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Why Start a Business in Italy?

La dolce vita. The sweet life. The Italian way of living. Even the arduous post-war years couldn't repress this romantic outlook on life. But things have not always been so optimistic. The boot-shaped nation has endured an ironic kicking to get to where it is today. It has overcome fascism, stereotype, corruption and negative foreign PR to prove its sheer brilliance, and continues to thrive as one of the top-ten economies in the world. Italy can now afford to flaunt and vaunt confidently, and there has never been a better time to join it on the catwalk of commerce.

We all know Italy does fashion, food and cultural finesse enviably well. You'd run out of fingers, limbs and any other anatomical features trying to count their brands and industries: Ferrari, Fiat, Lamborghini, Peroni, Armani, Versace, Gucci, D&G, Pirelli. The list goes on and on; brand is its middle name.

Italy may have refined the torture of bureaucracy to an art form, but it evidently gets things done. In fact, things get more than done. They get big. They get successful. They get exported. A salient propensity toward entrepreneurship is more than apparent. But where does the foreign investor come into all of this? Where do you fit in?

Flirting in Italy isn't just the reserve of the stallions and signoras. Its government and foreign investors have been wooing each other for years. There are numerous development agencies that will help you get an entrepreneurial foot in the door, providing many incentives, invitations and immunities. It's the corporate equivalent of paying for dinner; the difference being, there is always a happy ending.

Things don't really get more attractive than this, and if you're ready to make a commitment, then so is Italy. Read on to find out why it might just be a match made in heaven.

Living & Working in Italy

What is the currency and exchange rate?

The currency used in Italy, along with fellow EU members, is the Euro.

What is the population?

Italy has the fifth highest population density in Europe, with most of those residing in its capital, Rome. The population is 61.68 million.

What is the time difference?

Time Zone: GMT+1 hour.

How is the weather/climate?

Italy benefits from a fair and temperate climate. There are five main climatic zones: the Alpine zone, the northern Italian plain, the Tyrrhenian area, the Adriatic coast, and the Mediterranean zone.

The northern Alpine region experiences harsh winters with plenty of rain and snow, and very mild summers. However, the weather conditions vary greatly depending on altitude.

The northern Italian plain (or 'Po region') has continental weather conditions with fairly cold, snowy winters, but warm, mild summers. Northern cities such as Torino, and can become very cold, damp and foggy with temperatures falling to 0-7C (30-45F) in winter. Most rainfall occurs in the first half of the year.

The Adriatic region also bears cold winters. Conditions improve to comfortably warm in the summer.

On the west side of the country is the Tyrrhenian region where the weather brings cool winters, warm summers and sufficient rain. Temperatures in fluctuate between a low of 5-6C (40-42F) in winter, and a high of 26-30C (79-87F) during the warmer months.

In the Mediterranean region, which includes all the southern areas of Italy, rainfall is often in the winter months, leaving the summer months arid and hot.

Languages

Knowledge of English is reasonably extensive in Italian business, but far less so in the south. However, this does not mean you're off the hook!

The Italian language is part of the Romance language family that stemmed from the Latin language under the Roman Empire, alongside other languages like French, Spanish, Portuguese, and Romanian. With over 67 million native speakers under the European Union (EU) and 13 million people considering it their secondary language, it's not surprising that it's regarded as the second most widely spoken language in the EU. It's the official language of the Organization for Security and Co-operation in Europe and one of the languages used by the Council of Europe. For this reason, many businesses work with professionals in Italian translation services to ensure they can effectively communicate with the locals. By implementing the Italian language in your business you're opening up your business to not only the Italian market but to other markets across Europe.

Business people and investors need, if possible, to arrange a way of communicating in Italian with public authorities, agencies and potential business partners. The importance of personal contact in the Italian business sphere cannot be over-emphasised; and it's always best done in the nation's tongue.

Economic overview

Italy belongs to the Group-of-Eight (G8) industrial nations, the European Union (EU), and the Organisation for Economic Cooperation and Development (OECD).

One salient feature of the Italian economy is its propensity toward entrepreneurship - seen in the very high number of small and medium-sized businesses: 98% of the over 4 million companies employ fewer than 19 persons (the average is 4 employees per company).

Italy's economic virtue is, therefore, in the processing and the manufacturing of goods, mostly in small and medium-sized firms. The boot-shaped nation has been rather less successful in terms of producing world class multinational corporations. In addition, the small and medium-sized companies commonly manufacture products that are not as technologically advanced as their competitors and, therefore, cannot always meet international competition.

The most developed sectors of Italian industry include the manufacturing, mechanical, construction sectors, chemicals, and the transport industry. A significant contribution to national wealth is generated by products 'made in Italy'.

What are the key advantages to setting up a business in Italy?

The geographical position of Italy (at the centre of the Mediterranean and the infrastructural links with the countries of Europe) allows it to form a crossroads for international trade, a natural bridge between Europe and Africa.

Italy, particularly the prosperous north, has one of the highest per capita incomes in Europe. Italian consumers are sophisticated and demanding, particularly in terms of quality. Traditional, high-quality British consumer goods often do very well, and designer items or recognised fashion brands are also very popular. British technology, equipment and components have a good reputation, and innovative high-quality products are always of interest.

What are the essentials to know?

Foreign investors must be aware of the applicable EU Laws.

Foreign investors are free to adopt any form of business investment in Italy, and may acquire a stake in or take control of a company which has already been set up.

Selling business to Italy is best done by delegating an agent or distributor. However, caution must be taken in planning a written contract, probably best overcome with the assistance of a professional advisor. Verbal agreements can also be held good at law. Furthermore, it is not advised that you enter into contracts from a distance or on the foundation of meeting on neutral territory. Make sure you are familiar with your representative, his capabilities, assets (offices, staff, etc), customer base and industrial relations.

Setting up business in Italy should be approached similarly to any other developed and competitive market. Exporters need to be aware of cultural differences. Generally speaking, you need to develop an effective and reliable business relationship at a personal level. Vital personnel should be involved from the start and must be of a quality sufficient enough to converse with their Italian counterparts.

Businesspeople should find a way to communicate in English, whether written or spoken. Major businesses will have staff on all levels that are fluent in English, and English is more common in the business sphere than in the public.

Inaugural correspondence, as well as product literature and tender documents, should be translated into Italian by a professional, and ideally followed with an e-mail or telephone call. There are many business schools that can offer placements to aid you with this. Additionally, using the Italian language in documents, such as invoices, will help to clarify your intentions and eliminate confusion or misunderstanding.

Essential for companies is getting a product or service to the market on time. The main options for this are:

• Road
• Rail and air-freight
• Post, air parcel post or express/courier services

All these methods, of course, are dependent on the product requirements for time, expense and safety.

Italy generally has a sound transport infrastructure; although heavy traffic occasionally causes bottlenecks in and around the main northern and city centres. This can often lead to severe traffic limitations, making local delivery arduous. Heavy goods transport on motorways in is usually limited or sanctioned on Sundays and some public holidays. Infringement of this rule can at times lead to heavy fines, confiscation of driving licences and impounding of the vehicle. Freight transportation companies should also be alert of becoming the innocent targets of smugglers (i.e. drugs and tobacco).

Italian State Railways offer an inexpensive and reliable means of passenger transportation. Commercial freight is foremost carried by road, but the railways are also taking increasingly more long distance goods. Although, beware that some international rail freight services from have been the subject of infiltration by illegal immigrants travelling via to .

Storage

Warehouse and storage space is available in most major cities. However, it is recommended that you consult legal advisors before entering into any agreement.

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