Doing Business with Italy
|State system||parliamentary republic|
|Head of State||Sergio Mattarella|
|Head of government||Mario Draghi|
|Nominal GDP (billion USD)||2,747.50|
|Economic growth (%)||6.5|
Italy is a parliamentary republic. The head of the Italian state is the president, who appoints the prime minister. Parliament consists of 2 chambers: the Chamber of Deputies and the Senate. The country is administratively divided into 20 regions. 5 of them have a special autonomous status, thanks to which these regions can adopt legislation regulating some local matters. Italy is the 8th largest economy in the world and the 3rd strongest economy in the Eurozone. It is the world’s 8th largest exporter and the world’s 11th largest importer. The tertiary sector generates 69% of GDP and employs 70% of people. Industry contributes 29% to GDP and 25% to employment. Tourism accounts for 12% of GDP. Despite several unmistakable global companies, small and medium-sized companies play a key role in the local economy, and many of them excel in their field. Italy ranks among the leaders in the engineering and pharmaceutical industries, automotive and agri-food industry, furniture and robotics. It belongs to the leading creators of design and luxury products. According to the Human Development Index, Italy has a high standard of living and ranks 8th in the world in the ranking of the quality of life. However, the real wage fell by 8.3% in the period 2010-2020 and million employees are on the poverty line. The popularity of the “Made in Italy” brand is growing, especially after winning the football EURO, the Eurovision Song Contest and being voted country of the year by The Economist magazine. Italy is a founding member of the EU, the Eurozone, the OECD, the G20, with Italy taking the presidency for the first time in the first half of 2021. Italy owns the third largest gold reserves in the world and is the fourth largest contributor to the EU budget. Italy is the sixth most important trade partner of the Czech Republic. The Czech Republic ranks 16th for Italian exports and 14th for imports. The volume of bilateral trade is constantly growing and reached a record volume of EUR 1billion in 2021. The Italian market is highly competitive and saturated. In addition, there are considerable differences between regions, especially between the north and the south, which must be taken into account when entering the Italian market. Products with high added value or with exceptional technical parameters have a chance of success. To begin with, it is strategic to use the services of sales representatives who know the local markets and are connected to the customers. On both sides of the trade exchange, means of transport and the automotive industry are the most prominent elements. From the Czech Republic, in addition to cars and motor vehicles such as tractors, buses and their parts and accessories, reactors and boilers, automated data processing machines, tobacco products, iron and steel products, plastics, optical devices, glass, paper and paper products and food products. Long-term perspective fields include construction, the transport industry, the water management sector, where the Italian government is planning to invest in the restructuring of water networks, the space industry and smart technologies. The Italian economy is projected to grow by 2.2% in 2022, reflecting the ongoing pandemic, rising energy prices and Russian aggression in Ukraine.
Practical telephone numbers (emergency services, police, firemen, information lines, etc.)
First aid: 118
Important web links and contacts
- National Agency for Investment Promotion and Business Development (Invitalia): www.invitalia.it
- Commercial Register of Italy: www.registroimprese.it
- Government Office: www.governo.it
- Chamber of Deputies: www.camera.it Senate: www.senato.it
- Office for the Protection of Economic Competition: www.agcm.it
- Italian Statistical Office (ISTAT): www.istat.it
- Italian Post Office: www.poste.it
Addresses of selected ministries:
- Ministry of Foreign Affairs and International Cooperation, MAECI – Ministero degli Affari Esteri e della Cooperazione Internazionale (colloquially “Farnesina” or “Esteri”) www.esteri.it
- Ministry of Economy and Finance, MEF – Ministero dell’Economia e delle Finanze www.mef.gov.it
- Ministry of Economic Development, MISE – Ministero dello Sviluppo Economico www.sviluppoeconomico.gov.it
- MIT Ministry of Infrastructure and Sustainable Mobility – Ministero delle Infrastrutture e delle mobilità sostenibili www.mit.gov.it
- Ministry of Agriculture, Forestry and Food Policies, MIPAAF – Ministero delle Politiche Agricole Alimentari e Forestali www.politicheagricole.it
Addresses of some newspapers:
- IL SOLE 24 ORE (main economic daily in Italy, owner: General Confederation of Italian Industry) www.ilsole24ore.com
