percent. Robust growth in the construction sector, which benefited from tax credits for eco-friendly renovation projects, as well as rebound of the tourism and services sector, helped drive the overall expansion. Russia’s full-scale invasion of Ukraine exacerbated a pre-war trend of rising energy prices. Continuing supply-chain constraints, tighter monetary policy conditions, inflation, and Russia’s full-scale invasion create uncertainty affecting consumer and investor confidence. Italy forecasts its economy, the euro area’s third largest, will grow by 1.0 percent in 2023 and 1.5 percent in 2024. Public debt was 144.4 percent of GDP in 2022 and projected to decline to 141.4 percent in 2024, progressively declining from 155 percent in 2020.

Italy’s National Resilience and Recovery Plan (NRRP), which runs from 2021-2026, combines over €200 billion in EU funds to accelerate the digital and green transitions coupled with wide-ranging reforms addressing the Italian economy’s longstanding drags on growth – namely its slow legal system, convoluted tax administration, and bloated bureaucracy – while rebalancing policies to address gender, youth, and regional disparities. To date, Italy has received €67 billion in EU grants and loans as part of the NRRP. Further disbursements will be dependent on Italy’s achievement of EU-agreed milestones and targets. The government has had difficulty, however, in spending the funds as quickly as planned due to a lack of administrative capacity, a known risk factor that the NRRP seeks to address through reforms and increased capacity of the public administration, and a changing economic landscape following Russia’s full-scale invasion of Ukraine. For U.S. investors, judicial reform and bureaucratic streamlining would minimize uncertainty and create a more favorable investment climate.

Italy is and will remain an attractive destination for foreign investment, with one of the largest markets in the EU, a diversified economy, and a skilled workforce. Italy’s economy is dominated by small and medium-sized enterprises (SMEs), defined as firms with less than 250 employees. SMEs comprise 99.9 percent of Italian businesses. Italy’s relatively affluent domestic market, access to the European Common Market, proximity to emerging economies in North Africa and the Middle East, and centers of excellence in scientific and information technology research, remain attractive to investors. The clustering of industry, the infrastructure, and the quality of life are also among the top reasons international investors decide to start or expand a business in Italy. According to Italy’s Institute of Statistics, in 2020 over 15,600 foreign multinationals employed 1.5 million Italian residents.  Foreign companies account for 18 percent of Italian GDP and 14 percent of investments. Exports of pharmaceutical products, furniture, industrial machinery and machine tools, electrical appliances, automobiles and auto parts, food and wine, as well as textiles/fashion are an important source of external revenue. Sectors which have attracted significant foreign investment include telecommunications, transportation, energy, and pharmaceuticals. The government remains open to foreign investment in shares of Italian companies and continues to make information available online to prospective investors.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2022 41 of 180
Global Innovation Index 2022 28 of 132
U.S. FDI in partner country ($M USD, historical stock positions) 2021 $28,096
World Bank GNI per capita 2021 $35,990

Policies Towards Foreign Direct Investment

Italy is an open economy and welcomes foreign direct investment (FDI). As an 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 or apply conditions to 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 follow-on legislation in 2015, 2017, 2019, 2020, and 2022, 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 including 5G and cloud computing, critical infrastructure, sensitive technology, and nuclear and space technology.  The April 2020 Liquidity Decree issued by the Prime Minister’s Office to prevent Italian companies from hostile takeovers in light of the pandemic 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 expanded Golden Power review to EU-based investors and gives the government new authorities to investigate non-notified transactions. Embedded in a broader government decree issued March 2022, the Golden Power investment screening authority was further revised to reflect the government’s effort to adapt to both rapid developments in technology and recent shifts in the geopolitical landscape.  The revision to the Golden Power mechanism revolves around three poles: the first enlarges Golden Power’s scope to capture emerging and critical technology, including cloud-based activities of strategic importance to the national defense and security system; the second requires companies submit to the Golden Power committee for approval annual procurement plans; and the third empowers a ten-expert committee to carry out investigations to monitor compliance, and establishes strict penalties and enforcement mechanisms for non-compliance. In December 2022, the GOI decreed that firms negatively affected by a Golden Power decision made based on national security can apply for compensatory measures.

The Italian Trade Agency (ITA) is responsible for foreign investment attraction as well as promoting foreign trade and Italian exports. ITA operates under the coordination of the Italian Ministry of Enterprise and Made in Italy (formerly the Ministry of Economic Development) and the Ministry of Foreign Affairs and operates through a network of 79 offices in 65 countries. ITA promotes foreign investment in Italy through Invest in Italy program: h ttp:// . The Foreign Investments Attraction Department is a dedicated unit of ITA for facilitating the establishment and the development of foreign companies in Italy. The Department’s main activities are promoting business opportunities, helping foreign investors to establish or expand their operations, supporting investors throughout the investment life cycle, and offering high-level consulting services for existing strategic investments. 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 . Italy’s main business association (Confindustria) also helps companies in Italy: .

Limits on Foreign Control and Right to Private Ownership and Establishment

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 based applies discriminatory measures against Italian firms. Italy maintains a formal national security screening process for inbound foreign investment which allows the Italian government to block or apply conditions to 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 follow-on legislation in 2015, 2017, 2019, 2020, and 2022, 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 including 5G and cloud computing, critical infrastructure, sensitive technology, and nuclear and space technology.  The April 2020 Liquidity Decree issued by the Prime Minister’s Office to prevent Italian companies from hostile takeovers in light of the pandemic strengthened Italy’s investment screening authority to cover all sectors outlined in the EU’s March 2019 foreign direct investment screening directive. The EU directive covers: (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. The decree also expanded Golden Power review to EU-based investors and gives the government new authorities to investigate non-notified transactions. Embedded in a broader government decree issued March 2022, the Golden Power investment screening authority was further revised to reflect the government’s effort to adapt to both rapid developments in technology and recent shifts in the geopolitical landscape.  The revision to the Golden Power mechanism revolves around three poles: the first enlarges Golden Power’s scope to capture emerging and critical technology, including cloud-based activities of strategic importance to the national defense and security system; the second requires companies submit to the Golden Power committee for approval annual procurement plans; and the third empowers a ten-expert committee to carry out investigations to monitor compliance, and establishes strict penalties and enforcement mechanisms for non-compliance. In December 2022, the GOI decreed that firms negatively affected by a Golden Power decision based on national security can apply for compensatory measures.

