Italy boasts sophistication and discernment not only in its people but also in its business practices.
The Italian market is prosperous and highly competitive and has proven to be a front-runner for UK trade for many years.
It is the seventh largest global market for British exports and, after Germany and France, the UK is the third largest supplier to Italy.
SOPHISTICATED ITALY
With more than 1,000 British companies participating in the Italian market, there is at present twice as much British investment in Italy creating a balance of trade that falls in Italy’s favour.
UK exports have also suffered over the last few years from the strength of sterling, whereas Italian exports to the UK have made considerable progress.
Italy’s efficient and versatile local industry has more than half its employees working for (usually family owned) small and medium sized enterprises (SMEs).
Many Italian companies are export orientated and therefore expert at cross-border alliances, sometimes providing opportunities for co-operation with British companies in third markets.
British products have a good reputation in Italy
British technology, equipment and components have always had a good reputation in Italy and, despite the current price issue, innovative and high quality goods are always of great interest to the Italian end market.
Having one of the highest per capita incomes in Europe and a savings ratio second only to Japan, Italy has a high level of consumer spending, particularly in the wealthier north. Traditional, top-quality British goods are likely to do well.
Italy adopted the Euro in 1999 and subsequent Government policies have been directed at the structural reform of the economy and at ironing out bureaucratic impediments to investment.
The ongoing liberalisation programme (especially in the energy and telecoms sectors), and the adoption of the British concept of public/private partnership are creating new and exciting investment opportunities for UK companies.
Sectors ripe for investment are Aerospace, communication, clothing, design, creative and media, security, IT, food and drink, medical, oil and gas and telecommunications.
Although southern Italy is less developed than the north and suffers some long-standing structural problems, there are some areas of rapid growth, specifically in ports and electronics.
The preferred methods of market entry for UK business in Italy are, as with any Western European country, joint ventures, owned or partly owned subsidiaries or partnerships. Having an Italian partner is always a good first step, but there are no obstacles to outright purchases or setting up green-field sites.
The Italian market is considerably different to the UK’s and the potential exporter, investor or business settler must dedicate plenty of time and resources to establishing good personal relationships locally, whether for representation, joint venture or sole proprietorship of a venture.
It is imperative in Italy to build up an effective business relationship at a personal level and staff responsible for market development, sales and technical product support should be hired from the start of your venture and must be capable of sustaining a dialogue with their senior Italian counterparts in the business.
Despite there being no legislation limiting foreign investments in Italy and no local industries closed to private enterprise, Italian bureaucracy at local, regional and especially national levels is notorious for delays and ineptitude.
Unfortunately, the Government’s policy aimed at rectifying these obstacles is proving hard to implement due to the deferment of many statutory responsibilities for business to local Governments and a public service that is rather resistant to change.
Seek legal, fiscal and financial advice before starting any business venture.
Banking services are improving
Fundamental changes are currently being made to the Italian banking and financial system. The country’s 800 independent local retail banking and savings institutions have traditionally provided much of the corporate management for local industry but they are now rationalising services and forming alliances within larger groups with national and international banks.
The main Italian banks have offices in London and trading arrangements with British banks.
Italy has numerous local services offering legal, business management, financial and taxation advice in all areas of business establishment for international clientele.
Subsidies and incentives available to foreign investors
There are Government subsidies and tax incentives, along with grants for green-field sites and expansion of existing plants available to foreign investors, all of which comply with EU rules.
Additional incentives are also available in certain special status areas, in particular SMEs. The Government development agency, Sviluppo Italia and its subsidiary, Invest in Italy, aim to help foreign investors gain information on incentives for investment and are available in English.
The British Chamber of Commerce for Italy can arrange introductions to its members who include lawyers, accountants, tax advisers, translation and interpretation services and executive and staff selection agencies.
It can also advise the individual on suitable executive serviced offices which may be needed as a base in the start up phase of any business venture.