- MILANO FINANZA (another important economic newspaper in Italy, focusing on financial markets) www.milanofinanza.it
- LA REPUBBLICA www.repubblica.it
Internet addresses of Italian regions:
- Valle d’Aosta: www.regione.vda.it
- Veneto: www.regione.veneto.it
- Emilia Romagna: www.regione.emilia-romagna.it
- Friuli-Venezia-Giulia: www.regione.fvg.it, www.madeinfriuli.com, www.friulionline.com
- Liguria: www.regione.liguria.it Lombardy: www.regione.lombardia.it Piemonte: www.regione.piemonte.it
- Toscana: www.regione.toscana.it Trentino-Alto Adige: www.regione.taa.it, www.provinz.bz.it Abruzzo: www.regione.abruzzo.it
- Basilicata: www.regione.basilicata.it
- Calabria: www.regione.calabria.it
- Campania: www.regione.campania.it
- Lazio: www.regione.lazio.it
- Marche: www.regione.marche.it
- Molise: www.regione.molise.it
- Puglia: www.regione.puglia.it
- Sardegna: www.regione.sardegna.it
- Sicily: www.regione.sicilia.it
- Umbria: www.regione.umbria.it
PaulSourcing: Ten Commandments for doing business with Italy
The PaulSourcing agency has prepared ten recommendations for doing business with Italy for Czech entrepreneurs interested in business relations with Italy.
- Arm yourself with patience and don’t just give up.Prepare for a long negotiation process, complex communication, possible interruptions by Italian companies. Italians have a need to negotiate and agree on everything. Italian businesses are often characterized by disorganization, chaos, emotion and sometimes superiority.
- You can’t do without Italian, if you don’t have it, bring an interpreter to the meeting.English is common only in larger companies in the north of Italy, and “Italian English” is very different from common “European” English. If the Italian has a choice and can avoid communicating/doing business in English (that is, even with a client who does not speak Italian), he will do so, even if the offer is more attractive. It is not appropriate to discuss the topic of religion, the mafia, or speak negatively about Italy with an Italian partner.
- For the first contact, it is better to make a phone call than to send an email or fax.Italians, like all southern nations, prefer personal contact above all else. Many Italian companies are willing to cooperate only after a longer acquaintance with the partner.
- Different pace of negotiations (Italy the Czech Republic, northern Italy vs. southern Italy).In a business meeting, it pays to let Italian customers do the talking initially, as the directness of a business conversation can come across as curt and terse. This does not correspond to the Italian culture, where there is openness and relaxation.
- Don’t underestimate your appearance.Italy always sets fashion trends, and Italian retailers follow suit. At first glance, you can recognize them by their high-quality and perfectly polished shoes, tie and perfectly fitting suit. They judge a new business partner accordingly.
- Only seemingly unimportant is the hierarchy within the company.The opposite is true. Italians suffer from titles and addresses. At the beginning, always address the Italian partner by title and name, and let the Italian make the first move towards a less formal approach. They appreciate good manners and professionalism. Italians only deal with the top management of the company.
- Get ready for Italians to be brilliant rhetoricians .They are known for their intense pressure on low prices, which are among the lowest within the EU countries. An Italian never accepts the first offer. You are expected to leave room for the discount. If you don’t, the Italian will consider you a bad businessman and avoid doing business with you.
- Great emphasis on the design of both products and promotional materials and packaging.Do not underestimate the time spent preparing your marketing materials and website at least in English, ideally in Italian. In Italy, it is necessary to have an accurate, concise, well-crafted and original corporate presentation prepared that will impress. Catalogs and promotional materials must be in perfect quality. Beware of inappropriate promotional photos or logos: avoid religious and “tickling” motifs.
- Before entering into a specific business cooperation with an Italian partner, always check his credibility .After that, check the credibility repeatedly at regular intervals. The current payment morale in Italy is one of the worst in the EU countries. The PaulSourcing office in Milan can help you with this. Pay due attention to the conclusion of the contract with the partner, ideally consult with lawyers with knowledge of Italian law. It will pay off for you.
- Innovation and original solutions are the Italian “weakness” in many sectors.If you offer innovative, interesting and creative solutions, your chances of success will be many times greater.