Other Investment Policy Reviews

The UN Working Group on Business and Human Rights conducted a visit to Italy in 2021. In its report, the Working Group stated it “was encouraged by ongoing efforts to advance responsible business conduct and to address remaining gaps, particularly in relation to preventing and addressing serious abuses suffered by migrant workers in the agricultural and other sectors. However, numerous challenges remain in the need to address the root causes of such abuses, unsafe working conditions across supply chains, and how to hold businesses to account. The Working Group also observed efforts by the Government to find a balanced approach towards industrial-economic development, the protection of human rights and the environment and noted that meaningful participation of affected communities in environmental decisions remains insufficient, which also hampers efforts to ensure inclusive transition to a green economy as well as social and environmental accountability.” In its response, the Government of Italy expressed “wide appreciation for the fruitful collaboration and the outcomes of the visit” and stated, “Italy is committed to turn into action all planned measures and commitments included in the 2nd National Action Plan on Business and Human Rights, which have been complemented by some ones directly suggested by the UN Working Group during the visit.” The report is available at:  and Italy’s response is available at: .

Business Facilitation

Italy has a business registration website, available in Italian and English, administered through the Union of Italian Chambers of Commerce:  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. 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.—A-to-Z  Italy does not have a bilateral investment treaty (BIT) with the United States.

A list of all countries with which Italy currently has bilateral investment treaties is available at the following website: .

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: .

Likewise, Italy’s FTA negotiations are handled at the EU level: .

Italy shares a bilateral taxation treaty with the United States. The text of the treaty is available at: .

Italy is a member of the OECD Inclusive Framework on Base Erosion and Profit Shifting and is party to the Inclusive Framework’s October 2021 deal on the two-pillar solution to global tax challenges, including a global minimum corporate tax.

Transparency of the Regulatory System

Regulatory authority exists at the national, regional, and municipal level. All applicable regulations could be relevant for foreign investors. The GOI and individual ministries, as well as independent regulatory authorities, develop regulations at the national level. Regional and municipal authorities issue regulations at the sub-national level.  Draft regulations may be posted for public comment, but there is generally no requirement to do so. Final national-level regulations generally are published in the Gazzetta Ufficiale (and only become effective upon publication). Regulatory agencies may publish summaries of received comments. In Italy private companies are not required to obtain an Environmental Product Declaration (EPD) – an internationally-recognized certificate on the environmental impact of their products or services – but an increasing number of companies apply and disclose it voluntarily. EU Ecolabel licenses were first introduced to Italy in 1998. As of March 2023, Italy ranked first in Europe for number of EU Ecolabeling licenses. Currently in Italy there are 414 EU Ecolabel licenses involving 13,243 products. The product group with the largest number of licenses is “cleaning services” with 148 licenses followed by “Tourist Accommodation Services” with 64 licenses.

No major regulatory reform affecting foreign investors was undertaken in 2022. Aggrieved parties may challenge regulations in court. Public finances and debt obligations are transparent and are publicly available through banking channels such as the Bank of Italy (BOI).

International Regulatory Considerations

Italy is a founding member of the EU. EU directives are brought into force in Italy through implementing national legislation. In some areas, EU procedures require Member States to notify the European Commission (EC) before implementing national-level regulations. Italy on occasion has failed to notify the EC and/or the World Trade Organization (WTO) of draft regulations in a timely way. For example, in 2017 Italy adopted Country of Origin Labelling (COOL) measures for milk and milk products, rice, durum wheat, and tomato-based products. Italy’s Ministers of Agriculture and Economic Development publicly stated these measures would support the “Made in Italy” brand and make Italian products more competitive. Though the requirements were widely regarded as a Technical Barrier to Trade (TBT), Italy failed to notify the WTO in advance of implementing these regulations. On December 28, 2022, the Italian Ministers of Agriculture, Food Sovereignty, and Forests, Health, and Enterprises and Made in Italy signed a decree to extend the validity of country-of-origin labeling (“COOL”) measures for durum wheat, rice, pork meat, tomatoes, and dairy products until December 31, 2023. Italy is a signatory to the WTO’s Trade Facilitation Agreement (TFA) and has implemented all developed-country obligations.

Legal System and Judicial Independence

Italian law is based on Roman law and on the French Napoleonic Code law. The Italian judicial system consists of a series of courts and a body of judges employed as civil servants. The system is unified; every court is part of the national network. Though notoriously slow, the Italian civil legal system meets the generally recognized principles of international law, with provisions for enforcing property and contractual rights. Italy has a written and consistently applied commercial and bankruptcy law. Foreign investors in Italy can choose among different means of alternate dispute resolution (ADR), including legally binding arbitration, though use of ADR remains rare. The GOI in recent years has introduced justice reforms to reduce the backlog of civil cases and speed new cases to conclusion. These reforms also included a digitization of procedures, and a new emphasis on ADR. Judicial sector reform is a significant pillar of Italy’s National Recovery and Resilience Program. Regulations can be appealed in the court system.

Laws and Regulations on Foreign Direct Investment

Italy is bound by EU laws on FDI.

Competition and Antitrust Laws

The Italian Competition Authority (AGCM) is responsible for reviewing transactions for competition-related concerns. AGCM may examine transactions that restrict competition in Italy as well as in the broader EU market. As a member of the EU, Italy is also subject to interventions by the European Commission Competition Directorate (DG COMP). Companies can challenge AGCM decisions before the Lazio Regional Administrative Court. Regional Administrative Court decisions can be appealed to the Council of State.

In November 2021, AGCM fined Amazon and Apple $225 million for alleged anti-competitive cooperation in the resale of Apple and Beats products. In October 2022, the Lazio Regional administrative court cancelled the fine citing administrative process. In December 2021, AGCM fined Amazon $1.3 billion for abuse of market dominance, in one of the biggest penalties imposed on a U.S. technology company in Europe. AGCM alleges Amazon grants benefits and higher site visibility to users (sellers) of Amazon’s warehouse and delivery service, thereby harming competitor delivery services. In addition to the fine, AGCM ordered Amazon “to grant sales benefits and visibility on to all third-party sellers which are able to comply with fair and non-discriminatory standards for the fulfillment of their orders.”  AGCM alleges Amazon unfairly imposes stringent performance metrics on sellers not using Amazon delivery services, which can lead to account suspension. Amazon appealed to the Lazio Regional administrative court to annul the fine. In October 2022, the Lazio Regional administrative court said it had suspended judgment pending a ruling by the European Union Court of Justice over the case.

Expropriation and Compensation

The Italian Constitution permits expropriation of private property for “public purposes,” defined as essential services (including during national health emergencies) or measures indispensable for the national economy, with fair and timely compensation. In November 2022, an ICSID tribunal found that Italy had breached the Energy Charter Treaty by unlawfully expropriating an investor’s right to an oil and gas production concession.

Dispute Settlement

ICSID Convention and New York Convention

Italy is a member state of the World Bank’s International Centre for the Settlement of Investment Disputes (ICSID convention). Italy has signed and ratified the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958 New York Convention). Italian civil law (Section 839) provides for and governs the enforcement of foreign arbitration awards in Italy.

