Italy’s Economic Landscape: Opportunities and Reforms for Global Investors
Italy is making strategic moves to strengthen its economic landscape and attract international investment, as revealed in the May 2025 edition of Business Insights from Italy, published by The European House – Ambrosetti. Despite global uncertainties and a sluggish German economy, Italy posted a modest GDP growth of 0.6% year-on-year in Q1 2025, aligning with the EU average. But the real story lies in the country’s resilience, reform, and readiness for foreign capital.
A Resilient Trade and Industrial Backbone
Italy’s trade with non-EU countries surged, with exports up 7.5% year-on-year in March 2025, driven by capital and consumer goods. Notably, exports to the U.S. jumped by over 40%. Significant growth was also recorded in exports to MERCOSUR countries and OPEC countries. Italian companies exhibit, on average, a stronger financial position compared to their counterparts in the other major European economies.
The industrial sector, employing nearly 4 million people, remains a cornerstone of the economy, especially in regions like Lombardy. Despite a dip in production, employment rose, showcasing the sector’s adaptability.
Streamlined Incentives for Business Growth
A major reform—the new Incentives Code—has reorganised Italy’s public support system for businesses. This digital-first framework simplifies access to incentives and enhances transparency. It’s backed by the EU and integrated into Italy’s National Recovery and Resilience Plan, making it a model for other nations.
Transition Plans Fueling Innovation
Italy’s “Transizione 4.0” and “Transizione 5.0” plans are injecting billions into technological and energy transformation. These initiatives have already spurred thousands of new jobs and billions in additional turnover, especially benefiting SMEs and micro-enterprises.
Attractive Tax Scheme for New Residents
Italy offers a compelling tax scheme for new fiscal residents, including a flat tax on foreign income and exemptions on wealth and inheritance taxes. This regime, lasting up to 15 years, is designed to attract high-net-worth individuals and skilled professionals.
Personalised Support for Investors
Foreign investors can access tailored assistance through the Invest in Italy platform, which offers help with site selection, permits, incentives, and staffing. This hands-on approach reflects Italy’s commitment to helping foreigners with smooth investment journeys.
Read the full publication here: Business Insights from Italy – May 2025
Business Insights from Italy – A Letter to International Investors is a publication by The European House – Ambrosetti, in collaboration with the Italian Ministry of Foreign Affairs and International Cooperation.