Exporting to Italy An overview of the Italian business environment For SMEs exploring new market opportunities

Share this Ebook www.ibtpartners.com An IBT Partners Ebook Publication© Table of contents Who should be reading this 3 Please see our website for more information and help on international Italy: Overview 4 business development: Political snapshot 5 www.ibtpartners.com Economic snapshot 6 More Exporter’s Guides available Main sectors 7-9 including: Main sectors geographically 10 Exporting to Canada Exporting to Europe Main companies 11 Exporting to France Imports and exports 12 Exporting to Germany Exporting to Spain Import regulations 13 Exporting to Scandinavia Labelling and marking requirements 14 Exporting to the UK Foreign direct investment in Italy 15 Exporting to the USA Next steps 16 Produced by the IBT Partners About IBT Partners 17 Publications Team. Contact us for more information Special offer 18 at: [email protected] Useful links 19 Share this Ebook

www.ibtpartners.com Exporting to Italy p.2 Who should be reading this… Whether you are already exporting or just setting out, this Ebook will help you discover more about Italy – the essential facts and figures to help determine next steps and ideal routes to market.

E ase of doing business in Italy...

The World Bank summarizes DOING BUSINESS DOING BUSINESS Doing Business 2013 data 2013 RANK 2012 RANK for Italy. The overall "Ease 73 75 of Doing Business" in Italy (out of 185 economies) and the rankings by each topic.

http://www.doingbusiness. org/data/exploreeconomies /italy

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www.ibtpartners.com Exporting to Italy p.3 Italy: Overview • 9th largest economy in the world • 4th largest consumer market in Europe • 6th largest exporter of goods in the world • Healthcare system ranked 2nd out of 180 economies (WHO) • Contains 2 independent states: the Republic of (25 miles2) and the (just 108.7 acres) • Over 50 million tourists a year - huge driver of the economy and large contributor to national income • Family-owned SMEs account for 92% of all Italian companies, responsible for 70% of Italian GDP

GDP (US$) Head of State Capital Government $2.19tr President Giorgio Rome Type Napolitano (since Republic 2006)

Head of

Government Per Capita GDP Prime Minister Population at PPP (US$) Land Area Enrico Letta 61,017,000 $32,350 294,020 km2 (since 2013)

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www.ibtpartners.com Exporting to Italy p.4 Political snapshot Government Military spending

In April 2013, President Napolitano was elected Italy’s military spending is significantly less than for a second seven-year term , despite being that of France or the UK. Nevertheless, in 2010 87-years-old. His election followed five votes in Italian military spending ranked 10th in the world which no candidate was selected. and Italy is a major contributor to international and UN missions. Following his election, Enrico Letta of the center-left Democratic Party was selected as The Five Star Movement Italy’s new Prime Minister. A grand coalition with The Five Star Movement, founded in 2009 by Silvio Berlusconi’s center-right alliance followed. comedian Beppe Grillo, gained momentum in the International relations most recent parliamentary elections, finishing in As a geo-political ‘middle power’ Italian executives 3rd place and gaining 25% of the public vote. In have endeavoured to win recognition at the table of the 2013 municipal elections however, they fared the Great Powers. The search for legitimization poorly. through international coalitions and alliances has been the cornerstone of Italy’s choices on the Commentators noted its popularity stemmed international stage. from a reaction against the scandals surrounding Italy’s leading parties. This was recently exemplified by Italy’s decision to bide by NATO’s 2011 resolutions on Libya. The Five Star Movement promotes direct democracy and greater political transparency.

www.ibtpartners.com Exporting to Italy p.5 Economic snapshot Economy Growth rate Italy introduced a deficit correction of €12Bn The engineering sector and the manufacture of in 2011, and Italian public debt is expected high-quality consumer goods are key drivers of the to decline from 119% in 2010 to 116.3% in Italian economy. Both sectors are dominated by small 2014. and medium-sized enterprises, many of them family owned. There is concern over Italy's birth rate - one of the lowest in Europe - and the economic Family-owned SMEs account for 92% of all Italian implications of an ageing population which companies, responsible for 70% of Italian GDP. could further stunt Italy’s economic growth.

