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Entering the Market in Italy

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Entering the Market in Italy

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Why Expand to Italy?

A boot-shaped land right in the middle of the Mediterranean Sea, blessed by the sun for most of the year, with an astonishing cultural heritage and a legendary easy-going people attitude. That's Italy, a country positioned in the top-ten economies in the world. Italy is unique, lively and complex.

Ideas matter. And in Italy they matter even more. The Italian economy is in large part driven by the manufacture of high-quality consumer goods produced by small and medium-sized enterprises. Originality pays. What is sophisticated gains attention. The challenges of expanding a business in Italy may be as tough as rewarding. If you think you are up to it you should start immediately to get contacts. If you want more insight, keep reading. Good ideas may come up.

To start, let's go through some facts. Italy has a diversified industrial economy, which is divided into a developed industrial North, dominated by private companies, and a less developed, welfare-dependent, agricultural South, with high unemployment. Given the starting features, potentialities when setting up a business in Italy are in both. The country is home to approximately 59 million people, with an aging population due to growth rate close to zero. The country is divided in twenty Regions and more than one hundred Provinces.
Italy is one of the most urbanised European countries with heavy concentrations within and outside the main cities in Lombardia, Veneto, Campania and Tuscany. There are still some parts of Italy which are underpopulated, mainly because the Italian territory comprises vast mountain areas along the Alps, the Appennines, but also Sardinia and Sicily.

Agriculture is well-developed and organised. The main products are grapes, potatoes, sugar beets, soybeans, grain, olives, beef, dairy products, fish. Italian industry has evolved in the manufacturing and processing of goods, like machinery, food products, vehicles, electric appliances, integrated defence and security equipment, packaging, textiles and clothing, ceramics, tourism, commerce, telecommunications and services.

Italy won a large share of the global market as excellence dots the economic scenario. Leading sectors are precision machine tools, packaging, fashion, stylish furniture, luxury boats and other goods with a high design content. Italy also boasts excellent results especially in new materials, robotics, ICT, nanotechnologies, technologies for the food industry and for the preservation of the artistic heritage.
Italy is indeed widely associated with concepts like style, fashion and creativity. There is no reason to drop the stereotypes.

Attraction for UK business

In Italy British is synonym of positive, avantguard, cool. Italian consumers are sophisticated and demanding, particularly in terms of quality, but they are very sensitive about what comes from the UK. Traditionally, high quality British consumer goods often do very well and designer items or recognised fashion brands are also very popular. British technology, equipment, components and services have a good reputation, and innovative high-quality products are always of interest. The publishing sector from the UK is perceived as one of the most inspiring, together with design, music, fashion and textiles design. Consider licensing a business in Italy in these sectors.
British companies interested in investing in Italy must consider that Milan won the bid to host the Expo 2015. It will be a great occasion for a comprehensive regeneration of the city and its infrastructure, and also a gold mine of commercial opportunities.

Business opportunities

Due to the complex structure of the Italian market identifying opportunities by large sectors can turn to be tricky. The following list, retrieved from the UK Trade and Investment website, gives only a broad idea of where the opportunities may come from when expanding a business in Italy. What will count more are your business instinct and the feasibility of your business plan. An in-depth market research is highly recommended.

You may look at the following sectors:

Airport and ground support equipment (anti-intrusion systems, automated baggage handling systems, CCTVs, approach surveillance radars, sea rescue equipment, precision approach path indicators and radars, digital x-ray systems, fire detection and extinguishing equipment, window metal detectors, as well as Explosive Trace

Detection Systems

Clothing, Footwear and Fashion (young, directional, urban fashion)

Construction (insulation materials, green building)

Creative & Media (publishing, in particular books, novels and books for children).

Energy and renewable power (hydrogen, photovoltaics and biomass technologies, energy management systems, integrating energy solutions such as solar panels right into the structure of homes and buildings that push the envelope in both innovative design and cutting edge technology)

Environment (sustainable waste management, innovative technologies for treating waste flows and increasing the co-efficiency of waste cycles, recycling, biodegradable polymers, innovative waste-to-energy and biogas plants)

Food & Drink (vegetarian and ethnic food is not widely available and represent an expanding market; blended whisky, speciality beer)

Homeware and furniture (upholstered products, kitchen and bathroom furniture and fittings, lighting, textile furnishings, new technology, energy-saving and environment-friendly solutions)

Healthcare (high frequency medical lasers, endoscopes and diagnostic imaging equipment non-invasive and micro-surgery devices and equipment, anesthesiology equipment, EKG, stimulators and defibrillators, monitoring equipment, telemedicine equipment and services). A large percentage of medical equipment in Italian healthcare facilities is obsolete, and it is estimated that 30-35 percent are in need of replacement.

