When you are thinking of investing in Italy you've probably already read a lot of information about benefits of investing and doing business in Italy.
When you just Google "business investment" for this country you'll end up with huge lists of benefits of trusting your money to Italian economics.
There is almost no reason not to invest: strategical European location, convenient logistics, qualified human resources, high quality of lifestyle, rich history, authentic Italian style and class when it comes to the luxury market.
Or is there?..
A little bit of pre-story. Apart from running this website I have been for years (and still currently I am) involved into high level administration in a large international foreign holding, in its daughter company in Italy.
I have personally followed up all the issues related human resources, accounting, labour and work contracts, safety and security at work, subcontractors and legal paperwork, renting and buying real estate, etc. right from here - from the heart of Tuscany, Italy - Livorno.
Investing in Italian real estate also offers endless opportunities and benefits if you have to believe the web agencies who are trying to sell 4-5 million Euro villas to get their hard earned commission.
I do not blame anybody. These people need to attract foreign investment and make their money, but so do you. And this is why you are here, on this page.
The lines about investing in Italy you will read below may be shocking or hard to believe but I guess I just had to publish the truth from Insider's point of view, for you to make a right investment decision.
Whenever you are thinking of doing business in Italy, investing in stocks or in real Italian estate you can expect to take the advantage of the following benefits:
Central European location
This particularly concerns the north and central Italy which has got a good strategical location and infrastructure.
Convenient transport and logistics network
Wide spread railway, bus and airport networks together with good road connections.
Important tourist destination
Italy attracts millions of tourists each year which can be a great advantage if you are about to invest in Italy hotel, bed & breakfast, restaurant or any other tourism based activity.
This will also be in your favor when you are thinking of investing in Italy property to buy and let as it will be much easier to rent out, especially in high season.
All the other so called "benefits" I found on other websites (such as history, beautiful landscapes, sun, etc.) make me laugh. Do you actually care about rich Italian history if your investing in Italy is failing due to the law related issues?
I guess Italy is worldwide famous for its bureaucracy on many levels. There is an opinion that this is how Italians create vacancies for themselves. The amount of legal documentation to have in order (and on standby - in case of any check-ups) doesn't stop right after conducting a new business.
My strong advice is to get yourself a good fiscal advisor (commercialista, ragionere) to make sure you have all the documents in order. Then, depending on the type of a business investment you are planning to do, in some cases you will also need a good safety and security advisor (if you are running industry/production business).
These costs are very high but do not underestimate the importance of legal advice in Italy. Remember, lack of knowledge is not an excuse when it comes to paying thousands of Euro of penalties to the fiscal or security authorities.
Low productive Italian labour
This point may cause some resentment if you are Italian yourself but nevertheless these words must be spoken.
For foreign investors from northern countries of Europe (Germany, Holland, Norway, Denmark and others) or from the USA doing business in Italy, Italian working culture may seem outrageous.
Italians do not like to work. This explains why Italy hits the first place in Europe for the amount of strikes at work and the amount of unproductive hours due to illness and work accidents.
I will never forget when I came to my doctor at 4 months of pregnancy for a checkup and she offered me making a certificate that I do not have to work anymore until I deliver although I was not even experiencing any health problems.
Or when we just hired a new Italian employee for our company and after only 3 days of work he showed up at my office with an illness certificate for 3 months signed by his doctor, so the company couldn't fire him but just pay his salary all this period after just 3 days (!!!) he actually worked for us.
Another day I got called by another Italian employee that "she slept bad at night and can't show up at work", a week later she broke up with her boyfriend and couldn't work either, and another day she was experiencing a headache so showing up at work was also too much trouble...
I can go on and on with my own examples but I think you've got the bottom line: Italians like their relaxed lifestyle too much and you won't be able to change this never in your life. The solution we found for our company is not hiring Italian labour. The labour we have for years consists 85% of foreigners. This works perfect for us and saves a lot of unproductive hours.
Another "dangerous" thing concerning Italian labour is Sindicato - local trade unions. Whenever you decide to change labour policy concerning payments, holidays or anything else be prepared that it's in the culture here to just denounce the employer at trade unions and still expect to keep the job you give them.
Think twice before you hire Italian labour. There are many legal solutions to bring the labor force from elsewhere. This can be your most important profit saving decision when it comes to investing in Italy.
Expensive to hire employees
Having compared labour related tax, Social Security and other personnel contributions in Italy with other countries of Europe it appeared much higher here, with relatively lower average salaries. Paradox.
I guess this is how Italian state has to cover all that unproductive labour I have been talking about above.
As our Italian legal advisor said once to me: "Italian state is your largest business partner when it comes to sharing profits".
Depending on the type of business investing in Italy you are planning to do and the area you choose to do your business you may also face this problem. It is said that the majority of businesses on the south of Italy pay fees to mafia.
I do not have a personal experience with that (luckily!) since we are operating on the north of Italy but I know of the existence of "certificato antimafia" - anti mafia certificate - you may be requested to supply in some situations.
High Rent Tax
When you were thinking of investing in buying a residential property in Italy exclusively to buy and let keep in mind that apart from registering the rental contract fees you will also have to pay 20% of your monthly rent income to the Italian state.
Generally, rent rates are higher on the north of Italy and lower on the south, so are the real estate prices. Especially when you are taking a mortgage estimate everything very well first: what does it cost you a month with paying mortgage and how much you can get out of rent after paying the tax.
Currently most of foreign companies in Italy invest in tourism, fashion, electromechanical and pharmaceutical businesses.
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