Wealth distribution Annual GDP Growth Rate (%) 3.0 Industrial activity is concentrated in 2.0 the north, from Turin in the west, 1.0 through Milan, to Venice in the 0.0 east. This is one of the most -1.0 industrialized and prosperous areas -2.0 in Europe and accounts for more -3.0 -4.0 than 50% of Italian national income -5.0 -6.0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Share this Ebook % 0.5 0.0 1.7 0.9 2.2 1.7 -1.2 -5.5 1.8 0.4 -2.3 -1.2 -0.2 1.1 1.0 0.6 Source: International Strategic Analysis (ISA) Economic Forecasts www.ibtpartners.com Exporting to Italy p.6 Main sectors

Apparel – design and luxury goods

• The apparel retail industry reached $66.1Bn in 2012 • Italy currently accounts for 7.4% of the Engineering and construction European apparel market • Italy ranks 3rd in the world for its luxury • Italy accounts for nearly 10% of the goods market European construction and engineering • Apparel and non-apparel manufacturing is industry in value terms forecast to reach $12Bn by 2017 • The sector accounts for roughly 40% of • The industry is lead by companies such as Italy’s total industrial production the Benetton Group (2011 revenue of • The sector is dominated by family-owned $2.8Bn) with a cluster of world renown businesses brands (Fendi, Ferragamo…) • International companies such as Balfour • Italy also boasts a vibrant artisan and Beatty and have major presences craftsman culture, reflected in numerous • The Italian civil engineering sector is worth specialised high quality design and apparel $24.7Bn, while the construction and manufacturers engineering market is $63.5Bn • The medical equipment engineering has attracted over $2.5Bn of M+A investment in the last 5 years Share this Ebook

www.ibtpartners.com Exporting to Italy p.7 Main sectors Information and Communication Technology Logistics

• Italy is Europe’s 4th largest ICT market • Italy’s prime geographic location in the centre • ICT sector value reached €68.1bn in 2012 of the Mediterranean makes it a natural logistics • Italy has one of the most advanced mobile hub for the region communications markets in the world • Over the last decade, 462 logistics companies • 97,000 active IT companies - the UK being have invested in Italy the only country with a greater number • Italy accounts for 9.5% of the European freight • Telecom Italia is the largest company in the transportation services industry by value sector, recording revenues of $41.7Bn in 2011 • The Italian road freight segment, buoyed by traffic from the southern Mediterranean up to Life Sciences central Europe, is one of the largest with total • Italy has the 3rd largest life sciences industry revenues of $55.2Bn in 2012 in Europe • 375 biotech companies • Overall turnover of $31.2Bn • In 2012, R&D spend of Italian biotech companies reached $2.41Bn • Italian biotech have attracted considerable international attention and the sector has seen a high level of acquisitions Share this Ebook

www.ibtpartners.com Exporting to Italy p.8 Main sectors Renewable Energy Sources (RES)

• Italy accounts for 16% of the European Food and wine renewable energy market and was valued at over $23Bn in 2011 • The Italian food retail • Italy has one of the highest energy import industry was valued at $196.7Bn in 2012 dependence rates of the EU. Lowering this and • Accounts for 10.2% of the European increasing renewables is at the heart of Italy’s food retail industry value energy policy • Italy accounts for 21.2% of the • Renewable incentives rank amongst the European ice cream value (valued at highest subsidies for RES in the world $5Bn) • The sector attracts considerable foreign • The Italian wine investment, with the most number of deals in market reached $38Bn in 2012