Investor-State Dispute Settlement

Italian law recognizes and enforces foreign court judgments. Over the past ten years, Italy has been the respondent state in 13 investment disputes based on international investor agreements. Four have been decided in favor of the investor, five have been decided in favor of the respondent state, and four remain pending.

International Commercial Arbitration and Foreign Courts

Italy is a party to the following international treaties relating to arbitration:

  • The 1927 Geneva Convention on The Execution of Foreign Arbitral Awards (entered into force on February 12, 1931); and
  • The 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (entered into force on May 1, 1969); and
  • The 1961 European Convention on International Commercial Arbitration (entered into force on November 1, 1970).

Italy’s Code of Civil Procedure (Book IV, Title VIII, Sections 806-840) governs arbitration, including the recognition of foreign arbitration awards. Italian law is not based on the UNCITRAL Model Law; however, many of the principles of the Model Law are present in Italian law. Parties are free to choose from a variety of Alternative Dispute Resolution methods, including mediation, arbitration, and lawyer-assisted negotiation.

Bankruptcy Regulations

Italy’s bankruptcy regulations are somewhat analogous to U.S. Chapter 11 restructuring and allow firms and their creditors to reach a solution without declaring bankruptcy. In recent years, the judiciary’s role in bankruptcy proceedings has been reduced to simplify and expedite proceedings. In 2015, the Italian parliament passed changes to the bankruptcy law, including measures to ease access to interim credit for bankrupt companies and to restructure debts. Additional changes were approved in 2017 (juridical liquidation, early warning, simplified process, arrangement with creditors, insolvency of affiliated companies as a group, and reorganization of indebtedness rules). The measures aim to reduce the number of bankruptcies, limit the impact on the local economy, and facilitate the settlement of corporate disputes outside of the court system. The reform follows on the 2015 reform of insolvency procedures. Finally, a law adopted in 2022 to implement Italy’s NRRP includes elements to resolve potential bankruptcies through preliminary agreements among creditors, facilitated by exchanges of information and data with the digital tools.

Investment Incentives

The GOI offers incentives to encourage private sector investment in targeted sectors and economically depressed regions, particularly in southern Italy. The incentives are available to eligible foreign investors as well. Incentives include grants, low-interest loans, and deductions and tax credits. Some incentive programs have a cost cap, which may prevent otherwise eligible companies from receiving the incentive benefits once the cap is reached. The GOI applies cost caps on a non-discriminatory basis, typically based on the order in which the applications were filed. The government does not have a practice of issuing guarantees or jointly financing foreign direct investment projects.

Italy provides an incentive for investments by SMEs in new machinery and capital equipment (“New Sabatini Law”), available to eligible companies regardless of nationality. This investment incentive provides financing, subject to an annual cost cap. Sector-specific investment incentives are also available in targeted sectors. The government has renewed “New Sabatini Law” benefits, extending them through 2027.

The GOI allocated €23.8 billion in 2021-2023 for the private investment plan “Industry 4.0” (later renamed “Transition 4.0”), which aims to improve the Italian industrial sector’s competitiveness through a combination of policy measures, tax credits, and research and infrastructure funding. The 2022 budget reformulated the rates of the tax credit of “Industry/Transition 4.0” for the purchase of new investment goods. The government also extended the incentives to the purchase of immaterial goods (software, system integration, platforms, and apps). The 2023 budget, however, downscaled this program significantly, ending tax credits related to both tangible and intangible ordinary capital goods. Incentives related to investments in tangible capital goods that were already scheduled and partially funded in 2022 were extended until September 2023. In addition, the 2023 budget reduced – but did not eliminate – “Industry/Transition 4.0” tax credits for certain research and development activities as well as for investment in green technology innovation.

In the 2021 budget, the GOI allocated €2 billion in tax incentives to spur bank mergers and as part of an unsuccessful effort to attract a buyer for state-owned bank Monte dei Paschi di Siena. These incentives expired in June 2022.

Under the so-called “Green Bonus” program implemented in 2020, the government provided generous tradable tax incentives for renovations that increase buildings’ energy efficiency. This program was extended from the end of 2021 until the end of 2022. A similar program provided tax incentives for façade improvements. Given concerns about the cost of the Green Bonus program and alleged fraud, the government in 2023 decided to reduce the amount of the tax credits and end their tradability.

The Italian tax system generally does not discriminate between foreign and domestic investors, though Italy’s digital services tax affects certain U.S. companies. The corporate income tax (IRES) rate is 24 percent. In addition, companies may be subject to a regional tax on productive activities (IRAP) at a 3.9 percent rate. In 2022, Italy imposed a 25 percent “energy windfall tax” on energy companies that reported additional profits. The government reformulated the tax for 2023 and imposed a tax of 50 percent on energy companies’ income that exceeds prior years’ averages by more than 10 percent.

Foreign Trade Zones/Free Ports/Trade Facilitation

In 2017, Laws 91 and 123 created eight Special Economic Zones (SEZs) managed by port authorities in Italy’s less-developed southern regions (Abruzzo, Basilicata, Calabria, Campania, Molise, and Puglia) and on the islands of Sardinia and Sicily. Italy’s National Recovery and Resilience Plan includes €630 million for SEZ’ investments. Businesses investing in SEZs benefit from tax breaks, hiring incentives, and reduced bureaucracy. With the 2020 budget law, the Italian government established that each SEZ would be chaired by a government commissioner.

Law 205 of 2017 also regulated the possibility of setting up simplified logistics zones (ZLS – Zona Logistica Semplificata) in the port areas of the most developed regions, as identified by European legislation. ZLSs aim to provide benefits including administrative simplifications, economic incentives, and tax relief. The first ZLS to become operational is the “Venice Rodigino” ZLS, which was established by a Prime Minister’s decree signed on October 6, 2022.

Free trade zones (FTZs) allow companies to import goods and re-export them to non-EU countries without paying import tariffs and free of any customs restraints. FTZ law allows companies to employ workers of the same nationality of the company under that country’s labor laws. Italy’s main FTZ is in the northeastern city of Trieste. Others are Venice and Gioia Tauro.

In addition to FTZs, SEZs, and ZLSs, Italian ports are also focusing on Customs Free Zones, whereby port operators can conduct commercial activities and take advantage of significant customs incentives. As of August 2022, there are six operating Customs Free Zones in Italy (Trieste, Venezia, Portovesme, Taranto, Brindisi Nord, and Brindisi Capobianco).