ICT (improving Internet access infrastructure and technologies, wireless hardware and services, PC notebooks, PC servers and innovative storage solutions)

Infrastructure Projects (some of the priority works are in Southern Italy the Salerno Reggio Calabria highway, the Jonica main road, the Messina Catania railroad, the subways in Naples and in Palermo. In Northern and Central Italy, two main groups of works compete for funding: the Expo 2015, which will be held in Milan, and a few strategic railroad projects that are ready and waiting for funding)

Security (biometric technologies)

Nanotechnologies (agro-industry: nanostructured packaging, biosensors for controls on meat, fish, dairy products, wine, and oil), plastics and rubber, mechanics for biomedical instruments, leather and shoes, household products such as furniture and sanitary implements, textiles

Tourism

Industrial activity is concentrated in the North in a large district that runs from Turin in the west through Milan to Venice in the East. This is one of the most industrialized and prosperous areas of Europe, and accounts for some 50 percent of national income. By contrast, Italys southern region, or Mezzogiorno, is less developed. Rome, the capital, is a busy economic centre. Other major cities that may offer a strategic location for setting up a business in Italy are are Bologna, Florence, Genoa, Arezzo, Ancona, Naples, Bari, Reggio Calabria, Palermo and Cagliari.

Challenges

Expanding a business to Italy always requires a certain grade of adaptation and difference-awareness. The Italian business etiquette is very different for the British standards, in particular in the South of the country. The language may also represent an obstacle, as English is not always spoken, even in business environments. When thinking about expanding a business in Italy, keep in mind the high level of regional segmentation.

Moreover, it cannot be forgotten that Italy deals with some persistent problems, including organized crime, corruption, slow economic growth. In some parts of the country they may become serious obstacles for foreign companies setting up a business in Italy. Italy has also a sizable underground economy, which by some estimates accounts for as much as 15% of GDP. These activities are most common within the agriculture, construction, and service sectors. Competition is such sectors may become unfair.

Last but not least, the legendary Italian bureaucracy. It can seem overwhelming, but the help of a trusted local advisor when registering a business in Italy can solve most of your problems.

Click here to Ask an Expert about Entering the Market in Italy

Organisations that can assist with Entering the Market

  • > Legal Absolute

    Legal Absolute provides a bespoke advisory service across a range of areas for international clients. We combine a fresh approach with professionalism and expertise, offering comprehensive, tailored services in today’s global and competitive market.

    More Details Visit Website
  • > PEO Worldwide Limited

    PEO Worldwide is an international PEO offering employer of record, payroll, employee benefits management, HR and compliance services throughout the world.

    More Details Visit Website
  • > Blue Marble Global Payroll

    Simplified Global Payroll Companies with global employees often find that managing payroll in multiple countries is complicated - different systems, laws, and languages in each country, lack of reporting, and constantly changing laws and regulations each year. Trying to manage global payroll via fax and email with excel spreadsheets leads to data security issues, fines, and penalties for non-compliance. Blue Marble has solved global payroll challenges with cloud-based technology, aggregated reporting, and a hybrid service model in 135+ countries around the world.

    More Details Visit Website
  • > Instant Offices

    Finding office space abroad poses one of the most difficult changes that many start-ups face. Location, costs, and transport all need to be considered. And, more crucially of all, what office will allow a new business to attract and retain the best staff?

    More Details Visit Website
  • > Company formation services.

    Need to register a company or setting up a company?

    More Details Visit Website
  • > LANTERI & ASSOCIATI

    Lanteri & Associati is an independent Italian Tax and Law Firm founded on 1978.

    More Details Visit Website
  • > Business Consultancy Services.

    Do you need advice from an expert in your field, on the ground? Need help finding the best route to market for your product or service?

    More Details Visit Website

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