Europe, as it is perceived as having strong long Tourism Industry term growth prospects • Italy’s investment in renewable energy is the • $174Bn revenue 4th largest of all G20 countries • Contributes +8.6% of GDP • Southern Italy has some of the world’s • Employs over 1.1 million qualified workers largest solar PV parks due to its high level of • Over 50 million tourists travel in Italy every year utilization at +1,500 hours a year • An estimated 153,000 accommodation facilities • The largest company in the sector, Enel across Italy Green, recorded $1.7Bn of revenue in 2011 • International hotel chains make up 28% of hotels in Italy www.ibtpartners.com Exporting to Italy p.9 Main sectors geographically The north east of Italy is Milan is the business home to Europe’s nerve centre and home largest outdoor apparel to many high tech and industries, intensely telcoms, including concentrated between industry leaders Telecom Venice and the Austrian Italia Border Turin is the historic Rome and the centre for heavy surrounding area is the industry, dominated by second largest economic the Fiat Group zone after Northern Industrial activity is Italy

concentrated in the

north, from Turin to The south and notablyafter Venice. This is one of the the ports are the most industrialized and gateway to the Southern prosperous areas in Mediterranean and the Europe and accounts for main thoroughfare for more than 50% of Italian freight to central Europe national income.

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www.ibtpartners.com Exporting to Italy p.10 Main companies

Most of Italy’s large companies are public corporations, however it is Top Ten Companies by Turnover important to note that the government (US$ bil.) maintains a “golden share” in many of them. ENI

Generali Banks and insurance companies ENEL dominate Italy’s corporate league Fiat tables for size. The largest are Assicurazioni Generali, Unicredito and UniCredit SanPaolo. Intesa Sanpaolo Telecom Italia However the successes of Fiat Industrial manufacturing companies such as Fiat Finmeccanica and Finnmeccanica stand as examples Fondiaria-SAI of Italy’s extensive industrial 0 50 100 150 background.

Source: International Strategic Analysis (ISA) Economic Forecasts

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www.ibtpartners.com Exporting to Italy p.11 Imports and exports Main import partners Main exports / imports Italy’s main import partners are: Italy exports 56% of its products to other EU • Germany (16%) countries. • France (8%)

• China (7%) Italy’s main imports are: • Netherlands (5%) • Fuel (17% of total imports) • Spain (5%) • Motor vehicles (10%) • Raw minerals (10%) Total Value of Imports (bil. US$) • Chemicals (9%) 600 • Electronic devices (8%) 500 • Food (7%) 400 Import levels are expected to remain below those of 300 Europe’s other large economies due to sluggish 200 economic growth and flat 100 household purchasing power. 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Total Imports 246.7 290.7 346.1 384.6 442.2 511.0 559.6 413.4 484.7 526.4 503.4 496.2 508.9 526.7 541.6 553.2 Share this Ebook Source: International Strategic Analysis (ISA) Economic Forecasts www.ibtpartners.com Exporting to Italy p.12 Import regulations Regulations Tariffs

Italy is part of the EU and of the European The Common Customs Tariff (CCT) is the external Free Trade Association (EFTA) – this means tariff applied to products imported into the that EU Directives must be met in addition to European Union (EU). The Integrated Tariff of the national regulations. European Communities is referred to as Taric - see www.ec.europa.eu/taxation_customs/dds2/taric/t All commercial and shipping documents must aric_consultation be in Italian. Packing lists are compulsory if the shipment contains more than one package Taric incorporates all EU and trade measures and if the contents are not shown on the applied to goods imported into and commercial invoice. exported out of the EU. It is managed by the Commission, which publishes a daily updated Product certification version on the official Taric website . It comprises all customs duty rates and certain EU rules Products tested and certified in the US to applicable to the EU’s external trade. American standards are likely to have to be retested and re-certified to Italian / EU CCT is applicable to all goods from the USA and requirements. This is a result of the EU’s Canada. different approach to health and safety of consumers and the environment. Most duties are ad valorem (%), based on GATT Valuation Codes, approximate cost, insurance and Share this Ebook freight (CIF) value. www.ibtpartners.com Exporting to Italy p.13 Labeling and marking requirements

For customer protection purposes, any product CE Marking offered for retail sale is required to note: • Country of origin To sell products in the EU, US exporters are • Weight required to apply CE Marking. • Dimension • Chemical composition CE Marking is a declaration of conformity to EU • Appropriate hazard warnings Directives and with it products are allowed to circulate freely within the EU. The label must include instructions for use, in the designated languages necessary, as well as an Italy does not generally require any separate expiration or use-by date. marking from EU standards.

