Italy foreign Investments incentives
- The following may be indicated, among others, as reasons for the lack of attraction to foreign investors:
- Absence of a developed infra-structure.
- Rigid labor laws.
- As a general rule, 100% foreign ownership is recognized in most sectors other than the existing restrictions in defense industries such as aircraft industries.
- There are specific restrictions in the telecommunications industry in regard to overseas investors.
- In the banking sector, investments of over 5% must be approved by the Central Bank that, on occasion, will object to massive foreign investments.
Italy Benefits to Investors
- As a general rule, there is no discrimination between benefits granted to foreign investors and those granted to local investors.
- The benefits are given in the form of investment grants, loans at reduced interest or a state guarantee for exporters. Occasionally, the benefit is granted in the form of a combination of an investment grant and low interest loans, depending on the geographical location of the investment and the size of the investing company.
- In areas hit by unemployment, particularly in the south, an exemption is granted, subject to certain conditions, from corporation tax and local tax for a period of 10 years.
- Companies that invest a sum in excess of the average investment for the 5 previous years are eligible for a deduction from taxable income to the limit of the excess investment.
- Subject to terms and the geographical area, an investment grant of up to 65% of the investment may be obtained on investing in fixed assets.
- In no case shall the benefit exceed 50% of the taxable income.
Italy Research and Development Costs
- The benefit is given in the form of a grant.
- The grant will not be more than 50% of the amount invested in R & D.
- The grant covers expenses such as employees' salaries, the purchase of research equipment and intellectual property rights.
Italy Loans to Encourage Export
- Low interest loans are granted to encourage export from Italy to other countries.
- The loan is for up to 85% of the amount of products exported.
- Financing is given over 5 years as interim financing on overseas customers' payments for countries defined as economically established, or for 10 years for countries defined as poor.
Italy Free Trade Zones
- There are two free trade zones in the north: Venice and Trieste.
- The following benefits are granted, among others, to companies in free trade zones:
- An exemption from taxes on imported raw materials for re-export as manufactured goods.
- The company's right to bring employees from foreign countries subject to the labor laws of the country of origin.