Performance and Data Localization Requirements

As a member of the EU, Italy does not follow forced localization policies in which foreign investors must use domestic content in goods or technology. Italy does not have enforcement procedures for investment performance requirements. Italy does not require local data storage but companies transmitting customer or other business-related data within or outside of the EU must comply with relevant EU privacy regulations.

In 2020, the GOI exercised its Golden Power authority in several 5G-equipment procurement cases. In some cases, the GOI authorized telecom operators to purchase equipment from certain foreign IT vendors if they could adhere to a set of “prescriptions.” One of these prescriptions includes access to the foreign IT vendors’ source code.

Real 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. Real property registration can be performed online via Italy’s tax agency. The online service allows for contract registration as well as the payment of registration and stamp fees.

Intellectual Property Rights

Italy is not listed in USTR’s Review of Notorious Markets for Counterfeiting and Piracy although USTR has identified several online domains in Italy that have promoted access to unlicensed digital content. AGCOM’s authority to block access to computer servers and web sites is limited to those located in Italy. Many illegal services provide content through servers located outside Italy.

Italian laws are considered effective in protecting and enforcing intellectual property (IP) rights including trademarks and copyright. The Italian police forces, the Guardia di Finanza, and the Customs Agency, Agenzia delle Dogane (ADM) are primarily responsible for combating IP theft and take this responsibility seriously. Italian magistrates are also aware of the economic value of IP and have actively prosecuted IP theft. USTR removed Italy from the Special 301 Watch List in 2014 after the Italian Communications Authority (AGCOM) issued new regulation to combat digital copyright theft. The regulation created a process by which rights holders can report online infringements to AGCOM, which then blocks access to the domestic hosting infringing content. In March 2023, the Italian Parliament’s Chamber of Deputies approved new antipiracy legislation that would improve AGCOM’s powers and provide new technological tools to combat online piracy. As of April 3, 2023, the legislation was pending Senate approval.

In December 2021, the EU Copyright in the Digital Single Market (CDSM) Directive came into force, essentially replacing the Italian Copyright Act. The Italian version is more lenient on sharing the digital search results (through via new original works research) of legally accessed materials databases and archival collections unless rights holders “opt out.” The Italian law also recognizes the exception to copyright for cultural heritage preservation. For example, copies of works in any format or medium cannot be limited via a contract if permanently held by cultural heritage institutions.  The law also allows educational institutions to use sections of copyrighted materials without the copyright holder’s permission if used in secure online systems accessed only by students and educators.

Italy tracks and reports seizures of counterfeit goods, primarily through ADM which has an active enforcement posture at Italian ports and an excellent track record for interdicting counterfeit and substandard goods coming into Italy and the European Union. In 2021, Italy made 14,309 seizures (up 63 percent from 2020) corresponding to approximately 31 million pieces of confiscated pieces nationwide (up 87 percent from 2020), with a retail value of approximately €56.5 million (up 45 percent from 2020). Many seizures in 2021 were related to clothing items or clothing accessories. These figures exclude food, alcoholic beverages, tobacco, and pharmaceuticals.

The Republic of San Marino is considering new legislation to improve trademark registration. The San Marino Trademark and Patent Office (USBM) publishes a bimonthly bulletin to advertise new trademark applications. Requests remain pending for four months, during which interested third parties can submit their observations to USBM. While the final decision rests with USBM, there is pending legislation that would grant third parties the possibility to submit their remarks and express their opposition to the registration of a trademark. In this case, USBM would refer the final decision to a new entity composed of specialized experts and attorneys.

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 .

Capital Markets and Portfolio Investment

The GOI welcomes foreign portfolio investments, which are generally subject to the same reporting and disclosure requirements as domestic investments.  Financial resources flow relatively freely in Italian financial markets and capital is allocated mostly on market terms.  Foreign participation in Italian capital markets is not restricted.  In practice, many of Italy’s largest publicly traded companies have foreign owners among their primary shareholders.  While foreign investors may obtain capital in local markets and have access to a variety of credit instruments, gaining access to equity capital is difficult.  Italy has a relatively underdeveloped private equity capital market and businesses have a long-standing preference for credit financing. The limited venture capital available is usually provided by established commercial banks and a handful of venture capital funds.

In 2021 the Netherlands-based Euronext acquired Italy’s stock exchange, the Milan Stock Exchange (Borsa Italiana), from the London Stock Exchange. Euronext’s primary data center was transferred from London to Bergamo in northern Italy in October 2022. Borsa Italiana is relatively small, with 414 listed companies and a market capitalization of 32.8 percent of GDP at the end of 2022. Although the exchange remains primarily a source of capital for larger Italian firms, Borsa Italiana created “AIM Italia” in 2012 as an alternative exchange with streamlined filing and reporting requirements to encourage SMEs to seek equity financing. The GOI recognizes that Italian firms remain overly reliant on bank financing and has initiated some programs to encourage alternative forms of financing, including venture capital and corporate bonds. Financial experts have held that slow CONSOB (the Italian Companies and Stock Exchange Commission) processes and cultural biases against private equity have limited equity financing in Italy. Venture Capital Monitor, produced by LIUC business school, reported that venture capital operations in Italy in the first nine months of 2022 had already exceeded the number of operations in 2021 with the value (nearly €1.7 billion) more than doubling the amount invested in 2021. The state, through CDP Venture Capital (part of state-owned investment bank Cassa Depositi e Prestiti (CDP)) plays an active role in the Italian venture capital market. CDP Venture Capital reported investing a total of €2.2 billion by the end of 2022.

Italy’s financial markets are regulated by the Italian securities regulator CONSOB, Italy’s central bank – the Bank of Italy (BOI), and the Institute for the Supervision of Insurance (IVASS).  CONSOB supervises and regulates Italy’s securities markets (e.g., the Milan Stock Exchange).  As of January 2023, the European Central Bank directly supervised 12 of Italy’s largest banks and indirectly supervised less significant Italian banks through the BOI. IVASS supervises and regulates insurance companies.  Liquidity in the primary markets is sufficient to enter and exit sizeable positions, though Italian capital markets are small by international standards.  Liquidity may be limited for certain less-frequently traded investments (e.g., bonds traded on the secondary and OTC markets).

Italian policies generally facilitate the flow of financial resources to markets.  Dividends and royalties paid to non-Italians may be subject to a withholding tax, unless covered by a tax treaty.  Dividends paid to permanent establishments of non-resident corporations in Italy are not subject to the withholding tax.