Any additives or growth hormone use must be The Eco-label clearly labelled, as overuse of these ingredients might prohibit the sale and use of the product in A voluntary label which US exporters can display Italy. Also, the manufacturer and place or plant on products that meet high standards of of origin must be listed on the contents section environmental awareness. for tracing the product should an issue occur. Criteria for displaying the eco-label are strict, covering the entire lifespan of the product from Share this Ebook its manufacture and use to its disposal. www.ibtpartners.com Exporting to Italy p.14 Foreign direct investment in Italy

The service sector remains the leading recipient of foreign investment in Italy – FDI Inflows (mil. US$) particularly the banking, insurance and 50,000 tourism sectors. 40,000 In contrast to the increasing investment in 30,000 northern European economies, foreign 20,000 investment levels in southern Europe and 10,000 Italy in particular, are smaller and have 0 trended downwards in recent years. -10,000

However, FDI inflows in Italy began -20,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 increasing again in 2011 following US$ 13,375 14,871 17,055 19,424 20,126 23,291 42,581 43,849 -10,83 20,077 9,178 29,059 measures by the government to lighten Source: International Strategic Analysis (ISA) Economic Forecasts the burden on companies.

According to fDi intelligence, ICT, one of Italy’s leading industries, accounted for almost a quarter of all foreign investment in Europe in 2012. Share this Ebook

www.ibtpartners.com Exporting to Italy p.15 Next steps

If you are involved in developing your company’s international markets, the chances are you are Download involved in: • Identifying Finding Distributors for • Engaging Export Markets • Optimizing your distributors.

Exporting internationally can be particularly difficult with numerous countries, local markets, languages, currencies, preferences ….. So getting the right distributor to work well with you is a challenge we hope we can help with.

Checkout our whitepaper on Finding Distributors for Export Markets for guidelines on how you can identify the right distributor and - most importantly, how the right distributors can find you!

Share this Ebook www.ibtpartners.com Exporting to Italy p.16 About IBT Partners

In 2002, we created IBT Partners with a vision to build a company that would make a substantial difference to our clients in helping them grow internationally – a vision based on the idea that international business and trade are vital engines of economic growth and an essential step in any company’s strategy.

Our staff, their enthusiasm and their skills are what makes the difference. Our offices in France, Germany, the UK and USA house teams that are all multi- cultural, multi-lingual trade experts with knowledge of new technologies.

We have worked with 100s of SMEs, helping them to identify new business opportunities and new potential clients in export markets. Get in touch! We invite you to get to know us, our vision, our Email: [email protected] passion and our commitment to increasing international trade for our clients. You can also find us on Twitter, Facebook and LinkedIn Share this Ebook

www.ibtpartners.com Exporting to Italy p.17 Special IBT Partners whitepaper offer!

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Commission of the European Communities Official national statistics www.europa.eu/index_en.htm en.istat.it/

Economic development agency dedicated to Italy in the World Economy bringing investment and business to Italy www.italtrade.com/italy/ice_report 2012_sum www.invitalia.it/site/eng/home.html mary.pdf

EU statistics for member states World Trade Organisation www.epp.eurostat.ec.europa.eu/portal/page/por www.wto.org/english/thewto_e/countries_e/i tal/eurostat/home taly_e.htm fDi Intelligence Reports on Various Sectors of the Italian www.fdiintelligence.com Economy www.marketline.com International Chamber of Commerce www.iccwbo.org

International strategic analysis www.isa-world.com

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