At the same time as it increases its global exports, Italy is also attracting ever higher levels of foreign investment, especially from companies in developing countries which are looking to secure a foothold in more stable economies.
One of the core topics of discussion in Davos this year has been the turmoil in the world’s largest emerging markets; to help investors from these countries and others set up and run businesses in Italy, the government of Prime Minister Matteo Renzi has carried out a wide-ranging series of legal and tax reforms.
As a result, in AT Kearney’s FDI Confidence Index 2015, Italy increased its position to 12th overall, a rise of eight places. In 2014, the country experienced the highest growth rate among European countries for inward greenfield FDI projects.
“Thanks to the reforms, there is now a greatly improved working environment in Italy for investors,” says Riccardo Monti, President of the Italian Trade Agency (ITA). “Italy has significant competitive advantages for manufacturing and exporting high-end products such as pharmaceuticals and industrial equipment. We are seeing a lot of interest from investors in developing countries, who want to invest in Italy as a more secure platform for growth. ”
Renzi’s government has identified 50 measures to enhance the country’s economic competitiveness and has so far approved over 75% percent of them, including removing obstacles to hiring, new rules on dismissals and introducing generous tax credits for R&D.
“This year, the government will complete the implementation of what we consider the most comprehensive structural reforms in any European country, and they will make Italy an even more attractive place for business.” Riccardo Monti, President of the Italian Trade Agency
As part of the reform process, the ITA has set up a new Foreign Investment Department and has stepped up promotion activities internationally; the agency is opening nine foreign investment desks in strategic markets including Istanbul, London, Dubai, Singapore and Shanghai.
“We see a very positive outlook for our economy driven by strong exports and continued growth in FDI. In recent years investors have been drawn to developing markets, but now they are now looking for more security,” Monti says. “They can come to Italy, enjoy all of the advantages of an advanced economy, and still access 800 million people within a three hours’ flight.