Italy imposed a financial transactions tax (FTT, or Tobin Tax) beginning in 2013.  Financial trading is taxed at 0.1 percent in regulated markets and 0.2 percent in unregulated markets.  The FTT applies to daily balances rather than to each transaction.  The FTT applies to trade in derivatives as well, with fees ranging from €0.025 to €200.  High-frequency trading is also subject to a 0.02 percent tax on trades occurring every 0.5 seconds or faster (e.g., automated trading).  The FTT does not apply to “market makers,” pension and small-cap funds, transactions involving donations or inheritances, purchases of derivatives to cover exchange/interest-rate/raw-materials (commodity market) risks, government and other bonds, or financial instruments for companies with a capitalization of less than €500 million. The FTT has been criticized for discouraging small savers from investing in publicly traded companies on the Milan stock market.

There are no restrictions on foreigners engaging in portfolio investment in Italy.  Financial services companies incorporated in another EU member state may offer investment services and products in Italy without establishing a local presence. Since 2020, investors, Italian or foreign, acquiring a stake of more than one percent of a publicly traded Italian firm must inform CONSOB but do not need its approval.  Any Italian or foreign investor seeking to acquire or increase its stake in an Italian bank equal to or greater than ten percent must receive prior authorization from the BOI.  Acquisitions of holdings that would change the controlling interest of a banking group must be communicated to the BOI at least 30 days in advance of the closing of the transactions.  Approval and advance authorization by the Italian Insurance Supervisory Authority are required for any significant acquisition in ownership, portfolio transfer, or merger of insurers or reinsurers.  Regulators retain the discretion to reject proposed acquisitions on prudential grounds (e.g., insufficient capital in the merged entity).

Italy has sought to curb widespread tax evasion – which cost Italy about €90 billion in 2020 according to the government – by improving enforcement and changing attitudes.  GOI actions include a public communications effort to reduce tolerance of tax evasion; mailing out letters to those suspected of not fully reporting their income; increased and visible financial police controls on businesses (e.g., raids on businesses in vacation spots at peak holiday periods); and audits requiring individuals to document their income.  Electronic invoicing, which has been mandatory for businesses (above a certain revenue threshold) since 2014 for business-to-government transactions and mandatory since 2019 for business-to-business and business-to-consumer transactions has also reduced tax evasion. Tax reforms implemented in 2015 institutionalized some OECD best practices to encourage taxpayer compliance, including by reducing the administrative burden for taxpayers through the increased use of technology such as e-filing, pre-completed tax returns, and automated screenings of tax returns for errors and omissions prior to a formal audit.  The reforms also offered additional certainty for taxpayers through programs such as cooperative compliance and advance tax rulings (i.e., binding opinions on tax treatment of transactions in advance) for prospective investors.  The previous government approved overarching guidelines of a general tax reform to simplify Italy’s tax system, which remains complex and has relatively high tax rates on labor income. The tax reform, however, was not passed by parliament. The current government has also adopted guidelines for a new tax reform in March 2023 that would reduce Italy’s tax brackets, eliminate certain tax deductions and tax expenditures, and raised the limit for cash transactions from €2000 to €5000 as of January 2023. Should parliament pass the tax reform framework legislation, the government would then have 24 months to develop the related implementing decrees. (Most of the details of the reform would be contained in the implementing decrees.)

The GOI and the BOI have accepted and respect IMF obligations, including Article VIII.

Money and Banking System

Despite isolated problems at individual Italian banks, the banking system remains sound and capital ratios exceed regulatory thresholds.  About 100 different banking groups and independent banks operate in Italy. While Italian banks’ profit margins suffered since 2011, they recovered significantly in 2021 and 2022.  The BOI said the annualized rate of return on equity (ROE) increased to 6.0 percent in 2021 and 9.0 percent in the first half of 2022. Government support measures for households and firms and the economy’s recovery in 2021 contributed to mitigating the effects of the pandemic on the quality of banks’ assets. While the BOI has not yet released ROE data for all of 2022, major Italian banks reported improvements in their profitability compared to 2021. The change in the banking sector’s profitability is linked to Italy’s economic growth outlook, rising net interest income because of changes in monetary policy, and reorganizational efforts to reduce costs and increase efficiency.

The ratio of non-performing loans (NPLs) to total outstanding loans has decreased significantly since its height in November 2015 during the financial crisis, as banks continue to offload NPLs and unlikely-to-pay loans.  As of June 2022, net NPLs decreased to €37 billion, the lowest since March 2009 and down from €51 billion in December 2020. ABI, the Italian banking association, reported the NPL ratio was 1.5 percent (net of provisions) in June 2022, compared to 1.7 percent in December 2021 and 9.8 percent in December 2015 when NPLs equaled €196 billion.  The GOI has also taken steps to facilitate acquisitions of NPLs by outside investors.

In 2016, the GOI created a €20 billion bank rescue fund to assist struggling Italian banks in need of liquidity or capital support.  Italy’s fourth-largest bank, Monte Dei Paschi Di Siena (MPS), became the first bank to avail itself of this fund in 2019.  The government currently owns 64 percent of MPS but failed to exit the bank by the beginning of 2022, as agreed with EU authorities. The government currently aims to offload its stake in the fall of 2023. The GOI also facilitated the sale of two struggling “Veneto banks” (Banca Popolare di Vicenza and Veneto Banca) to Intesa Sanpaolo in 2017.  While Italy’s Interbank Deposit Guarantee Fund (FITD) owned 80 percent of Banca Carige after an industry-financed rescue in 2019, Carige was subsequently bought by Modena-based BPER bank. This merger created Italy’s fourth largest banking group.

Government loan guarantees (to large companies via SACE, Italy’s export credit agency, and to SMEs via the Central Guarantee Fund, or Fondo Centrale di Garanzia) and repayment moratoriums also helped lead to a significant increase in credit to firms during the pandemic. The guarantee on SMEs and large companies (though SACE) were extended to December 2022. The repayment moratorium expired in December 2021. Despite some banking-sector M&A activity in the past several years, the ECB, OECD, and Italian government continue to encourage additional consolidation to improve efficiency. In 2022, Italy had 51 banking groups, three cooperative banks, and 45 stand-alone banks, as well as 81 subsidiaries of foreign banks (including 73 from EU member states and two from the United States). As of January 2023, there were 12 groups classified as “significant” under the EU’s Single Supervisory Mechanism.

The Italian banking sector remains concentrated on physical bank branches for delivering services, contributing to sector-wide inefficiency.  Electronic banking is available in Italy, but adoption remains below euro-zone averages. Cash remains widely used for transactions. The limit for cash transactions was raised from €2,000 to €5,000 as of January 2023.

Credit is allocated on market terms, with foreign investors eligible to receive credit in Italy.  Credit in Italy remains largely bank driven.  In practice, foreigners may encounter limited access to finance, as Italian banks may be reluctant to lend to prospective borrowers (even Italians) absent a preexisting relationship.

The Ministry of Economy and Finance and BOI have indicated interest in blockchain technologies to transform the banking sector.  Beginning in 2021, the Italian Banking Association implemented a Distributed Ledger Technology-based system across the Italian banking sector. The process aims to reconcile material products such as commercial paper or promissory notes that are exchanged between banks.

Foreign Exchange and Remittances

Foreign Exchange

In accordance with EU directives, Italy has no foreign exchange controls. There are no restrictions on currency transfers; there are only reporting requirements. Banks are required to report any transaction over €1,000 due to money laundering and terrorism financing concerns. Profits, payments, and currency transfers may be freely repatriated. Residents and non-residents may hold foreign exchange accounts. As noted previously, the GOI raised the limit on cash payments for goods or services from €2,000 to €5,000 as of January 2023. Payments above this amount must be made electronically. Enforcement remains uneven. The rule exempts e-money services, banks, and other financial institutions, but not payment services companies.

Italy is a member of the European Monetary Union (EMU), with the euro as its official currency. Exchange rates are floating.

Remittance Policies

There are no limitations on remittances, though transactions above €1,000 must be reported.

Sovereign Wealth Funds

State-owned investment bank Cassa Depositi e Prestiti (CDP) launched a strategic wealth fund in 2011, now called CDP Equity (formerly Fondo Strategico Italiano – FSI).  CDP Equity has €9.7 billion in invested capital and 18 companies in its portfolio, holding both majority and minority participations.  CDP Equity invests in companies of relevant national interest and on its website ( provides information on its funding, investment policies, criteria, and procedures.  CDP Equity is open to capital investments from outside institutional investors, including foreign investors.  CDP Equity is a member of the International Working Group of Sovereign Wealth Funds and follows the Santiago Principles. CDP’s investments are mostly in domestic assets and companies, even if the company has a significant international footprint.

Although there were large-scale privatizations in the 1990s and early 2000s, the state retains substantial holdings throughout the economy. Through the Ministry of Economy and Finance (MEF), the Italian government maintains direct or indirect interests in hundreds of companies – and appoints senior executives in the case of controlling interests. In 2023 it is estimated that the government will appoint 600 officials in 105 entities. According to financial daily Milano Finanza, as of January 2023 MEF held stakes (either directly or indirectly) in companies representing about 23 percent of Italy’s stock market capitalization. In several cases, MEF exercises its ownership via state-owned investment bank Cassa Depositi e Prestiti (CDP), which owns stakes in large Italian conglomerates like Ferrovie dello Stato (100 percent), Poste Italiane (65 percent), Enel (23.6 percent) and Leonardo (30.2 percent). In other cases, MEF takes a direct ownership share, such as with Leonardo (30 percent). In turn, many of these large companies own several smaller subsidiaries. Some, like ENEL, ENI, or Fincantieri, have a significant presence in the U.S. market.

Despite the Italian government’s shareholding positions, most of these companies operate in a competitive environment (domestically and internationally), are under private sector commercial laws, and are responsive to market-driven decision-making. In addition, as many of the state-controlled entities are publicly traded, this provides additional transparency and corporate governance obligations, including equitable treatment for non-governmental minority shareholders. With some exceptions, SOEs are subject to the same tax treatment and budget constraints as fully private firms. Additionally, industries with SOEs remain open to private competition. The government, however, has sometimes influenced these firms to make decisions that may differ from purely commercial objectives. For example, the former Alitalia received government financial support on multiple occasions to delay bankruptcy and preserve employment while national interest and energy security concerns may influence ENI and SNAM’s investment decisions.

As an EU member, Italy is covered by EU government procurement rules. As an OECD member, Italy adheres to the Guidelines on Corporate Governance of State-owned Enterprises.

Privatization Program

The government conducted a major privatization effort in the 1990s and early 2000s. The government retained non-controlling minority shares in some companies, like TIM (Telecom Italia) and “golden shares” (sufficient to maintain a controlling interest) in others such as ENI and ENEL. A tepid privatization program relaunched during the 2010s was largely halted – and in some cases reversed – during the pandemic. During the pandemic, the government acquired stakes in some entities either facing financial difficulty or considered strategic and at risk of a foreign acquisition. For example, the government took a 38 percent share of the Arcelor Mittal steel plant in Taranto (formerly known as ILVA). The MEF owns 64 percent of Banca Monte dei Paschi di Siena (MPS) after a 2017 bailout that cost taxpayers €5.4 billion. While the government agreed with the EU Commission to sell its stake by the beginning of 2022, it now hopes to sell the bank by fall 2023. The government is also negotiating the sale of state-owned ITA Airways (which assumed some of the former Alitalia’s assets). Other than MPS and ITA, the government has not announced any major privatizations.

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:
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: The Italian National Contact Point (NCP) for the Guidelines is in the Ministry of Enterprises and Made in Italy. 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: .

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

Department of the Treasury

Department of Labor

Climate Issues

The Integrated National Plan for Energy and Climate (PNIEC) issued in 2020 outlined Italy’s strategy from 2021 to 2030 in relation to decarbonization, energy efficiency, self-consumption vs. distributed generation of renewable energy, and energy security. After the adoption of more ambitious targets by the EU in 2021 – reducing net greenhouse gas emissions by at least 55 percent by 2030 and reaching net zero emissions by 2050 – Italy published its implementation strategy, called the Ecological Transition Plan (ETP), in 2022. According to the National Recovery and Resilience Program (NRRP), Italy plans to eliminate the use of coal by 2025 and bring renewables’ share of final gross energy production to 72 percent by 2030 and 95-100 percent by 2050. The NRRP earmarked €59 billion (approximately $66 billion) to incentivize renewable energy sources between 2021 and 2026. The private sector must follow current EU emissions regulations, since there are no specific Italian requirements.

After Italy’s ratification of the Convention for Biological Diversity in 2010, Italy adopted its first National Strategy for Biodiversity for 2010-2020. In December 2021, the Ministry for Ecological Transition (MET) launched the “National Strategy for Biodiversity towards 2030,” following the European Strategy for Biodiversity. Consultations with stakeholders are still ongoing.

Italy introduced the Ecobonus in 2012 to improve the energy efficiency of residential and non-residential units in Italy, as well as to reduce the consumption of fossil fuels and natural gas. The scheme allows for 65 percent of the expenses spent to increase energy efficiency in buildings (e.g., new heating and boiler systems; building external coating; windows replacement, solar panels) to be reimbursed as tax credits in ten equal annual installments. This tax credit applies to various buildings, including stores, offices, shops, hotels, and other hospitality buildings in addition to residential units. Since February 2023, people can deduct 90 percent of energy efficiency renovation expenditures from their tax returns over a ten-year period. In 2019, Italy introduced another Ecobonus to increase the incentives for buying electric and hybrid vehicles. The Ecobonus is scaled according to CO2 emissions and vehicle classes and was renewed in 2023.

Italy’s public procurement system is bound by international obligations under both the WTO Government Procurement Agreement and the EU Public Procurement Directives. Italy has over 22,000 contracting agencies at the central and local level that are subject to EU Directives on public procurement. GOI Ministries are the main central contracting agencies. At the local level, principal contracting agencies include regions, provinces, municipalities, and entities controlled by the municipalities, including local healthcare authorities. In 2002, Italy approved the “Environmental Action Strategy for Sustainable Development in Italy,” which states that at least 30 percent of goods purchased must meet ecological requirements and 30-40 percent of the vehicle fleet for durable goods must be energy efficient. In 2017, in compliance with the European Green Public Procurement directive, Italy made the use of “Minimal Environmental Criteria” (MEC) for acquiring products and services by public administrations mandatory. Since 2017, MET has identified the MEC for 20 categories of products and services. According to Italian budget law for 2020, public administrations must reserve a 50 percent quota for the purchase or rental of electric, hybrid, or hydrogen vehicles when renewing their fleet.

Resources to Report Corruption

Contact at the government agency or agencies that are responsible for combating corruption:

Autorità Nazionale Anticorruzione (ANAC)
Via Marco Minghetti, 10 – 00187 Roma
Phone: +39 06 62-289-571 or +39-800-69-36
Contact Info page:

Contact at a “watchdog” organization:

Transparency International Italia
P.le Carlo Maciachini 11
20159 Milano – Italy
T: +39 02 40093560
General web site: 

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, rising to 41st out of 180 countries for 2022 with a score of 56 out of 100. Italy’s score is well below the EU average of 66. According to Transparency International Italy has seen “gains from anti-corruption measures adopted in the last decade, including a new procurement code which has led to more transparency.” The organization noted that “political volatility” has delayed progress in “in key areas such as lobbying and corporate transparency.”

In 2018 Italy’s parliament passed an anti-corruption bill that introduced 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. 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.  In 2020, Italy’s parliament passed a decree that created an Inter-Departmental Working Group to formulate a code of risk assessment measures in a continued effort to prevent corruption in the government. No significant anti-corruption legislation was passed by parliament in 2021 due to a series of delays related to Italy’s COVID state of emergency. In March 2023 Italy’s government approved a decree to implement EU Directive 1937/2019 regarding the protection of whistleblowers.

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.
The U.S. Embassy has not received specific complaints of corruption from U.S. companies operating in Italy in the past year. The Embassy has received requests for assistance from companies facing a lack of transparency and complicated bureaucracy, particularly in the sphere of government procurement. 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. The OECD Working Group on Bribery reported in October 2022 that Italy strengthened its legislation and had increased its enforcement of foreign bribery. The report also expressed concern regarding the high rate of dismissals for foreign bribery cases and the statute of limitations and low-level of fines for companies engaged in foreign bribery. Among other recommendations, the OECD called on Italy to develop a comprehensive national strategy to fight foreign bribery and to proactively encourage companies to adopt anti-corruption compliance schemes.

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:

Unemployment continues to be a pressing issue in Italy, particularly among youth (ages 15-24). Italy has one of the EU’s highest youth unemployment rates at 22.9 percent (January 2023), while the overall unemployment rate was 7.9 percent (January 2023). Female participation in the labor market continues to limit economic growth. In January 2023, the female employment rate was at 51.9 percent – one of the lowest in the EU – compared to male employment at 69.7 percent and overall employment at 60.8 percent. Female unemployment was 9.5 percent compared to male unemployment at 6.7 percent. While employment has improved after the COVID pandemic, the data shows that the COVID pandemic impaired the already low levels of female participation in the labor force.

Word Bank data showed a steadily declining population in Italy since 2014, while Organization for Economic Cooperation and Development (OECD) data on inflation-adjusted wages showed that between 1990 and 2021, real wages in Italy grew by 1 percent. Unemployment and wage concerns continue to be factors in emigration.

The effect of the COVID-19 pandemic on the labor force has been uneven and substantial. Job losses were concentrated among self-employed workers and those on fixed-term contracts, especially in the services sector, penalizing younger workers and women. The unemployment rate did not increase due to the government’s ban on layoffs and a program that provided paid furloughs, which allowed companies to temporarily reduce staff during the COVID-19 emergency – without adding them to the ranks of the unemployed. Despite these measures, Italy lost 456,000 jobs in 2020 but recuperated 540,000 jobs in 2021 and an additional 459,000 jobs in 2022. Italy’s inactive population (neither working nor seeking work actively) was 33.9 percent in January 2023, a drop of 1.1 percent from January 2022 (corresponding to 478,000 people).

The labor market differs widely between the regions with industrial activity concentrated in the north and agriculture and tourism concentrated in the south. Most new jobs in 2021 and 2022 were in the services sector under temporary contracts (without unemployment insurance and social security benefits) and predominantly taken by young people and women. More experienced and older workers benefited from long-term contracts. 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 an employee’s skills and abilities) is also severe. Those underemployed usually find work in the service industry or other low-skilled professions in the large informal economy, which according to the latest available data from Italy’s statistics agency (released in October 2022) accounted for 10.5 percent of GDP, with undeclared work estimated slightly below 3 million full-time equivalent units. Approximations by World Economics and studies for the EU estimated Italy’s informal economy to be as high as 23.7 percent. The agricultural, services, and construction sectors stood out for high rates of undeclared work. However, there is anecdotal evidence of unpaid internships and trainee programs masking as de facto undeclared work in every industry as a precursor to securing a regular labor contract.

Labor force productivity a central weakness of the Italian economy – is below the EU average. Many Italian employers report an inability to find qualified candidates for highly skilled positions, demonstrating considerable skills disparities in the Italian labor market. The government has also reported difficulty finding qualified candidates to manage NRRP programs in the South. 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 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 is 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 regulations, 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 release 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 fall under rules established by the 2015 Jobs Act, a labor market reform package that contractually advanced employee protections that increased with tenure. During the first 36 months of employment, firms may dismiss employees for bona fide economic reasons. Under the 2015 Jobs Act regime, dismissed employees must appeal their dismissal within 60 days, and reinstatements are limited. Regardless of the reason for termination, 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 2015 Jobs Act measures include universal unemployment and maternity benefits and a reduced number of official labor contract templates (from 42 to six). For example, Italy’s unemployment insurance (NASPI) provides up to six months of coverage for laid-off workers. The government also provides worker retraining and job placement assistance, but services vary by region. Implementation of robust national active labor market policies remains in progress. The NRRP includes provisions for unemployment benefit reform and new active labor policies that the government approved as part of the 2022 budget. In 2018 the government introduced the “Dignity Decree,” which rolled back some structural reforms to Italy’s labor market adopted as part of the 2015 Jobs Act. For example, the Dignity Decree set limits on the renewal of short-term contracts (the government suspended the limit during the pandemic), made it costlier for companies to fire workers, and extended incentives to hire people under 35 years of age.

Italy offers residents other social safety net protections. In the 2019 budget, the government introduced the Citizenship Income (Reddito di Cittadinanza) program that provides a basic income of €780 per month to eligible citizens and acts as an employment agency to some participants. The estimated annual cost of the program was approximately €6.5 billion, but the pandemic increased the number of beneficiaries. The program benefits around 1.3 million households (or 3.1 million individuals).  In March 2021, the Ministry of Labor set up a committee to reform the Citizenship Income program. The 2022 budget provided extra funds to the program (€8.8 billion for 2022-2029) and implemented more stringent qualification criteria. The 2023 budget limits benefits to September 2023.

In 2019 the government implemented an early retirement plan (Quota 100), which changed the pension law and permitted earlier retirement for eligible workers aged 62 or older with at least 38 years of employment. The benefit expired at the end of 2021, although the government proposed a less generous early retirement pilot program in the 2022 budget and is actively negotiating pension reform with unions.

While the 2015 Jobs Act included a statutory minimum wage, the government has yet to implement the policy. With no national minimum wage, sector-wide collective bargaining determines prevailing wages. The government in 2016 established an agency for Job Training and Placement (ANPAL) to coordinate (with Italian regional governments) the implementation of many labor policies. ANPAL oversees the relocation allowance (Assegno di Ricollocazione), an initiative to provide unemployment benefits to workers willing to move to different regions, 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. However, the Citizenship Income program seems to have played a role in reducing poverty before the pandemic and limiting its rise in 2020 during the economic crisis. 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 and limited to highly educated workers that cannot find jobs in the South. At the same time, industry-wide national collective bargaining agreements set equal wages across the entire country.

Italy is a member of the International Labor Organization (ILO), and Italy does not waive existing labor laws to attract or retain investments. Collective labor agreements in different professions periodically fix the terms and conditions of employment. Italian unions fall 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 is usually affiliated with the World Confederation of Labor (WCL). The confederations negotiate national-level collective bargaining agreements with employer associations that are binding on all employers in a sector or industry.

Collective bargaining is widespread, occurring at the national level and used primarily by labor to secure compensation for inflation, cost-of-living adjustments and bonuses for increased productivity and profitability. Firm-level collective bargaining is limited, and the Italian Constitution provides that unions may reach collective agreements binding on all workers. There are no official estimates of the percentage of the economy covered by collective bargaining agreements. However, a 2019 estimate from the European Trade Union Institute estimated 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 the current practice renews collective contracts 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 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 through specific union-agreed dispute resolution procedures.
In cases of proposed mass layoffs or facility closures, the Ministry of Enterprises and Made in Italy (before October 2022 was named the Ministry of Economic Development) may convene a tripartite negotiation (Ministry, company, and union representatives) to reach a mutually acceptable agreement to avoid layoffs 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 COVID-19 pandemic, the government banned most layoffs through 2021. The end of the ban did not generate any relevant impact on layoffs and employment, and the 2022 budget extended the prohibition to April 2022.

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.

DFC (formerly OPIC) does not currently operate programs in Italy.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
Host Country Statistical source* USG or international statistical source USG or International Source of Data:  BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount
Host Country Gross Domestic Product (GDP) ($M USD) 2022 $2,007,522  


Foreign Direct Investment Host Country Statistical source* USG or international statistical source USG or international Source of data:  BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) 2021 $11,024  


$28,096 BEA data available at
Host country’s FDI in the United States ($M USD, stock positions) 2021 $51,533  


$34,373 BEA data available at
Total inbound stock of FDI as % host GDP 2021 25.3% 2021 21.6% UNCTAD data available at

* Source for Host Country Data: 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.

Table 3: Sources and Destination of FDI
Direct Investment from/in Counterpart Economy Data 2021
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment Outward Direct Investment
Total Inward $445,579 100% Total Outward $559,685 100%
The Netherlands $114,247 26% United States $51,838 9%
France $83,193 19% Spain $48,492 9%
Luxembourg $73,984 17% Germany $41,079 7%
Germany $37,332 8% The Netherlands $40,259 7%
United Kingdom $29,943 7% United Kingdom $36,025 7%
“0” reflects amounts rounded to +/- USD 500,000.

SOURCE: IMF Coordinated Direct Investment Survey (CDIS)

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

U.S. Embassy Rome
Economic Section
Via Vittorio Veneto, 119
Tel. 39-06-4674-2107

Mailing Address:
Unit 9500
Attn: Economic Section
DPO, AE 09624
Tel: +39 06 4674 2107

On This Page

  2. 1. Openness To, and Restrictions Upon, Foreign Investment
    1. Policies Towards Foreign Direct Investment
    2. Limits on Foreign Control and Right to Private Ownership and Establishment
    3. Other Investment Policy Reviews
    4. Business Facilitation
    5. Outward Investment
  3. 2. Bilateral Investment and Taxation Treaties
  4. 3. Legal Regime
    1. Transparency of the Regulatory System
    2. International Regulatory Considerations
    3. Legal System and Judicial Independence
    4. Laws and Regulations on Foreign Direct Investment
    5. Competition and Antitrust Laws
    6. Expropriation and Compensation
    7. Dispute Settlement
      1. ICSID Convention and New York Convention
      2. Investor-State Dispute Settlement
      3. International Commercial Arbitration and Foreign Courts
    8. Bankruptcy Regulations
  5. 4. Industrial Policies
    1. Investment Incentives
    2. Foreign Trade Zones/Free Ports/Trade Facilitation
    3. Performance and Data Localization Requirements
  6. 5. Protection of Property Rights
    1. Real Property
    2. Intellectual Property Rights
  7. 6. Financial Sector
    1. Capital Markets and Portfolio Investment
    2. Money and Banking System
    3. Foreign Exchange and Remittances
      1. Foreign Exchange
      2. Remittance Policies
    4. Sovereign Wealth Funds
  8. 7. State-Owned Enterprises
    1. Privatization Program
  9. 8. Responsible Business Conduct
    1. Additional Resources
    2. Climate Issues
  10. 9. Corruption
    1. Resources to Report Corruption
  11. 10. Political and Security Environment
  12. 11. Labor Policies and Practices
  13. 12. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs
  14. 13. Foreign Direct Investment Statistics
  15. 14. Contact for More Information
2023 Investment Climate Statements: Italy
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U.S. Department of State

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